Where Do Things Go Following Virginia’s New Name, Image and Likeness Bill Signed Into Law

On April 18, 2024, Virgina Governor Glenn Youngkin signed a new Name, Image, and Likeness (NIL) bill into law that allows public and private colleges and universities in the Commonwealth of Virginia to enter into NIL contracts and compensate student-athletes directly for their use of the student-athletes’ NIL. This new NIL law goes into effect on July 1, 2024.

In addition to permitting Virginia colleges and universities to enter into NIL agreements with student-athletes, this law also permits these colleges and universities to provide resources, services, money, and benefits to outside entities that support NIL opportunities for their student-athletes. This bill now makes it clear that these applicable colleges and universities are directly permitted to work with and support NIL collectives and other athletic-department boosters in their NIL efforts with their student-athletes, activities that are still not permitted under current NCAA regulations. The law also further clarifies that a student-athlete shall not be qualified as an employee of their respective college or university solely because the student-athlete engages in NIL opportunities with their college or university.

Virginia’s new NIL law is a monumental change to the NIL landscape as it is the first law that allows a college or university to directly enter into NIL agreements with their student-athletes, an activity that is still not permitted under the NCAA’s NIL Interim Policy. However, each Virginia college and university must take efforts to comply with this law in order to be able to enter into such NIL agreements. The new statute states that in order for an institution to take advantage of this law, each institution must develop and submit to that institution’s governing board for approval institutional policies and procedures that govern the compensation of a student-athlete for the use of their NIL.

The statute undoubtedly moves the needle in the NIL universe, but it certainly begs the question: Where do things go from here? There are a handful of questions as to what can happen next in the NIL world, the most notable of those being:

1. Will any Virginia colleges or universities comply with the requirements of this new NIL bill, submit policies and procedures for the compensation of their student-athletes for approval with their governing board, and begin entering into NIL agreements with their student-athletes? This appears likely as the University of Virginia deputy athletic director was very involved with the drafting of the bill and Virginia Tech’s athletic director is considering different options under this law.
2. If any Virginia colleges or universities begin entering into NIL agreements with their student-athletes, will the NCAA take enforcement action against them, even though this law clearly states an athletic association, in this case the NCAA, is prohibited from preventing such conduct? Should the NCAA take enforcement action against a college or university, that school could pursue litigation against the NCAA as a result of its enforcement. Taking into account the recent preliminary injunction issued against the NCAA by the United States District Court for the Eastern District of Tennessee regarding the NCAA’s NIL recruiting ban, at this juncture, this appears less likely as the NCAA’s appetite for litigation on NIL matters is likely low. Also a factor: it is being reported that the NCAA is looking to settle its ongoing antitrust litigation, which could include both a monetary settlement and an agreement on future NCAA NIL restrictions.
3. Will other states adopt legislation modeled after Virginia’s bill? Both Nebraska and Mississippi recently passed legislation that accounts for the possibility that colleges or universities may direct compensate student-athletes for the use of their NIL, but neither of them expressly permits such compensation, as both require NCAA approval or a similar development. The Nebraska legislation states that “a postsecondary institution shall not compensate a student-athlete for the use of the student-athlete’s name, image, or likeness rights or athletic reputation unless otherwise permitted or authorized by: (i) a collegiate athletic association or postsecondary institution policy; (ii) a court order, or (iii) a settlement agreement.” The Mississippi bill states “a postsecondary educational institution or officer, trustee, or employee of a postsecondary institution shall have the right to compensate a student-athlete for the use of the student-athlete’s publicity rights to the extent consistent with any legally enforceable rules of a national association, a conference or any other group or organization with authority over the sport, that promotes or regulates collegiate athletics applicable to that institution.” Will Virginia remain the only state to permit colleges and universities to compensate their student-athletes? For how long?
4. Will Virginia’s new NIL legislation be the catalyst for the implementation of a federal NIL regulation? To date, there are more than a handful of pending federal bills that attempt to regulate NIL, but no one bill has gained any serious traction. However, now that a state law directly permits what the NCAA’s regulations specifically restrict, maybe that will push Congress to prioritize uniform federal regulation of all NIL activity. The University of Virginia athletic director, Carla Williams, even stated “If this law gets us closer to a federal or national solution for college athletics then it will be more than worthwhile.”

By no means are these the only four concerns in Virginia’s NIL statute. With that being said, the biggest issues to monitor are (1) whether any Virginia colleges or universities adopt the policies and procedures required under the bill, as this essentially puts the NCAA on notice that an institution intends to enter into NIL agreements with its student-athletes, and (2) will any other states adopt similar legislation allowing colleges and universities to enter into NIL agreements with student-athletes, or will they follow Nebraska and Mississippi’s lead and only permit such activity if first directly authorized by the NCAA.