NIL’s New Rulebook for Student Athlete Influencer Marketing

Arch Manning collaborating with Warby Parker in a stylish pair of frames; Juju Watkins donning her USC jersey in a State Farm commercial. Seemingly everywhere you turn, a student athlete is partnering with big brands to market their products. There is no denying that college athletes are some of the most prolific marketing influencers in today’s world. These commercials and advertisements, though fun and often light-hearted, are the subject of an extensive and evolving framework of compliance and reputational risk if the deals are mishandled. Through NIL (Name, Image, and Likeness), these young athletes have essentially become businesses themselves, and contracting with these businesses comes with an extensive playbook.

The Rules of the Game

The NCAA NIL Rule affords student athletes the right to earn money from their name and persona, placing the profit generated from highly televised and widely watched sporting events largely in the players’ hands. Naturally, where there is profit, there are important regulations. NIL was implemented in 2021, and since then, the rules and regulations governing how the program operates have evolved significantly.

In addition to following the NCAA NIL policy, athletes and companies that hire them must comply with the NIL laws of the state in which their school is located. If a state does not have its own specific NIL laws, schools set their own policies, subject to the NCAA’s overarching NIL policy. Several states have implemented NIL statutes that regulate compensation, for example, in ways that protect scholarships and/or restrict certain types of deals or institutional involvement. These laws often also address recruitment-related inducements, booster and collective activities, and disclosure obligations. Furthermore, the College Sports Commission (CSC) has instituted reporting requirements based on compensation amounts that subject these high-dollar deals to substantive scrutiny. Amid this evolving regulatory framework, NIL deals have become the subject of many lawsuits, and Congress has floated multiple bills aimed at federal NIL regulation, though none have yet been adopted. Given this ever‑evolving legal landscape, it is easy to see how critical compliance is for companies looking to solicit student athletes for their marketing ventures.

Risky Business

If a company enters an NIL deal with a student athlete, it must ensure it is in compliance with all applicable regulations. If such a deal looks like an impermissible pay‑for‑play scheme or fails to cooperate with institutional reporting, it can drag the brand into investigations or public enforcement actions. In addition, the contracts underlying these deals are also major vessels for risk exposure, especially as many NIL contracts are drafted with urgency and rely on templates for other types of social media influencers. This is a risky practice, as student athletes are subject to an even wider net of specific state, school, and NCAA regulations.

Tax risks also abound in this arena. NIL payments create reporting and withholding responsibilities that can be missed if companies run deals “off the books” or through informal channels. Structures that look like income‑sharing or “advances” against future NIL earnings have already drawn comparisons to student‑finance products that regulators later re‑characterized as loans. Companies should, therefore, structure these deals carefully to ensure the transactions they agree to fit the intended form.

Given these complex issues, there is real potential for NIL violations that can turn into reputational disasters for brands if they are not in compliance. Mismanaged deals, predatory terms, or a perception that the brand is exploiting young athletes can create blowback with fans, schools, and regulators. Critically, NIL disputes now routinely play out on social media, multiplying the reputational stakes. The same high‑profile nature of a superstar student athlete that generates massive advertising power comes with the opposite but proportional risk of widespread public reputational damage if these deals are mishandled.

How to Mitigate the Risk and Maximize the Reward

Despite the sometimes treacherous and evolving regulatory landscape surrounding NIL deals, there are steps companies and brands can take to mitigate these risks and ensure compliance with all applicable rules. Primarily, companies would be wise to treat NIL as a regulated product. NIL deals should be routed and vetted using the same level of legal and compliance review as other high‑risk third‑party engagements. Time spent developing NIL templates that ensure all requirements are met would also be a smart undertaking to minimize risk. With the right playbook in place, NIL deals can be real winners for brands and athletes alike.

Elizabeth Rogers

Legal Research Associate, TRACE