05 May, 2020

That's Me! - NCAA Allows for Athletes to Share in the Profits from their Image Rights

The article below was drafted by Laura Schrauth who is a licensed attorney involved in sport, entertainment, intellectual property, and business law. As a law student, she participated in the American Bar Association Intellectual Property Section’s Law Student Reporters program and has been published in law reviews and practice magazines throughout the United States. When she’s not working, Laura enjoys all things music, cooking shows, and the Chicago Cubs. She can be found on Twitter @LauraSchrauth17.

The term “celebrity” has come to mean many things in 2020. Once reserved for movie stars, recording artists, and professional athletes, technology has opened the term up to include those with popular YouTube or gaming channels, social media influencers, and even amateur athletes. Although the term has changed meanings to include more people than ever before, the law in the United States protecting “celebrity” has remained the same.

In the United States, celebrities often market themselves using what are commonly called rights of publicity. These rights fall under federal trademark protections, chiefly section 43 of the Lanham Act. This section allows individuals the rights to limit or control how their name, image, and likeness (NIL) are used in marketing. While everyone is entitled to these federal protections, only 33 of the 50 states recognize any rights of publicity on the state level, and unsurprisingly, only California and New York have comprehensive practices.

Recent controversy has sparked conversations about how far these NIL rights go when the NCAA (National Collegiate Athletic Association) voted to change their policy that forbids college athletes from capitalizing on their own rights of publicity at risk of forfeiting their amateur status to one that allows the athlete to exercise rights of publicity while remaining NCAA eligible. Beginning in 2021, college athletes will be allowed to share in the profits that universities and athletic companies generate by using their NIL. Many opponents argue that this decision is unwise, as most top preforming college athletes are already afforded many luxuries by their universities, while others are glad for the change, noting that those with shorter careers will gain the most benefit from cashing in sooner rather than later in their college years.

One notable example of the latter’s argument can be seen in recent Olympic swimming champions Missy Franklin and Katie Ledecky. Even though the Olympic Committee eliminated their amateurism requirement in 1971, the NCAA only voted for the 2021 change at the end of 2019. After the 2012 Olympic season, gold medal winner Missy Franklin had to turn down millions of dollars in endorsements in order to return back to her college swim team. By the 2016 Olympics, Franklin could not keep up with the new talent, and found herself without any offers for endorsements. That same year, 2016 champion Katie Ledecky decided to quit her college swim team in order to avoid making that same mistake. Both swimmers expressed their disappointment in having to choose between the two.

Senator Richard Burr, an opponent of this decision, proposed that student athletes should now be taxed for athletic scholarships, citing them as income. Critics of that idea counter that only endorsement money should be taxed as income, because the scholarship is still the only compensation universities give student athletes in consideration of playing for their school. Others question the profitability of student athletes to universities and athletic companies, who prior to the rule kept 100% of all jersey and apparel monies, where students are now in a position to control their own NIL. This should not interfere with university or apparel company profits, however, because it is via those mediums that student athletes gain their exposure in the first place, which encourages student athletes to participate for their own benefits. Fee agreements could easily be incorporated into athletic contracts, wherein universities, companies, and players could come to mutual understandings of how those NIL rights can be utilized by them all. Rather than losing a share in anything, players now have the opportunity to gain a share in their own marketing, which could serve as encouragement for student athletes to stay in collegiate athletics, rather than leave early to pursue professional or monetary opportunities instead.

While controversial, this seems to be a good move for the NCAA. No longer will student athletes have to decide which persona, student or athlete, to attach to in order to maximize their careers or career potential. Going into the 2020 Olympics, we will see athletes who are both.