NIL Policy Shaping Up in North Carolina

Over the past year, name, image, and likeness (NIL) has been a hot topic for athletes and universities alike. Recently, NIL deals have made headlines, including Miami incoming transfer Nijel Pack signing an $800,000 NIL deal with Life Wallet and a collective supporting the University of Texas paying offensive linemen $50,000.

Now, reports are surfacing that the NCAA plans to introduce new rules taking aim at boosters involving themselves in recruiting by offering deals that are essentially “pay for play.” Specifically, the NCAA is concerned about the growing influence of collectives (a collection of boosters that pool resources to offer payments to athletes) and plans to introduce rules that reinforce a booster's role within a university as “representatives of the institution’s athletic interests.” Thus, per NCAA rules, boosters are not permitted to recruit prospective student-athletes. Rather, only institutional staff members can.

With new rules set to level the playing field, it is time to review what the NIL landscape looks like in North Carolina.

NCAA NIL Policy

In July 2021, the NCAA adopted an interim policy that takes a hands-off approach. Under the interim policy, student-athletes, recruits, and schools can do the following:

• Engage in NIL activities that are consistent with the law of the state where the school is located;

• If the state does not have an NIL law, engage in NIL activities without violating NCAA rules; and

• Engage professional services for NIL activities.

Importantly, the NCAA has left it to the schools/states to monitor for compliance with state law, which has led to a lack of enforcement due to broad policies/laws and states having no interest in enforcing violations.

North Carolina State Law—College Recruits and Athletes

The North Carolina General Assembly has yet to pass a bill regarding NIL, which has turned out to be a smart move due to the evolving NIL landscape. (For instance, Alabama actually repealed its NIL law after noting that it was more restrictive than the NCAA’s NIL policy). However, on July 2, 2021, Governor Roy Cooper signed Executive Order No. 223 detailing NIL limitations.

Under the executive order, student-athletes can earn compensation for their name, image, and likeness provided such compensation is not a direct inducement to participate in sports at a particular institution or enroll/continue to be enrolled in an institution for participating in sports. Further, student-athletes can contract with representatives as long as they comply with certain laws, including the North Carolina Athlete Agent Act.

Notably, North Carolina colleges and universities cannot compensate student-athletes for use of their name, image, and likeness. However, they can impose reasonable limitations on a student-athlete’s ability to receive compensation for their name, image, and likeness.

Therefore, within North Carolina’s legal parameters, student-athletes have ample opportunity to earn compensation for their name, image, and likeness. For now, as long as it is not “pay for play,” and student-athletes are abiding by their own school’s rules, an NIL opportunity should comply with North Carolina state laws.

One note, international student-athletes on F-1 visas at North Carolina colleges and universities may not be able to engage in NIL activities. F-1 visa student-athletes can engage in paid work in limited circumstances: (1) the student-athlete must have completed a full academic year, and (2) the paid work must be on-campus employment, practical training, or necessary due to economic hardship. Such harsh treatment has led to individuals and organizations imploring the United States Citizenship and Immigration Services (USCIS) to issue a policy memorandum or for Congress to pass a federal NIL law, allowing international student-athletes to engage in NIL activities.

North Carolina State Law: High School Athletes

In North Carolina, high school athletics—not including independent high schools—are governed by the North Carolina High School Athletic Association (NCHSAA). Under Rule 1.2.15 of the NCHSAA’s rules and regulations, high school athletes may not accept money. Therefore, to maintain their eligibility, high school athletes under the NCHSAA’s umbrella may not accept monetary compensation for their name, image, and likeness.

On the other hand, high school athletes at independent high schools may receive monetary compensation for their name, image, and likeness. Many have utilized their opportunities, including Vertical Academy in Charlotte, North Carolina basketball sensation Mikey Williams.

What is Next?

As noted above, NIL is an evolving landscape. Beyond the NCAA crafting new rules to limit the impact of collectives and boosters, leaders from multiple conferences are heading to Capitol Hill to discuss federal legislation. Looking forward, a federal law would benefit athletes and universities by creating a uniform rule and allowing international student-athletes to engage in NIL activities. Therefore, over the coming year, expect to see the NCAA and Congress attempt to forge new pathways for NIL.

Landis Barber is an attorney at Safran Law Offices in Raleigh, North Carolina. You can connect with him via LinkedIn or via his blog offthecourtdocket.com. He can be reached on Twitter @Landisbarber.