• Villanova Sports Law Blog

Get ’cha Head in the Game: Prevalence of High School NIL Deals Requires State Legislative Action


By Laura Ospina, Guest Writer, Class of 2024


Start of Something New: Alston Decision Paves the Way for High School NIL Deals


On June 21, 2021, the Supreme Court decided the ground-breaking case, NCAA v. Alston, holding that NCAA limitations on education-related compensations violated the Sherman Act.[1] This opened the door for college athletes to make money off of their name, image, and likeness (NIL).[2] In the year since the decision, the world of collegiate sports has taken many steps towards financially supporting student athletes.[3] However, one cannot help but wonder how far this decision will stretch? Specifically, how collegiate NIL rights will spill over into compensation deals for high school athletes?


Breaking Free: High School NIL Deals Begin to Soar Nationwide


Before Alston, high school athletes jeopardized their NCAA eligibility if they received payment in regards to their athleticism because being paid violated NCAA’s strict amateurism rules.[4] However, just months after the Alston decision, Jaden Rashada, an eighteen-year-old junior quarterback in California signed what was considered the first high school NIL deal with the “Athletes in Recruitment” app.[5] He received a four-figure payout for promoting the app through his social media.[6] At the time, California was one of just five states allowing high school students to profit off of their NIL.[7]


Since then, 18 states and D.C. have passed affirmative legislation in support of this compensation, expanding NIL opportunities across the country.[8] An additional three states have an unclear stance on NIL, as their legislations do not explicitly allow or disallow it.[9] Most recently, on October 10, 2022, the Oregon School Activities Association approved changes to the handbook, granting high school NIL compensation.[10] Nevada is the next state looking to join this group, as the Interscholastic Activities Association has stated that it is looking to add affirmative legislation in the impending future.[11] Across the country, Pennsylvania is also not far behind, with an amendment to the PIAA constitution, that would allow for high school NIL deals, working its way through board approval.[12]


Following these legislative changes, high school NIL deals are popping up all around the country. In a recent case, Nike signed five amateur athletes to NIL contracts, three of whom were high school basketball stars.[13] The most prominent name in this group is Lebron James’ oldest son, Bronny James.[14] This has not been his only NIL deal, as he was also the first high school athlete to sign a deal with Beats by Dre.[15] While high school NIL deals currently consist of a small percentage of overall sponsorships deals, they are ever increasing in popularity, meaning state legislations throughout the country need to prepare for their regulation.


We Are All in This Together: State Legislatures Required Adherence to NFHS Holding


While NIL seems like a great opportunity for athletes to make some extra money, restrictions for high school students still remain. Specifically, the National Federation of State High School Associations (NFHS) confirmed that “high school student-athletes CANNOT earn money as a result of their connection to their high school team”.[16] Further, NIL opportunities cannot be used as part of the collegiate recruiting process or as a “pay-for-play” opportunity.[17] While the NFHS cannot control out-of-school programs, such as AAU basketball, it suggests that students should not be profiting from participation in those programs as well.[18]


The NFHS justifies these regulations by contrasting the purpose of high school athletics from that of collegiate athletics.[19] The uniqueness of high school athletics lies in its development of a community mentality, stressing the success of the team rather than the individual.[20] Expansive monetary benefits threaten the very core of this ideal.[21] To protect this, the NFHS stressed a need to balance allowing students to make money from profitable activities while preserving the amateurism of high school athletics.[22]


While the NFHS is the governing body for high school athletics which proposes recommendations for athletic compliance, each state’s association will have the final input in determining regulations.[23] As states continue to add and amend legislature referencing high school NIL rights, they should adhere to the recommendations laid out by the NFHS in order to protect student’s financial opportunities and also promote fair competition amongst players.


Work This Out: Absences in NFHS Recommendations Force States to Fill in the Gaps


Even though the NFHS has recommended a number of regulations to protect student-athletes, they have refused to discuss key issues which states will need to address on their own. Primarily, they have not determined how to regulate the issue of minors signing legally binding contracts.[24] Since most states do not allow minors to sign contracts without a parent, legislation will need to address potential disparities between contracts signed by minor versus non-minor high school athletes.[25] An additional issue lies in the lack of regulation of the NIL deals. In college, schools are required to review and sign off on NIL deals.[26] Such a regulation does not exist for high schools, leading to questions about the extent of involvement schools can and should have in the content of the contract.[27]


References:

