On campuses around the country, the name, image and likeness (NIL) policy is revolutionizing the way student-athletes can obtain benefits while attending a college or university. As of July 2021, student-athletes can enter NIL deals if they comply with state law and the NCAA’s rules. Essentially, NIL allows college athletes to monetize their personal brand by profiting from their name, image and likeness through various opportunities such as endorsements, sponsorships, social media posts and more.
In the first episode of our NIL podcast series, Anthony Kocheran, an associate in Cherry Bekaert’s Government and Public Sector Advisory practice, is joined by Mit Winter, an attorney at Kennyhertz Perry who specializes in college sports law and has an extensive knowledge of NIL and its effects on college athletic departments. Tune in to learn more about:
- An introduction to the world of NIL, including:
- Collectives
- Employment Status
- Governing Bodies
- Factors that led to NILs current state in college athletics
- How college and university athletic departments are navigating the challenges of NIL
- Observations of what athletic departments are and aren’t doing when it comes to change in college athletics
- How athletic departments are preparing for the future
- Benefits of having comprehensive polices and procedures in place within an athletic department
- One key takeaway about NIL
Due to the ever-evolving NIL space, and the current and upcoming compliance challenges universities are facing, Cherry Bekaert has dedicated a team of professionals to track all there is to know about NIL. As more guidance comes forth, we are here to provide regular updates, thought leadership, current and future state consulting, change management advisory and ready to stand up services. Whether you are a Power Five or sub-division school, we have solutions tailored for you.
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MATTHEW SOCHA: Welcome and thanks for listening to Cherry Bekaert's Not-for-Profit podcast series. In each episode we hear from the best in the business on the latest challenges, trends, and opportunities affecting Not-for-Profit organizations and educational institutions. I'm Matthew Saha, leader of Cherry Bekaert's Not-for-Profit industry practice. I hope you enjoy, and thanks for listening.
ANTHONY KOCHERAN: Good afternoon. My name is Anthony Cochran, part of Cherry Bekaert's Government and Public Sector Advisory team. I'm here today to talk with Mitt Winter regarding NIL and its impact on colleges and universities and Cherry Bekaert's focus on NIL and everything going on in the industry. Mitt Winter is a leading expert in NIL law and I'm happy to have him here today to speak with us. I'll pass it to him to introduce himself a little more.
MIT WINTER: Thanks for having me. I'm an attorney with the law firm of Kenny Herz Perry in Kansas City and I do a lot of work in the college sports space. I represent universities, NIL collectives, and businesses doing different things in the college sports and NIL space, and I've represented some athletes as well. I've seen college sports and NIL from many different angles.
ANTHONY KOCHERAN: You've been around the space a while and interacted with many stakeholders. Can you walk us through the early days of NIL and some factors that led to the current state?
MIT WINTER: There's a common misperception that the Supreme Court created NIL rights for college athletes via its Alston decision in the summer of 2021. While that decision played a role in where we are now, the movement allowing college athletes to monetize their NILs started well before that.
In 2014, the O'Bannon v. NCAA case held that NCAA rules prohibiting compensation for athletes' NILs violated antitrust law. Although that decision did not immediately cause the NCAA to change its rules to allow athletes to monetize their NILs, it did lead to athletes receiving more for the value of their athletic scholarships, up to their cost of attendance.
About five years after the O'Bannon decision, some states began considering laws to allow college athletes to receive compensation from third parties for the use of their NILs. The first state to pass such a law was California in 2019, with an effective date set for 2023. Florida then passed a similar law with an effective date of July 1, 2021, accelerating the timeline by two years. That created a domino effect with other states adopting NIL laws that became effective in 2021.
Around the time California passed its law, the NCAA pushed back, but once Florida and other states moved forward, the NCAA began drafting its own legislation with certain restrictions. The NCAA worked on that in 2020 and 2021. In June 2021, about a month before several state laws took effect, the Supreme Court's Alston decision dropped and the NCAA lost that case.
