Navigating Kentucky’s Name, Image, and Likeness Reform for College Athletes

On June 24, 2021, Kentucky Governor Andy Beshear signed an executive order allowing Kentucky’s college athletes to profit from their name, image, and likeness (NIL). All three NCAA divisions followed in lock-step on June 30, 2021 enacting an interim policy suspending its longstanding NIL restrictions. While both Kentucky’s Executive Order and the NCAA’s interim policy are intended to be only temporary solutions until formal NIL legislation and NCAA bylaws are adopted, it is relatively clear that NIL reform is here to stay and will only be clarified as deals (and precedent) are made.

As a result, Kentucky’s student athletes are now free to pursue independent business ventures including advertising and endorsements deals, appearances, and even their own entrepreneurial ventures all while maintaining their ability to compete for their respective Universities.

By no means, however, is the recent NIL reform a blank check for Kentucky student athletes to pursue any business opportunity presented. Instead, all NIL deals must meet three broad requirements:

1. No Pay-for-Play;

2. No Improper Inducements; and

3. Compliance with Kentucky Law.

NCAA member institutions, student athletes, and fans should be familiar with the first two concepts: a student athlete may not be compensated for his or her performance on the playing field (pay-for-play) or for his or her decision to attend a particular university (an improper inducement).

For Kentucky universities, student athletes, and the businesses that wish to partner with them, the third requirement (compliance with Kentucky law) is where the uncertainty comes in. Under Kentucky’s executive order, student athletes may earn compensation from NIL opportunities and retain agents, attorneys, and other professionals to evaluate such opportunities to ensure compliance with applicable law, NCAA, and university rules without their scholarship eligibility or amateurism being affected.

 With that being said, there are serious limitations as to when an NIL deal can be made and what type of deal can be made under the executive order:

1. Universities may (but are not Required to) Establish Rules as to When a Student Athlete may Pursue NIL Opportunities: Universities may create reasonable limitations as to the dates and times that a student athlete may participate in endorsement, promotional, social media, or other activities related to an NIL agreement or contract;

2. No Conflicts of Interest with the University: Student athletes may not enter into contracts that conflict with a provision of a contract to which their university is a party;

3. Universities may (but are not Required to) Prohibit Student Athlete Use of University Logos, Symbols, or Intellectual Property: Student athletes are not afforded any right to use university’s intellectual property such as names, logos, symbols, or trademarks in their independent business ventures. Accordingly, Universities may choose to, but are not required to, prohibit their student athletes from using such intellectual property in their NIL ventures;

4. Universities may (but are not Required to) Prohibit Student Athletes from Contracting with Certain Businesses: Universities may, but are not required to, establish rules prohibiting student athletes from entering into contracts which are associated with activities or products related to alcohol, tobacco products, firearms, sexually-oriented activities, or which is otherwise incompatible or detrimental to the image, purpose, or stated mission of the university;

5. Universities may (but are not Required to) Require the Disclosure of any NIL Opportunities to a University Official All Prospective NIL Contracts are Subject to University Review and Approval: All NIL contracts must be disclosed to the university to be reviewed for conflicts and compliance with NCAA, conference, and university rules before they may be executed by the student athlete.

Kentucky’s NIL law is in many ways more permissive to student athlete’s NIL ventures than that of neighboring Ohio which has established that (i) a student athlete may not execute an NIL contract during “official team activities” and (ii) all NIL contracts must be disclosed to the student athlete’s university for review (the school does not have a choice). With wider discretion given to Kentucky universities as to when an NIL contract can be executed and a wider variation from university to university as to their respective contract disclosure and review procedures, it is important for student athletes and the businesses that wish to partner with them to work closely with professional representatives to navigate each university’s NIL policies.

Conclusion

Despite the uncertainty and the regulatory limitations of NIL reform, it is an exciting time to be a student athlete. After years of often heated cultural and political debate surrounding amateurism and the feasibility of allowing student athletes to monetize their campus (and sometimes national) notoriety, NIL reform seems to reach a happy medium. Although athletic departments can certainly expect a relatively hefty administrative burden in ensuring compliance with NIL reform, the NCAA’s central tenets of amateurism remain intact. On the other hand, student athletes and the businesses that partner with them already have and will continue to reach lucrative deals.

 Whether you are a student athlete or business considering an NIL opportunity, or an athletic department seeking to tailor practical and compliant policies in the face of changing regulations, attorney (and former Division I scholarship athlete) Garrett Mayleben is here to help. Our office is dedicated to guiding you through changing NIL policy and helping you achieve your goals—with your business, and both on and off the field.

 Call (859) 757-1240 or email gmayleben@mahanlaw.com to schedule a free consultation today.

Written by Garrett Mayleben. Esq.; Published: August 16, 2021