The State of Name, Image, and Likeness Rights (“NIL”) in Minnesota

By: Alex Smith

The landscape of college athletics has shifted dramatically since the NCAA first permitted student-athletes to receive compensation for the use of their name, image and likeness in advertisements, endorsements, and other opportunities. Since this marked shift, the rules governing NIL continue to be fluid, as evidenced by the recent changes resulting from the settlement in House v. NCAA. Despite this dynamic environment, both student-athletes and businesses should understand the current landscape so that they can ensure proper compliance and protect their interests in connection with NIL.

Approval of Direct Payment Model

Arguably the most significant result of House v. NCAA is the approval of a direct payment model between schools and student-athletes. Under this model, schools will be permitted to pay a portion of their revenue directly to student athletes. Beginning with the 2025-2026 academic year, schools will be able to pay an aggregate $20 million to student-athletes in this manner, with increases to that amount annually until 2035. The rationale behind this rule change is that schools will earn money through media deals which stem from student-athletes’ image and participation in sports.

Effect on Donors and Advertising

Another element of the settlement addresses the participation of individual boosters or booster collectives in NIL bargaining. The settlement makes clear that any payment from these entities must be for a valid business purpose, meaning “related to the promotion or endorsement of goods or services provided to the general public for profit, with compensation at rates terms commensurate with compensation paid to similarly situated individuals with comparable NIL value who are not current or prospective student-athletes at the Member Institution.” In short, as consideration for the payment, the athlete must promote a brand, business, or product, and may not be paid more than the fair market rate for doing so.

Additionally, all NIL transactions in excess of $600, regardless of whether such transaction is with a booster or other third party, must be reported by student-athletes to the newly founded “College Sports Commission” via the online NIL Go platform. The Commission will assess if booster-involved transactions adhere to the “fair market value” rule, however, this rule will not apply to NIL transactions between student-athletes and other third parties.

Student-athletes, businesses, boosters and colleges seeking counsel guidance on NIL can contact me at (612) 361-6394, alex@smithpllcmn.com, or through our web portal.