Pennsylvania General Assembly past law last week that would allow varsity athletes benefit from their own name, image and likeness. Included as part of the state’s annual budget, the changes would go into effect upon signing by Governor Tom Wolf, which could happen as early as this week.
The main feature of the legislation is that it allows athletes to take advantage of endorsements and prohibits entities – like the NCAA and its affiliated conferences – from prohibiting athletes from doing so. It would also prevent schools from revoking or reducing an athlete’s scholarship if he is paid for the use of his name, image and likeness (NIL), and this scholarship would also not be considered a limit on his ability to earn money with these same NIL rights.
It also includes a royalty clause which states that anyone who “produces a varsity team jersey, varsity team video game, or varsity team trading cards for the purpose of making a profit must pay a royalty to each student athlete whose name, image, likeness or other individually identifiable characteristic is used.
Under the legislation, athletes will also be able to employ formal representation, as a professional athlete would, to negotiate contracts or represent them in other legal matters related to their NIL rights. Athlete representation must be an athlete agent, financial advisor or lawyer.
There are some restrictions on the changes. Any compensation that an athlete receives cannot be in exchange for his attendance or participation and performance in a certain school. They also cannot do business with organizations involved in the “development, production, distribution, wholesale or retail” of adult entertainment, alcohol, casino and gaming products or services. money, tobacco and electronic smoking products, prescription drugs or any other controlled substance.
But for all the power that this legislation would give to athletes, schools retain important oversight over how athletes exercise their NIL rights.
Not only would athletes be required to disclose any contract guaranteeing them compensation to their school within seven days of contract execution, institutions would be allowed to ban an athlete from participating in “[NIL] activities ”which conflict with existing institutional sponsorship agreements or for“ other considerations, such as conflict with institutional values, as defined by the higher education institution ”.
The introduction of the language into the regulation of public education in Pennsylvania follows similar initiatives by lawmakers at the state and federal levels. Seven states – Alabama, Florida, Georgia, Kentucky, Mississippi, New Mexico, and Texas – have NIL laws that will come into effect on July 1. Last month, Congress Democrats introduced a bill that officially make varsity athletes employees of their institutions and grants them the right to bargain collectively.