The NIL Paradox: How Unfettered NIL Rights Will Shrink Student-Athlete Opportunities

Abstract

In 2019, California passed the Fair Pay to Play Act which granted student-athletes (“SAs”) attending institutions within the state the right to monetize the use of their name, image, and likeness (“NIL”). That enactment ushered in the most transformative change in college sports since the National Collegiate Athletic Association’s (“NCAA”) decision over 50 years ago to allow freshman eligibility to play varsity football. The California law, coupled with the subsequent Supreme Court decision in NCAA v. Alston, which held that the NCAA’s limitations on education-related SA benefits constituted an unlawful restraint of trade under the Sherman Act, unleashed a tidal wave of states legislation conferring SAs within their borders the right to receive compensation for the use of their NIL. In the immediate aftermath of Alston, more than 30 states enacted a version of the Fair Pay to Play Act, creating a dizzying patchwork of NIL laws. In scarcely the two years since Alston, the NIL landscape has devolved into what many describe as the “Wild West” resulting in virtually every stakeholder in this new economy—the NCAA, college leaders and coaches, SAs, and collectives—to plea for federal regulation to bring uniformity and order to the extant chaos. The author concurs with the call for reform and Congressional action. However, this Article argues that key areas of NIL reform—expanded access to institution intellectual property and assets (“IP”) and the elimination of restricted deal categories—are ill-considered and, indeed, will have a material, adverse impact on athletic department wellness.