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NIL Law in College Sports: The Basics

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When the NCAA adopted interim rules allowing college athletes to profit from name, image and likeness (“NIL”) in July 2021, it called upon Congress to implement NIL laws at a national level. Nearly three years into the NIL era, that hasn’t happened. Meanwhile, the NCAA had a busy start to 2024, imposing NIL-related sanctions against Florida State University, introducing new transparency requirements for NIL deals, and being sued by several states over its NIL policies.

To understand the current NIL landscape, let’s back up. NIL regulation currently flows from three sources: state government, the NCAA, and schools themselves. Athletes, donors, and businesses should be familiar with each level of regulation to ensure their NIL deals don’t put them–or schools they support– at risk of serious penalties.

North Carolina’s NIL Law

North Carolina’s current NIL law was established via Executive Order No. 223, signed by Governor Cooper on July 2, 2021. The important points to know are: (1) schools cannot make NIL deals directly with student-athletes; (2) NIL deals cannot be used as a direct inducement for a student-athlete to enroll or remain enrolled at a school, and (3) NIL deals cannot be conditioned on performance in competition.

These restrictions are intended to preserve the amateurism of college athletics by ensuring NIL does not create a “free agency” of the kind we see in professional sports, where teams attract players using high salaries and performance-based bonuses. You’ll find that much of the current NIL regulatory scheme was made with that same intent. That notwithstanding, the Order does allow student-athletes to hire agents, so long as they comply with the same state and federal laws that apply to agents for professional athletes.

Finally, North Carolina also gives discretion to its own colleges and universities to establish additional regulations, should they choose to. More on that later.

NCAA Rules

The next layer of regulation comes from the NCAA’s interim rules. The NCAA’s interim policy and supplemental guidance hit many of the same notes as North Carolina’s law – including that NIL opportunities may not be used to induce recruits to attend a particular school.

The NCAA also emphasizes that compensation without quid pro quo is prohibited. Accordingly, NIL agreements must contain expected deliverables, such as endorsement and marketing activities, that the student-athlete has promised in exchange for compensation. In other words, businesses cannot simply write a check with “NIL” in the memo line. It should be clear how the student-athlete’s name, image, and likeness will be used.

Like North Carolina’s law, the NCAA prohibits compensation based on athletic participation and achievement. So, NIL agreements cannot have any of the performance-based incentives that have become so common in professional sports, such as bonuses for reaching thresholds for innings pitched, rushing yards, or games played.

In January, the NCAA concluded its first major case for NIL violations, sanctioning Florida State University after an FSU assistant coach arranged a meeting between a recruit and an FSU booster, during which the booster extended a 1-year, $180,000.00 NIL offer–contingent on transferring to FSU. Following an investigation, the NCAA suspended the coach for three games. Perhaps more damaging, FSU was required to “disassociate” from the booster for three years. Disassociation means the booster cannot provide assistance (financial or otherwise) to FSU, nor can the booster receive any athletics benefit from FSU which would be unavailable to the general public.

The NCAA’s Division I Council also unanimously adopted new disclosure requirements in January. Beginning August 1, 2024, student-athletes must disclose information to their schools regarding all NIL agreements exceeding $600.00 in value. They must disclose the involved parties, terms of the agreement, and any compensation for the student athlete’s service provider (agent, financial advisor, etc.) within 30 days of signing the deal. The NCAA will also be developing standardized contracts and recommended, but not mandatory, contract terms.

While the NCAA’s NIL rules are harmonious with North Carolina’s, that’s not the case everywhere. The attorneys general of Tennessee and Virginia filed suit against the NCAA this week to abolish the NCAA’s NIL regulations on antitrust grounds. The lawsuit follows the NCAA’s investigation into the University of Tennessee’s recruitment of a five-star quarterback from California.

School-Specific Rules

The final layer of regulation comes at the school level. North Carolina’s NIL law gives colleges and universities discretion to prohibit certain deals for reasons specific to that school. For example, schools may prohibit NIL deals which conflict with an existing contract of the institution. So, because NC State has a deal with Adidas for its athletic uniforms, it could prohibit an athlete from signing an NIL deal with Nike, or another competitor.

Schools may also limit the categories of brands a student athlete may enter NIL agreements with. For example, the University of North Carolina at Chapel Hill’s policy prohibits athletes from engaging in NIL deals involving alcohol, gambling, or adult entertainment.

