College Athletes Can Now Earn Name/Fame Money…What to Know Now

Effective July 1, 2021, college athletes (“Student Athletes” or “SA’s”) are eligible to earn compensation related to the use of their Name, Image and Likeness (“NAIL$”). At least 10 states have in effect laws governing how NAIL$ will be regulated. Since the NCAA cannot create state or federal legislation, the NCAA simply suspended its rules regulating SA’s eligibility regarding NAIL$ compensation. Importantly, the NCAA retained its prohibitions on any money being used for recruitment (“pay to play”) of SAs and money compensating athletic performances (“pay for play”).

In reviewing the current, the “passed and soon to be effective”, and the proposed NAIL$ legislation from the states and (at least) five pieces of proposed federal legislation, one can discern areas of focus concerning regulation: disclosure/conflicts; professional representation; and prohibited transactions.

Hiking a football


SA’s (or their agents-attorneys, see below) will have to disclose essential terms (parties, amount of compensation) of the NAIL$ contract to the Schools, who are obligated to designate an official representative to receive the disclosure. Disclosure ensures the SA can honor the NAIL$ contract without unintentionally creating a conflict in any contracts existing between the School and an official partner. For example, assume a School has an “official” apparel partner, who provides the SA’s with gear for games or related events. SA’s with a prospective NAIL$ contracts will not be allowed to infringe on a School’s apparel contract by wearing a competitor’s brand during any “official” team activities. The SA may have the right to sport the NAIL$’ merch at any time other than “official” team activities. Disclosure permits both the School and the SA with the opportunity to comply with their respective obligations.

Professional Representation

SA’s now have the right to engage professional service providers – typically, a sports agent or attorney (each of whom must be appropriately licensed in the state where the School is located) – to ensure the SA remains in compliance. Engaging these professionals: 1) permits the SA to gain independent advice (i.e., not derived from either the School or the NAIL$ offeror); and, 2) permits the School to shield itself from the potentially negative effects of the breach of NAIL$ contract.

Prohibited Marketing Partners

Some SA’s will be barred from NAIL$ contracts that may be associated with vice. For example, some states limit SAs from marketing on behalf of companies in the following industries: adult entertainment; alcohol: tobacco or e-cigarettes; prescription drugs, controlled substances; weapons/firearms; or casinos/gambling/sports betting/online games.

College baseball pitcher

Scholarship & Tax Implications

NAIL$ contracts are not intended to result in a reduction of the SA’s cost of attendance / Grant in Aid (a/k/a scholarship) to attend School. Some states are adding educational requirements to promote financial literacy and time management skills to provide SAs with the education necessary to make informed decisions about managing this revenue and how to maximize their time in light of competing interests such as school, athletics, work, and recreational activities.

Notably, none of the effective or proposed NAIL$’ laws expressly commented on any tax consequences associated with this newfound source of revenue. SA’s must choose wisely when engaging professional representation to ensure that they remain in compliance with not only disclosures for conflicts checks, but also for tax reporting purposes (if necessary at either the federal or state level).

The passage of any federal NAIL$ legislation would preempt any state NAIL$ law. In the absence of federal law, SA’s should defer first to the law of the state in which their School is located. In the absence of state law addressing NAIL$ compensation, SA’s should rely on their School’s, which should be consistent with established NCAA regulation.

It is an exciting time for young athletes, which coincides with new responsibilities for Schools to ensure their Student Athletes are educated in these areas. SA’s are well advised to build up their own team of trusted and experienced people to provide counsel and representation.

For questions contact the author, James J. O'Connor. He is licensed by the National Basketball Players Association (NBPA) and the International Basketball Federation (FIBA) as a player representative/agent.

tag Tagged Attorneys
Barrett McNagny LLP

Legal Disclaimer

The information contained in the Barrett McNagny LLP website is for informational purposes only and should not be considered legal advice on any subject matter. Furthermore, the information contained on our website may not reflect the most current legal developments. You should not act upon this information without consulting legal counsel.

Your transmission and receipt of information on the Barrett McNagny LLP website, or sending an e-mail to one of our attorneys or staff, will not create an attorney-client relationship between you and Barrett McNagny LLP. If you need legal advice and want to establish an attorney-client relationship with Barrett McNagny LLP, please contact one of our attorneys by telephone, email, or other means of communication, and allow the attorney to confirm that the firm does not represent other persons or entities involved in the matter and that the firm is willing to accept representation. Until such confirmation is provided by one of our attorneys, you should not transmit information to us that you consider confidential. If you do provide information to us, and no attorney-client relationship is established, the information will not be considered confidential or privileged, and our receipt of such information will not preclude us from representing another client in a matter adverse to you.

Any links to other websites are not intended to be referrals or endorsements of those sites.

Privacy Policy

Terms of Use

ADA Compliance

Transparency Cover Rule: Machine-Readable Files

Contact Us
My name is
and I am a(n)
seeking legal counsel in the area of 
me at
as soon as you can.

Thank you for contacting us!

A representative will be in touch with you shortly.

An attorney-client relationship will NOT be formed merely by sending an email to Barrett McNagny, LLP or to any of its attorneys. Please do not send any information specific to your legal needs until you obtain approval from a Barrett McNagny, LLP attorney, as the content of such email will not be considered confidential or privileged. By sending us an email, you confirm your understanding of this notification. If you agree, you may use the e-mail links on this page to contact an attorney.