Name, Image and Likeness for Interscholastic Athletes – What Does it Look Like?

NIL at the interscholastic level has been a reality for many states for about 24 months. NIL allows high school athletes to monetize their name, image and likeness AND maintain their high school athletic eligibility. On its face it seems only fair to allow athletes, even at the high school level, to “cash in” on their fame.

The last 24-month period, in part, has acted as a “settling out” time to assess the high school NIL trends and pitfalls, and how schools, school districts and state associations have been dealing with the NIL and attendant issues. Interscholastic NIL cannot yet be de-linked from collegiate NIL – since it is new and still developing at both levels, most do not yet recognize the practical differences between the two.

A Short History
Initially, NIL was approved for college athletes. Colleges and universities (and high-profile head coaches) were making billions of dollars from large TV contracts, gear endorsements and other sponsorships. Huge donor dollars were being raised. The athletes received the value of a scholarship if they were on scholarship. A scholarship is obviously a benefit, but within the context of the billions earned during events like the NCAA Division I Men’s Basketball Tournament, scholarship value pales in comparison.

In many ways, limiting these athletes from cashing in on their NIL is inconsistent with American values. An example is an autograph. Before NIL, anyone in the world could sell the autograph of any collegiate athlete, except for the source of the signature – the athlete. Now collegiate athletes can sell their autograph, and they can monetize their name, image and likeness, which seems fairer.1

Rules
The current NIL rules related to college athletes apply via state law and/or NCAA rules. Due to the potential of having a patchwork of so many NIL rules, the NCAA is now asking for federal legislation addressing this patchwork of NIL rules. The NCAA allows member institutions to recruit and sign high school athletes who have participated in NIL activities while the student was in high school.

The current NIL rules related to high school athletes are established state to state. There is a possibility of 51 different sets of rules relating to NIL (50 states and the District of Columbia), and 51 different sets of rules relating to transfer (undue influence, bona fide moves, traditional academic transfer rules, and subsequent eligibility determinations) leads to many questions.

As of October 4, 2023, the following 30 states and the District of Columbia allow interscholastic athletes to receive NIL payments: Alaska, California, Colorado, Connecticut, District of Columbia, Georgia, Idaho, Illinois, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Utah, Virginia and Washington. This developing area requires measured and contemplative rule-making. What the landscape in both the near- and far-future will look like for both collegiate and high school NIL is anyone’s guess. But one thing is for sure, NIL at both the collegiate and interscholastic levels is here to stay.

New and Different Options
The financial opportunities for high school athletes are not just for product endorsement, gear sales or the more traditional NIL models – interscholastic opportunities can be much more sophisticated. Now, there must be consideration of rules that apply to 1) the developing individual athlete “brands” which the individual athlete has personally created on social media, and 2) the number of new and developing avenues of revenue streams for these athletes that don’t necessarily include U.S. currency.

An example of such an option for high school athletes is what former USC quarterback and Heisman Trophy winner Matt Leinart and current USC quarterback and Heisman Trophy winner Caleb Williams provide with their Hall of Goats organization. Hall of Goats has a platform designed to provide athletes the opportunity to drop exclusive NFT collections and take advantage of their NIL rights, while providing personal brand, content and digital resources.

NFT collections are “non-functional tokens.” These tokens and the platform are designed to allow athletes to use the platform to help build their brands, tell their stories and set them up for long-term success. As a result, the traditional notions of what constitutes remunerative value for a high school athlete no longer is only about “cash” but is about other things of value that if properly “negotiated” can lead to additional, and non-traditional monetizing of the athlete, at a time the athlete chooses.

The significance of athletes having their own brand is that it allows them access to NIL separate from their high school team and school district. The most common limitations on high school NIL are that the athlete cannot use the school’s name, uniform, mascot, etc., as part of what they market for NIL. At the high school level, the brand’s value is not linked to the school the athlete attends but is linked to the individual.

The “athlete brand” can be quantified by the number of social media followers the athlete has, and the number of views on videos that the athlete has. This is where the value to the athlete is, which is different from the collegiate model where an athlete may get a percentage of profits from the sale of their school jersey with the number and name they wear, cashing in on the school’s brand and name.

A New Realm
For an experienced athletic director, the concern about this new realm of NIL is very apparent. The traditional perspective is that interscholastic sports are educational athletic opportunities designed to offer students a chance to engage in afterschool activities. This belief, substantiated by extensive research, underscores the positive impact of student involvement in activity programs during middle school and high school. Such involvement is widely known to enhance academic performance and provide great benefits later in life.