Schools may limit compensation during official team activities and events—probably to prevent a student-athlete from attempting, and brands expecting, promotion of their sponsor’s brand during a game or press conference.

Schools may also require that NIL deals are commensurate with fair market value. So, if an athlete is offered a million dollars for a de minimis obligation, schools have the authority to tamp down. However, that’s something schools are clearly disincentivized to do as it could put them at a competitive disadvantage compared to schools who don’t have the same requirement.

Institutions may also limit NIL pertaining to the school’s intellectual property. For example, Wake Forest could prevent one of its players from using Wake Forest’s logos in the course of an NIL deal. Knowing each school’s policies on intellectual property use in NIL deals is vital to avoid exposure to trademark and copyright infringement.

That’s an overview of the current landscape. But that landscape could change–fast. Support for amateurism in college sports appears to be waning, with polls indicating that a majority of Americans support the notion of directly paying college athletes. Whether Congress will act to standardize NIL law remains to be seen. In the meantime, stakeholders should vet their NIL contracts, both in form and presentation, to ensure they aren’t exposing themselves – or their beloved alma maters – to serious penalties.

Three Blanco Tackabery Attorneys Named 2024 NC Super Lawyers and One Rising Star

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We are pleased to announce that three of our attorneys have been named 2024 Super Lawyers and one attorney has been named as one of the 2024 Rising Stars.

 

Congratulations to the following three attorneys named Super Lawyers:

Elliot Fus – Business Litigation

Peter Juran – Business Litigation

Ashley Rusher – Bankruptcy: Business

 

Congratulations to the following attorney named Rising Star:

James Goodwin – Real Estate

 

Super Lawyers recognizes the top attorneys in over 70 practice areas who have attained a high-degree of peer recognition and professional achievement. Approximately 5% of lawyers from across the state are recognized as “Super Lawyers” and fewer than 3% are named “Rising Stars.”

To learn more, check out the 2024 Super Layer publication here.

Attorney Julian Robb Wins 2024 Business NC Legal Elite Real Estate Category

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Blanco Tackabery is pleased to congratulate attorney Julian Robb for winning this year’s Business North Carolina Legal Elite Real Estate category! Julian received the most votes in real estate and therefore, received recognition as one of the state’s top attorneys.

Julian focuses his practice on commercial real estate. This also includes doing work in the Affordable Housing and Renewable Energy areas. His work includes all types of commercial real estate transactions, complex title work and commercial leasing contracts and agreements. He has been listed as an honoree of the Business North Carolina Legal Elite Real Estate category in 2017, 2018, 2021 and 2023.

Get to know the state’s top lawyers here. Check out Julian’s profile in the Business North Carolina Magazine here.

Five Attorneys Named Legal Elite Honorees for Business NC Magazine

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We are pleased to announce that five of our attorneys have been named Legal Elite Honorees for Business NC Magazine in 2024. Attorneys were selected by their peers as the top lawyers in their practice via a statewide ballot.

Congratulations to:
Chad Archer for Litigation
George Hollodick for Real Estate
Caroline Munroe for Tax and Estate Planning
Julian Robb for Real Estate
Ashley Rusher for Bankruptcy

We are proud to extend our congratulations to Julian Robb for being named the top in his category.

Wake Forest University Hosts Winston-Salem Open 2023

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This past weekend the Winston-Salem Open kicked off at Wake Forest University! Blanco Tackabery has enjoyed attending this annual tournament and supporting its efforts to benefit the youth in our community through investment in quality athletic and tennis programs at local schools.

Matches began Saturday, August 19th. For full event details and to purchase tickets, visit: https://www.winstonsalemopen.com/en/

August 19-26, 2023

Wake Forest University Complex

Blanco Tackabery Sponsors 2023 Lewisville Golf Classic

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Blanco Tackabery sponsors the Lewisville Civic Club’s 16th Annual Charity Golf Tournament at Salem Glen Club on Friday August 18th.

The tournament is the primary fundraiser for the charitable activities of the Lewisville Civic Club. These charitable efforts include scholarships for college-bound high school seniors, support of local Scouts and families in need.

