Pennsylvania Amends NIL Law to Allow Schools to Arrange NIL Deals

Pennsylvania Governor Tom Wolf signed House Bill 2633 into law last Thursday. The bill removes language that prohibits schools from arranging NIL deals for their student-athletes. The bill also eliminates the requirement that student-athletes share their NIL contract with the school at least seven (7) days before execution. House Bill 2633 passed the Pennsylvania state Senate by a 49-0 vote and the state House of Representatives by a 199-0 vote before the bill was signed into law by the Governor.

“This is a small, but important clarification that will give student-athletes more agency over their private contracts and the money they earn as a result,” said Pennsylvania State Senator Scott Martin. “In the absence of national standards around NIL compensation by the NCAA or Federal Law, we must do everything we can here in Pennsylvania to make sure every student-athlete that chooses one of our schools is treated fairly.”

This change in Pennsylvania’s NIL law that now allows schools to arrange NIL deals comes shortly after the NCAA issued new guidance to clarify institutional involvement in NIL activities of enrolled student-athletes. As part of the new guidance, the NCAA clarified that schools and third-party individuals or entities acting on behalf of the athletics department are prohibited from representing student-athletes in securing or negotiating NIL deals.

Although the NCAA’s new guidance prohibits schools from “representing” student-athletes in securing or negotiating NIL deals, the guidance does permit schools to provide contact information of a donor or an NIL entity (i.e., a collective) to student-athletes, introduce student-athletes to representatives of an NIL entity, and arrange for meeting space for an NIL entity and a student-athlete on campus. In addition, schools can inform student-athletes about potential NIL opportunities and can engage an NIL service provider to administer a marketplace that connects student-athletes with potential NIL opportunities without the involvement of the school. Based on these examples of permissible activities, the NCAA’s guidance does permit schools to “arrange” NIL deals to an extent.

Therefore, Pennsylvania’s amended NIL law, which now permits schools to “arrange” NIL deals, does not appear to conflict with the NCAA’s new guidance, provided that a school engages in permissible activities such as those described above and does not, directly or indirectly, represent student-athletes in securing or negotiating NIL deals. However, reasonable minds can differ on what “arrange” means in the context of NIL deals, which could lead to some Pennsylvania schools being more proactive in facilitating NIL deals, while other schools may opt for a more conservative approach. Even if Pennsylvania’s NIL law did conflict with the NCAA’s new guidance, the NCAA’s guidance is subject to state law and, therefore, Pennsylvania’s NIL law would prevail over the NCAA’s guidance.

Pennsylvania joins several other states, such as Alabama, Mississippi, Tennessee, Illinois, Louisiana, Missouri, and South Carolina, that have either repealed, amended, or suspended their NIL laws. While the NCAA’s new guidance restricts school involvement in NIL deals, Pennsylvania and other states have amended, repealed, or suspended their NIL laws to provide schools and their employees more freedom in facilitating NIL deals.

Ryan Whelpley is an Associate at Morse in Waltham, Massachusetts, where he is a member of the firm’s Corporate Practice Group. He is a graduate of Albany Law School and Union College. At Union, Ryan was a member and three-year captain of the Men’s Basketball Team. You can connect with him via Twitter (@Whelpley_Law) and LinkedIn.