At UK, 500 contracts in four months shows the ‘Wild West’ of NIL in college sports.
I’ve long been a proponent of compensating student athletes, based on the obscene amounts of money made off them by universities and coaches every year.
But the more I read and hear about the NCAA’s answer to this issue — Name, Image and Likeness — the more I’m convinced that the whole situation will turn into a maelstrom of athletes, agents, administrators, advertisers, and of course, boosters, all of them trying to score in the latest money game.
I was not made more confident by a legislative hearing in Frankfort, at which state legislators are being asked to devise rules that neither Congress nor the NCAA have seen fit to address. Right now, Kentucky’s colleges and universities are working off an emergency order from Gov. Andy Beshear and their own internal regulations.
“We’re seeing states have to craft these NIL bills because of the NCAA’s failure to do so,” said Sen. Morgan McGarvey, D-Louisville, who has taken the lead on this legislation with Sen. Maxwell Wise, R-Campbellsville. “We’re working with all of Kentucky’s colleges and universities to make sure we have the best product for the student athletes of the state.”
“It’s kind of like the Wild West,” Wise told me last week.
At Monday’s hearing, representatives from the University of Kentucky and the University of Louisville said they needed three points addressed in legislation: rules that allow students to make money, rules that allow universities to put restrictions on those deals, and rules that give the schools immunity from potential NIL-related lawsuits.
The legislation will be an umbrella over detailed rules schools are making on their own. According to Ben Roberts, UK, for example, created a lengthy set in July, when NIL went into effect: “According to UK’s guidelines, its athletes will not be permitted to endorse lotteries, casinos, sports wagering facilities or other similar outlets; any products and establishments that market products exclusively to people 18 years of age or older; adult entertainment (examples: strip clubs and pornography); and tobacco, marijuana, nicotine vapor products.” Because UK has a major contract with Nike, that’s what athletes have to wear during all team activities, but they are allowed to do deals with other apparel companies outside of that.
Oh, and not get in the way of the many and various trademark rules that universities have established. I think at this point UK owns all the rights to the word Kentucky, so it could get confusing.
And speaking of confusing, can you imagine if one athlete gets a contract with a car dealer that is not the car dealer the school already has a relationship with? And what about booster trouble? UK’s own rules allow players to sign contracts with legitimate businesses that happen to also be boosters, so long as that agreement is not also brokered by the university as a form of recruitment. Sounds ... murky, to say the least.
NIL deals can’t be used to recruit, but they will still be a huge influence in recruiting as several sports writers pointed out after the UK Men’s Basketball team signed a cryptocurrency deal that will pay them monthly. Murky and complicated.
‘They smell dollars’
Rachel Baker, UK’s Executive Associate AD for compliance, is charged with making sense of this whole rigmarole. She personally reviews every contract that comes through, roughly 500 since the process began in July.
“It’s a disclosure process, just to make sure it complies with the executive order,” she said. “We’re not reviewing whether or not they are good deals, and that’s what we emphasized to our student athletes, that’s why we need to educate, and provide the resources for people who can help.”
She thinks the legislature may need to review current laws on agents. “A lot of people outside the university that now want to be involved because they smell dollars,” she said. “How do we make sure the good people in that space and help weed the bad actors out?”
But Baker said she’s been extremely pleased to see the diversity of NIL deals outside of basketball and football.
“We knew how this would impact our high profile athletes,” she said. “What we were unsure of is the impact on our female student athletes. But there are lots of opportunities for them as well, particularly our national champion volleyball team, they are third behind football and basketball in terms of transactions. That has been really good to see.”
I was also concerned about open records, another area that has yet to be resolved. But the truth is that both the athletes and the companies are invested in making these deals public. Just follow them on social media, where UK women’s basketball star Rhyne Howard talks about the importance of car insurance.
Student athletes own their name, image and brand, but they also have to learn to keep that separate from UK intellectual property rights, even though being an athlete at UK is what makes them attractive to companies in the first place.
“We’ve spent a lot of time with parents on that, to make sure everyone understands that distinction,” Baker said. “There’s a lot of education in that space.”
Now the hard part falls to the General Assembly, where lawmakers are under pressure to put together a good law that is both detailed enough to cover all the angles and broad enough to govern every school in the state. Good luck to them.
Editor’s Note: The story has been updated to reflect the number of NIL contracts UK athletes have signed.
This story was originally published November 16, 2021 at 1:36 PM.
