RALEIGH, N.C. (WGHP) — The North Carolina Board of Education heard a proposal to allow public high school athletes to earn compensation through “Name, Image and Likeness” on Thursday morning.
In recent years, “Name, Image, and Likeness” — commonly referred to as NIL — has become the primary method of player compensation as it allows for “amateurism” to still exist in some capacity.
The conundrum with player compensation
Amateurism is “the practicing of an activity, especially a sport, on an unpaid rather than a professional basis,” according to the Oxford Languages definition.
In recent news, the mother of top recruit and Grimsley High School star quarterback Faizon Brandon is suing the North Carolina State Board of Education over its rules on endorsements, raising the question of whether or not high school athletes should be able to earn a profit.
In the lawsuit, the Brandons challenged the Board of Education on policy ATHL-008 which went into effect on July 1. Under this policy, no student-athlete at a public school is currently allowed to enter an NIL agreement that features any of the following:
- Public appearances or commercials
- Autograph signings
- Athletic camps and clinics
- Sale of NFTs
- Product or service endorsements
- Promotional activities, including in-person events and social media advertisements
While the policy does not outright ban NIL, the prohibited activities encompass what most competitive NIL offers would entail.
Brandon, who committed to the University of Tennessee on August 3, would in theory be well positioned for NIL opportunities given his highly ranked status and pending commitment to a major college football brand.
ATHL-008 was put in place as a temporary rule until Jan. 2025 when a permanent ruling will be put in place.
ATHL-008 effectively reversed the North Carolina High School Athletic Association’s 2023 decision to allow certain NIL opportunities.
NCBOE reveals new rules allowing NIL
On Thursday, the NCBOE met and reviewed the recommended rule changes regarding NIL.
The proposed changes defined NIL as “the use of a student’s name, image, or likeness for commercial purposes and in exchange for compensation to the student or an immediate family member of the student.”
Compensation was defined as “anything of value to the student or an immediate family member of the student including cash, in-kind gifts, discounts and other tangible benefits.
The new NIL rules would allow players to earn compensation in the following ways:
- Public appearances or commercials
- Autograph signings
- Athletic camps and clinics
- Sale of NFTs
- Product or service endorsements
- Promotional activities, including in-person events and social media advertisements
The ruling would effectively reverse all of the bans put in place by ATHL-008.
The compensation a player receives cannot be based on the quality of their athletic performance and their parents/legal guardians must be party to the agreement if the student is a minor.
Stipulations regarding NIL compensation include students needing to provide a copy of the NIL agreement to their head coach, athletic director, principal, local superintendent and chairperson of the local board.
Students and their parents/legal guardians would also need to complete a course on NIL through the National Federation of State High School Associations.
Students would not be allowed to reference their school, conference or any other administering organization during NIL activities. They also would not be allowed to be compensated for using any intellectual property belonging to those organizations nor may they appear in their athletic uniform.
Students would not be allowed to advertise any third parties while competing in an athletic event or during any school activities. Students also cannot display the logo of a third party unless it is a part of the school’s standard uniform.
The following activities would not be allowed to be promoted by students:
- Adult establishments or entertainment services
- Alcohol or alcoholic products
- Tobacco, vaping, or nicotine products
- Cannabis or related products
- Controlled substances
- Opioids or prescription
- Weapons, firearms or ammunition
- Casinos or gambling, including sports betting
- Activities that would disrupt the operations of the school
A waiver would also need to be signed releasing any administering organization from liability in order to receive NIL benefits.
School athletic directors would be required to file copies of NIL agreements with administering organizations and those organizations will provide summary reports of all NIL agreements to the Board of Education annually.
Athletic directors, coaches, other school employees, booster clubs and NIL collectives would be prohibited from:
- Promising an NIL deal to a student or students in exchange for athletic participation or transfer to another school
- Acting as an agent
Anyone who violates the proposed NIL rules would be subject to penalty. The rules apply to any NIL agreement signed prior to graduation regardless of when the benefits accrue.
That means that third parties cannot offer delayed benefits to students after they graduate as a way to get around NIL rules.
There will be several public hearings between now and Jan. 2025 when the proposed rule changes could be put into effect.
Other schools, other rules
Private schools are not beholden to the Board of Education’s ruling and are still free to use NIL with student-athletes.
This dichotomy between what private schools and public schools are beholden to came to the forefront when Reidsville High School star Kendre Harrison transferred from Reidsville High School to Providence Day School — a private high school in Charlotte.
Harrison — the 2023-24 MaxPreps Male National Athlete of the Year — is a top-ranked player in both basketball and football and helped lead Reidsville to state championships in both football and basketball last season.
For his part, Harrison told the Charlotte Observer that NIL was not a factor in his decision saying that he has “no NIL” and went to Providence Day “off the strength of me trying to get better.”
How did we get here?
In 2021, the bubble on player pay burst at the college level when the Supreme Court of the United States ruled that the NCAA’s restrictions on players profiting from NIL violated antitrust laws.
Under the NIL structure, athletes earn a profit from their image and brand as individuals rather than receiving compensation directly from the school they play for. This structure technically maintains the standard of “amateurism.”
However, this grey area is not without controversy among fans and coaches. Several college football coaches have complained publicly about NIL.
UNC’s head coach Mack Brown said earlier in August that the Tar Heels’ star running back Omarion Hampton was offered four times as much money as he currently makes in NIL to leave North Carolina.
Oklahoma State head coach Mike Gundy went on the record about telling his players to “tell [their] agents to quit calling us and asking for more money. It’s non-negotiable now. Start again in Decemeber.”
According to the current NCAA bylaws, “an individual may receive compensation for the use of the individual’s name, image and likeness, which may be secured or compensated based, in whole or in part, on athletics skill or reputation. Name, image and likeness activities may not be used to compensate a student-athlete for athletics participation or achievement.”
While schools are allowed to “provide assistance and services” to players in finding NIL opportunities, they are not allowed to compensate them directly.
Despite the limit on direct compensation, the current system creates an environment that can favor larger schools, with larger alumni networks and thus better capabilities of providing more profitable NIL opportunities.
The current bylaws of the NCAA state that “name, image and likeness activities may not be used as an inducement for an individual to enroll or remain enrolled at a specific institution.” However, comments from coaches such as Gundy and Brown clearly indicate that there are some people in the industry who believe that NIL opportunities are being used as an incentive to sway commitments from athletes.
What are the pros and cons of player compensation?
If the same standard that was set by the SCOTUS decision and the principles of the free market were applied, players should in theory be allowed to be compensated for their likeness if there is another party that is willing to do so. However, as has been seen in college football, that would come with some very serious drawbacks that could threaten the stability of high school athletics in the state.
There would first be the issue of high school sports being professionalized in a way that violates the spirit of what high school athletic competitions currently represent.
Also, high schools from smaller communities with fewer NIL opportunities could struggle to retain their star athletes as they could possibly be unable to compete financially.
There is also the issue that exists presently of private schools not being beholden to the same rules as public schools and possibly having an unfair advantage when it comes to NIL.
As seen in college football, even though there are rules that claim that using NIL as an incentive to induce a player to attend a certain school is not allowed, there are clearly many coaches and fans who are of the opinion that NIL is being used in that fashion and that certainly will always be a concern in a world with NIL for high school athletes.
On the contrary, North Carolina public high schools could also stand to lose out on their star athletes to other schools in other states that do not restrict access to NIL opportunities in a world where the current rules remain in place.
Regardless of where you stand on the matter, the issues pertaining to NIL and player compensation will be at the forefront of the discussion when it comes to the future of high school and collegiate sports.