[1] See NCAA v. Alston, 141 S. Ct. 2141, 2166 (2021). [2] See Andrew Brandt, Business of Football: The Supreme Court Sends a Message to the NCAA, Sports Illustrated (June 29, 2021) https://www.si.com/nfl/2021/06/29/business-of-football-supreme-court-unanimous-ruling. [3] See Theresa Loscalzo et al., Legal Framework for NIL One Year After NCAA v. Alston – Next Steps for Universities, JD Supra (May 11, 2022) https://www.jdsupra.com/legalnews/legal-framework-for-nil-one-year-after-6571507/. [4] See Derek Cox, NIL & High School Athletes: Can they get paid, too?, LinkedIn (July 19, 2021) https://www.linkedin.com/pulse/nil-high-school-athletes-can-get-paid-too-derek-cox. [5] See Kristi Dosh, The First High School Football Player Signs an NIL Deal, Forbes (Dec. 23, 2021, 3:14 PM) https://www.forbes.com/sites/kristidosh/2021/12/23/the-first-high-school-football-player-signs-an-nil-deal/?sh=6ebcf3043a4d. [6] See Id. [7] See Id. [8] See Kristi Dosh, Tracker: High School NIL, Business of College Sports (Oct. 25, 2022) https://businessofcollegesports.com/high-school-nil/. [9] See Id. [10] See Karen Richards, Oregon high school athletes may now benefit from ‘name, image, likeness’ deals, OPB (Oct. 12, 2022) https://www.opb.org/article/2022/10/12/oregon-high-school-nil-deals-rules/#:~:text=Just%20over%20a%20year%20ago,to%20benefit%20from%20NIL%20deals. [11] See Ron Kantowski, NIL probably coming to Nevada high schools sooner than later, Las Vegas Review Journal (Sept. 7, 2022, 5:09 PM) https://www.reviewjournal.com/sports/sports-columns/ron-kantowski/nil-probably-coming-to-nevada-high-schools-sooner-than-later-2635843/. [12] See Mike White, PIAA vote likely means NIL deals will be permissible for Pa. high school athletes, Pittsburgh Post-Gazette (Oct. 12, 2022, 6:35 AM) https://www.post-gazette.com/sports/highschool/2022/10/11/nil-high-school-athletes-pennsylvania-piaa-bob-lombardi-competitive-balance-rule-nike-college/stories/202210110091 [13] See Nick DePaula, Bronny James among 5 hoops players to land Nike NIL deals, ESPN (Oct. 10, 202) https://www.espn.com/college-football/recruiting/story/_/id/34769258/bronny-james-5-hoops-players-land-nike-nil-deals. [14] See Id. [15] See Madison Williams, Beats by Dre Signs Bronny James to Company-First NIL Deal, Sports Illustrated (Oct. 18, 2022) https://www.si.com/extra-mustard/2022/10/18/beats-by-dre-signs-bronny-james-to-company-first-nil-deal-lebron. [16] See Dr. Karissa Niehoff, NIL Rulings Do Not Change for High School Student-Athletes, National Federation of State High School Associations (July 7, 2021) https://www.nfhs.org/articles/nil-rulings-do-not-change-for-high-school-student-athletes/?utm_source=delivra&utm_medium=email&utm_campaign=The%20Voice%20-%20July%207&utm_id=3036823&utm_term=NIL+Rulings+Do+Not+Change+for+High+School+Student-Athletes&dlv-emuid=4b391140-c666-4c71-bceb-07205ae7e1b9&dlv-mlid=3036823. [17] See Id. [18] See Id. [19] See Dr. Karissa Niehoff, No NIL (Name, Image, Likeness) Benefits While Wearing High School Uniform, National Federation of State High School Associations (June 8, 2022) https://www.nfhs.org/articles/no-nil-name-image-likeness-benefits-while-wearing-high-school-uniform/. [20] See Id. [21] See Id. [22] See Jeff Tracy, High school athletes cash in big off NIL deals, Axios (May 26, 2022) https://www.axios.com/2022/05/26/high-school-athletes-nil-deals. [23] See Lee Green, 2021 Sports Law-In-Review, National Federation of State High School Associations (Dec. 20, 2021) https://www.nfhs.org/articles/2021-sports-law-year-in-review/. [24] See Michael Denbow & Rebecca M.W. Sherman, NIL Compensation for High School Athletes: The Future is Now, Stites & Harbison (Apr. 27, 2022) https://www.stites.com/resources/client-alerts/nil-compensation-for-high-school-athletes-the-future-is-now. [25] See Id. [26] See Id. [27] See Id.