Although Alston was not directly about NIL—it concerned what types of education-related benefits schools could provide—the decision influenced the NCAA's NIL legislation discussions. Concerned about potential antitrust exposure, the NCAA deferred and implemented an interim NIL policy effective July 1, 2021.
The interim policy was basic: schools cannot directly pay NIL compensation to their athletes; NIL compensation must not be tied to athletic performance; NIL deals are not supposed to be used as recruiting inducements; and there generally needs to be some quid pro quo for the athlete to receive NIL compensation. That policy has been the operating framework since July 1, 2021.
After NIL opened, endorsement-type activity began immediately, with athletes promoting businesses and appearing in marketing. Collectives also formed—groups of fans and boosters who pool money to enter into NIL deals with athletes at the schools they support. At this point, roughly 80% of NIL dollars flowing to college athletes is coming from NIL collectives, and most of that money is flowing to FBS football and Division I basketball players, particularly at the Power Five level.
ANTHONY KOCHERAN: There's a lot of discussion about the "Wild West" of collectives and how deals sometimes amount to paying to play. What's your perspective?
MIT WINTER: That critique is common. Although many deals are written as NIL deals, in practice a substantial portion of the payments from collectives function as compensation tied to an athlete's participation and value to the program. That has led to ongoing scrutiny and litigation, and it's one reason schools and regulators are watching closely.
ANTHONY KOCHERAN: How have colleges and universities been navigating these challenges, particularly regarding collectives, their tax statuses, and the individuals involved?
MIT WINTER: It varies widely by institution. Some schools viewed the new landscape as an opportunity and have been aggressive in using NIL to their advantage. Those schools are more willing to engage with and provide support to collectives, which the NCAA rules generally allow; schools can promote collectives and help them raise money.
Other institutions have been more conservative and wary of NCAA penalties, so they have taken a more hands-off approach. There's a divide between schools that are aggressive and those that are cautious, though more schools are embracing NIL to stay competitive in recruiting, particularly at the Division I FBS football and Division I basketball levels. State law differences are a major factor influencing what schools do, and many state laws have been amended since they were first passed.
ANTHONY KOCHERAN: What are the benefits for athletic departments of having comprehensive NIL policies and procedures, and is there anything schools should be doing that they aren't?
MIT WINTER: NIL has already changed a lot in three years—state laws have changed, NCAA guidance has evolved, and courts have issued decisions affecting how NIL plays into recruiting. It's important for schools to stay current and have procedures that explain how employees can interact with collectives, how NIL can be used in recruiting, and what coaches can do regarding NIL and recruiting.
Looking ahead, we may see a world—potentially by the end of this year—where schools directly pay athletes, whether as NIL compensation or some form of revenue sharing. That's different than the current model, where compensation to athletes comes from third parties not technically affiliated with the school. Schools need to prepare internally: estimate how much they might have to pay athletes, determine whether they will need to increase revenue or reduce expenses, and design practical mechanisms to make payments.
ANTHONY KOCHERAN: Where are schools getting information on NIL—are they relying on a single resource or on existing advisors?
MIT WINTER: That varies as well. Some schools have hired outside consultants to help with NIL; others rely on in-house employees. Generally, larger schools with more resources are more likely to hire third parties to assist in navigating the NIL world. But NIL will affect every Division I school, so all institutions need to be thinking about and preparing for these issues.
ANTHONY KOCHERAN: Preparing must be quite the challenge with everything changing so fast. By the time this podcast comes out there may already be more significant changes. Thank you for joining us today.
MIT WINTER: Thanks for having me.
ANTHONY KOCHERAN: Before we finish, where can listeners find more of your content?
MIT WINTER: I'm on LinkedIn as Mitt Winter. I'm on X/Twitter as WinterSportsLaw. My email is mitt at kenny herz perry dot com for listeners who want to reach out or review my content.
MATTHEW SOCHA: Be on the lookout—we plan to have many more conversations in this podcast series and look forward to future episodes and updates. This is Matthew again; I hope you enjoyed this episode and look forward to our next one. Don't forget to subscribe.