The new normal of NIL now being an additional consideration of participation is counterintuitive to what high school athletic administrators have known up to this point. How will NIL impact the traditional notions of education-based athletics? Regardless of one’s personal feeling about it, these current NIL allowances are created by state law, so the marching orders are set. Now, high school athletic directors must lead schools and communities through a fundamental change of the traditional model of interscholastic activity programs.

The implications for illegal and unethical recruiting will be significant, as will the impact on the athlete. Already, many high school sports are impacted by competitive forces – club volleyball, club soccer, AAU basketball – where the high school coach is many times in the middle of these competing forces.

In a November 22, 2022 article, NBC News attempted to give a peek “behind the NIL curtain” regarding recruitment to college, and for NIL opportunities. It was not pretty. The story involved a 16-year-old Georgia high school athlete, T.A. Cunningham, who was recruited for his NIL opportunities, entering a new world of opportunity. As part of embracing those new opportunities, Cunningham and his family moved to California for his senior year in high school.

A review of the written offers showed the offers were very exploitive, some “….claiming exorbitant commissions of up to 40% and booster contracts with complex fee structures and legal jargon, reducing the athletes’ freedom to transfer or enter outside deals. One “contract” was just a $100,000 loan.”2 In the end, Cunningham was initially deemed not eligible to participate his senior year in California due to circumstances of his transfer. He filed for an injunction and lost. But eventually, the decision was reversed, and he was ruled eligible for Game 5 of the season. However, this story resonated – who looked after the student-athlete?3

This situation highlights the need for diligence and awareness of what is at stake for these athletes, most of whom are in high school and are not yet legal adults. It is only a matter of time that the high school athletic director will be the first point of contact by an athlete or parent of an athlete asking about NIL opportunities. What will the athletic director tell the parent or student-athlete?

Other issues of having an athlete entering an NIL contract are more practical and urgent relative to the school and team culture - what “controls” would the high school coach have?

Can/will the coach effectively control:

• Earned playing time,

• Fair and deserved discipline of the player if necessary, or

• Leading the team and community through any resentment of other athletes and families directed at the athlete with an NIL deal.

Leadership – What to do?
The same markets and exchanges enjoyed by university sports and the athletes that attend those institutions are greatly different than high school sports. In most places across the country, high school football and basketball games are not a product to be “sold” to make money; they historically have been an activity for community enjoyment. Ticket sales are measured in the low thousands of dollars, and the game is only an activity for the athletes and the community. These contests historically have reflected the wholesomeness of high school sports participation and of the 99 percent of participants who go on to other great things after high school – not one of which is athletic.

This will continue to be the case, but now there must be consideration for the implications of NIL. So how does the high school athletic director proceed? There are many leadership implications of this new trend.

Some suggested actions are:

• Know your current state status of NIL – if it is not on the horizon right now in your state, it will be. Stay in contact with them.

• Start the discussion with your coaches now about how to lead through this – proactivity is a must.

• Start educating your parents now – the more you control the narrative, the less upheaval you face.

• There are a tremendous number of sources available – make sure to access them.

• Make sure your administrative team also knows the implications of NIL on high school athletes because they will get questions and their answers must be accurate.

• Explore local opportunities to see if there is an interest in exploring “local” NIL opportunities.

This certainly is a new and emerging aspect of being an interscholastic athletic director. Know your community, understand that the landscape is rapidly changing and be prepared to change with it. Your community is looking to you for guidance and information.

References

1. Look no further than the link between institutional wealth and athlete “brand” at a university – the story of Johnny Manziel as told in the Netflix documentary “Untold: Johnny Football.” His Heisman Trophy Award was estimated to have brought in $37 million in media exposure for Texas A&M, which then led to a significant increase in donations to the university – donations ostensibly linked to the “Johnny Football” brand. The university then completed a $420 million renovation of the Aggies’ stadium. NCAA rules in place at the time had no provisions for NIL. In fact, he couldn’t even sell his autograph. Only Texas A&M University, the head coach and all others not named Johnny Manziel were allowed to benefit from his brand.

2. ‘There’s no rules. It’s crazy’: New money in NCAA recruiting leaves elite athletes ripe for exploitation – By Kit Ramgopal, Kenzi Abou-Sabe and Gabe Gutierrez – NBC News November 27, 2022.

3. “Top college prospect TA Cunningham ruled eligible to play for California high school after weeks-long transfer drama – By Kyle Bonagura, ESPN Staff Writer, September 22, 2022.