Illinois Student-Athletes Can Now Enter Into Endorsement Deals

Big change is here. Governor Pritzker signed the Student-Athlete Endorsement Rights Act, meaning effective today, Illinois student-athletes at both public and private universities, no matter the sport or division, have the ability to enter into individual endorsement deals while enrolled at school. Illinois is now the latest in a growing coalition of states allowing for student-athletes’ control over their names, images, and likenesses, and undoing the NCAA’s longstanding amateurism restrictions. Illinois will be in the first wave of states with similar legislation going into effect July 1, 2021.

Moving forward, student-athletes in Illinois can now enter into publicity rights agreements with local organizations and corporations for the use of their names, images, likenesses, and voices. The NCAA, its athletic conferences, and its membership universities are not permitted to enter into publicity rights agreements with prospective or current student-athletes, nor are they able to prevent student-athletes from earning this form of compensation. Any contract, rule, or regulation to the contrary is void and unenforceable. Student-athletes also can hire agents or attorneys to represent them in endorsement deals. Once they enter into a publicity rights agreement, they are required to provide their school with written notice and a copy of the agreement within seven days.

However, student-athletes’ ability to earn compensation is not without limits. Student-athletes cannot earn compensation in exchange for their athletic ability or participation in intercollegiate athletics.  Boosters and other third parties are prohibited from using endorsement deals as an inducement to attend or enroll in a specific college or university. Schools are also permitted to impose “reasonable limitations” to protect the integrity of their mission and programs. Each college or university retains sole discretion in controlling the authorized use of its logo, uniforms, and name. Further, student-athletes are prohibited from promoting a variety of products and services, including sports betting, gambling, cannabis, alcohol, tobacco, vaping products, performance-enhancing supplements, adult entertainment, and anything else “that is reasonably considered to be inconsistent with the values or mission of their school or “that negatively impacts or reflects adversely on” the school or its program. Student-athletes cannot enter into agreements or receive compensation when performing activities sanctioned by their institutions if that would conflict with an agreement, rule, or regulation of the college or university.

Further, the new law is clear on Illinois’ stance regarding the employee status of student-athletes, stating that “notwithstanding any other provision of law or agreement to the contrary, a student-athlete shall not be deemed an employee, agent, or independent contractor of an association, a conference, or a postsecondary educational institution based on the student-athlete’s participation in an intercollegiate athletics program.” This is not a surprising position, and it does not necessarily end the discussion of what student-athletes will be considered in the future.

This and similar legislation in other states, combined with the Supreme Court’s recent decision invalidating NCAA restrictions on the payment of education related benefits,  is forcing the NCAA to finally reform its long criticized rules. Just yesterday, the NCAA adopted an interim policy allowing student-athletes to earn compensation for their names, images and likenesses until federal legislation makes its way through Congress. In the meantime, higher education institutions must prepare for this dramatic shift and will likely need support in monitoring disclosures and reporting requirements as well as the changing landscape of student-athlete rights and compensation. Please reach out to a Franczek attorney with any questions.