 

 

Blanco Tackabery Attorneys Named to the Best Lawyers in America©

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Blanco Tackabery is proud to announce that four of our attorneys have been named to the 2024 edition of the Best Lawyers in America© and one attorney named to the Best Lawyers: Ones to Watch® in America. The following attorneys were chosen by their peers in their respective practice areas to receive the Best Lawyers in America© recognition:

 

Ashley S. Rusher

Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law

Peter J. Juran

Commercial Litigation

Amy Lanning

Real Estate Law

Caroline C. Munroe

Trusts and Estates

 

The Best Lawyers: Ones to Watch® in America is awarded to attorneys who are earlier in their careers for outstanding professional excellence in their respective practice area. The following attorney was chosen by peers in their respective practice areas to receive Best Lawyers: Ones to Watch® in America recognition:

 

Chad Archer

Appellate Practice

Commercial Litigation

 

Since it was first published in 1983, Best Lawyers® has become a well-regarded guide to legal excellence. Over 52,000 leading attorneys cast more than 5.5 million votes on the legal abilities of other lawyers in their practice areas. Corporate Counsel Magazine has called Best Lawyers® “the most respected referral list of attorneys in practice.”

Blanco Tackabery Sponsors 2023 SummerLark

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Blanco Tackabery is proud to sponsor this year’s SummerLark event, held by Atrium Health Wake Forest Baptist.

We are proud to come together with our community to support this effort, which helps to raise funds and awareness for the Cancer Patient Support Program (CPSP), ensuring that no one faces cancer alone. The CPSP provides patients and caregivers with the assistance they need in facing a cancer diagnosis, with group counseling, support groups, patient aid, and other healing and holistic therapies designed to ease the cancer journey.

To make a donation or to purchase tickets, please visit: https://giving.wakehealth.edu/get-involved/summerlark

SummerLark

Bailey Park

Winston-Salem, NC

Saturday, May 20 | 6pm

Blanco Law Proudly Sponsors Davie Little League

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Blanco Tackabery is proud to sponsor the 2023 season of Davie County Little League.

Davie American Little League believes in the power of youth baseball and softball to teach life lessons that build stronger communities and individuals. Through Baseball, Softball, and Challenger divisions, Davie Little League provides opportunities for all children, age 4 to 16, to have a meaningful experience.

To learn more visit: https://www.daviell.com/default.aspx?portalid=10520

Members of Blanco Tackabery attend 2023 Annual Meeting of the Carolinas Council for Affordable Housing (CCAH)

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Members of the Blanco Tackabery firm attended the 2023 Annual Meeting of the Carolinas Council for Affordable Housing (CCAH). The CCAH is a nonprofit organization advocating for affordable rental housing in North and South Carolina. We are active members of the CCAH, working to provide affordable training and practices advocacy within our communities.

The Affordable Housing & Community Development Group at Blanco Tackabery helps clients navigate the complexities of real estate and financial transactions associated with affordable housing and community development projects. Our attorneys are involved throughout the project to help clients feel confident at every step.

We enjoyed attending the conference on April 16-18 in Myrtle Beach, South Carolina.

Event details: https://www.ccahonline.com/upcoming-events/

 

Blanco Tackabery Sponsors River Run International Film Festival Celebrating Its 25th Year

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Celebrating its Silver Anniversary with 25 years, the @RiverRun International Film Festival starts today! The mission of River Run International Film Festival is to foster a deeper understanding of the people, cultures and perspectives of our world through interaction with cinema and filmmakers.

Blanco Tackabery is proud to sponsor this festival that brings everything from animated shorts to acclaimed documentary features to our city.

At Blanco Tackabery, we offer our clients a broad range of capabilities, delivered with the personalized attention required to anticipate and successfully navigate business and legal matters, no matter how unexpected the twists and turns might be.

Blanco Tackabery Hosts Members of the Winston-Salem Chamber for Wake Up Winston

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Blanco Tackabery was pleased to host the Greater Winston-Salem Chamber monthly event, Wake Up Winston, on Wednesday, April 12. It was a pleasure gathering with community members and discussing ways we can collaborate to better serve and grow Winston-Salem.

Greater Winston-Salem, Inc. works to develop a vibrant, thriving community that’s good for business growth and sustainability. With focus areas in economic development, talent recruitment and retention, career-readiness, and advocacy, their initiatives are designed to help business and community grow.