Can College Athletes Get Paid in Michigan? Here’s What You Need to Know.

In addition to being an experienced business lawyer, Dan Artaev is a former Division III collegiate tennis player. If you are considering a potential endorsement deal, contact Dan for a consultation to ensure your rights are protected and you are doing it right.

Yes, NCAA athletes can receive compensation for their name, image, and likeness starting in 2023, with certain caveats and limitations. The intellectual property right to one’s name, image, and likeness is called the “right of publicity” and professional athletes, musicians, and other public figures have historically leveraged that right into lucrative multi-million dollar sponsorship contracts. On December 31, 2020, Michigan became just the second state to enact such legislation (California was first with its 2019 Fair Pay to Play Act).

Under current NCAA bylaws, athletes lose their “amateur” status and become ineligible when they receive payment through commercial advertisement, promotion, or endorsement. This new law is intended to prompt the NCAA to revise those bylaws to avoid conflict with the law once it goes into effect in 2023. Presumably, if the NCAA fails to act, Michigan colleges and universities will not be able to abide by the bylaws and no longer be members of the NCAA. Besides Michigan and California, at least 19 other states are in various stages of introducing similar legislation, and this collective action will likely prompt the NCAA to act well before 2023 to bring its bylaws in line with “name, image, and likeness” statutes that are being enacted across the United States.

This does not mean that college players are suddenly free to sign multi-million dollar deals with Nike or Adidas like professionals. Nor does the law give universities the right to pay student-athletes, treat them like employees, or to give them “perks” outside the normal scholarship process. There are important limitations and nuances to consider.

  • First, the Michigan legislation does not take effect until 2023. Again, this is to give the NCAA time to enact a national policy and to update its bylaws to be consistent with state law.
  • Second, the law does not allow student-athletes to sign their own apparel sponsorship deals that conflict with a team’s contract. Essentially, when a student is engaged in official team activities, his or her commercial rights are subordinate to existing team contracts.
  • Third, the new law does not mandate that a college create any special commercial opportunities – rather, it acts as a “you shall not prohibit” mandate. The NCAA cannot bar student-athlete participation solely based on earning compensation from the use of the student’s name, likeness, or image. Colleges themselves also may not reduce an athlete’s scholarship based on an endorsement, nor can they act on behalf of the NCAA to penalize a student-athlete for receiving name, image, or likeness compensation.

Student-athletes will have certain responsibilities under the new law as well. An athlete must notify his or her school’s coordinator at least 7 days before signing any contract so that the school has time to review. In the case of a conflict between a school’s existing contractual obligations and the proposed student contract, it is on the student to renegotiate the terms to avoid such conflict. At the same time, a team’s contract shall not prevent a student-athlete from being compensated for his or her likeness when not engaged in official team activities.

Of course, the NCAA may (and probably will) act ahead of 2023 and moot the need for Michigan’s new law. The National Association of Intercollegiate Sports (NAIA), which is a group of 249 small colleges and universities similar to Division III of the NCAA, already amended its rules to allow athletes to monetize their image. The amendment, effective immediately, to the existing NAIA amateur code allows student-athletes to receive compensation from promoting commercial products, enterprises, and for public appearances, when such commercialization references the student’s status as a college athlete. The NAIA’s progressive and proactive approach thus allows its student-athletes to monetize their image immediately, without waiting for the 2023 deadline.

Finally, a word about the growing esports scene. The NCAA does not govern esports programs and thus the “amateurism” requirement does not apply. Indeed, many college-level esports athletes are former professionals and may continue ongoing sponsorship deals. The National Organization of Collegiate Esports (NACE) has its own set of bylaws, which do limit the number of years an athlete is eligible and require that participants be full-time students in good academic standing. But NACE does not require amateur status or otherwise limit the esports athlete from commercializing their name, likeness, and image.

Whatever your sport, endorsement contracts are complicated and should not be signed without the advice of counsel. Indeed, the new Michigan law expressly encourages student athletes to obtain representation and prohibits a school from interfering with that right. Contact Dan today to set up your initial consultation.

Disclaimer: This guide is for general informational and promotional purposes only. Nothing herein constitutes legal advice. Every situation is different and faces its own unique set of challenges. Do not take any action or sign any contract until you have obtained specific guidance from a qualified professional.

© 2021 Artaev at Law PLLC. All rights reserved.

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