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Businesses within Smaller Economies Should Look to Enter NIL Deals with Local Student Athletes

Updated: Jul 20, 2022

In July 2021, the US Supreme Court unanimously held that student athletes can profit off the use of their name, image, and likeness (NIL). While this means that college athletes may receive payments and benefits associated with their status as an athlete, they may not receive these benefits or payments because of any athletic activity or ability. Said otherwise, the student athlete can enjoy monetary payments, apparel, meals, cars, and other things that were provided by a business, but it cannot be a payment for any athletic activity, and instead for promoting that business.

This is something that can be enjoyed by student athletes all across the nation. For example, one region that could benefit greatly, both from the perspective of business/the economy as well as the student athlete, is Pittsburgh, PA. In light of ACC powerhouse Pitt football and the attention that it is bringing to the area, more companies in the region should look to take advantage of entering into a partnership with athletes at nearby colleges and universities. Local athletes also would like to take advantage of these new opportunities, looking to help local restaurants grow in a new and “fun” way. While NIL legislation was made with Division I athletes in mind, athletes in the other NCAA divisions are also able to enter into deals without risking their eligibility. Accordingly, athletes at Division II and Division III can also enter into deals with businesses.

A former field hockey player at Washington & Jefferson College, stated, “I would have loved to be able to represent a local company when I played Field Hockey at Washington & Jefferson College! It would’ve been a great opportunity to connect the college to the town surrounding us and be able to play for them, while also having the support of not only a business but the locals.”

Local business owners share the sentiment and are hopeful to work with student athletes over the course of their careers, as one of the founders of local real estate company Black Oak LLC, noted, “it’s a work in progress right now, but once we figure out the perfect method of an effective deal, I would absolutely welcome the opportunity to work with athletes even at smaller schools.”

As states across the country are enacting NIL laws, Pennsylvania joined the trend early on. Under Pennsylvania law, NIL compensation must be for equal market value. Additionally, student-athletes cannot receive payment for playing a sport, and any person who produces a college team jersey, a college video game, or college trading cards for profit must make a royalty payment to each athlete whose NIL is used. Under this law, student-athletes in the state can also obtain professional representation from agents, financial advisors, and/or legal representatives in relation to NIL matters. Also worth noting is that earning compensation from their NIL may not affect their scholarship eligibility, which was in line with the Alston ruling. The athletes cannot use trademarks, service marks, or logos from colleges while profiting from their NIL, and schools can prohibit a student-athlete’s compensation from activities that they deem to conflict with “existing institutional sponsorship arrangements” or “institutional values.”

Under this law, college athletes attending institutions in Pennsylvania expressly cannot profit from their NIL through partnerships in industries such as adult entertainment, products, and services, alcohol products, casinos, and gambling (including sports betting, the lottery, and betting in connection with video games and online games, tobacco and electronic smoking products, prescription pharmaceuticals, and controlled dangerous substances.”

NIL deals can run the range from cash payments to free merchandise for representing and promoting a business. Worth noting, there are a couple of reported NIL deals between local businesses and Pittsburgh area college athletes. A handful of Pittsburgh area companies that are in reported NIL deals include The Oaklander Hotel and accompanying restaurant, Spirits and Tales, Next Move, and Bowser Automotive, all with Kenny Pickett, and Tickets for Kids with Jordan Addison.

By partnering with student athletes, especially those that play a popular sport or are in a big college sports town, the business can grow its audience reach, which in turn attracts more patrons but at a much lower cost than an all-out advertising campaign. Essentially, looking at it from the business perspective, these athletes *are* the marketing campaign. Looking at The Oaklander Hotel, for example, Kenny Pickett gets free weekly meals for him and his lineman every week, and all he must do is post about it and shout them out on his social media, aside from the cost of the food or lost profits, depending on whether one thinks advertising is worth it, this is not that steep a price. Businesses could make similar deals with athletes at smaller schools. Accordingly, a few other local area colleges and universities whose athletes could advertise for local businesses include:

  • Washington & Jefferson College

  • California University of Pennsylvania

  • Edinboro University

  • Carnegie Mellon University

  • Seton Hill University

Even if companies are worried about the size of the school, that may be relevant if the business was trying to garner national attention. On a statewide and local community scale, the size of the school does not carry as much importance. Additionally, when these schools have a great athletic performance, people will travel to watch the next season, and by having the athletes advertising these companies, even people who are not from the area may come and support the business while they are in town. Lastly, given the relatively low cost of these deals and the ease of entering into such a deal, for a business, the downside (spending money) is heavily outweighed by the potential of bringing in new customers and accordingly new revenue.

Stephon Burton is a 3L at Duquesne University School of Law in Pittsburgh, PA. He obtained his undergraduate degree from Washington & Jefferson College in 2019. He can be contacted via email at [email protected], on twitter @stephonburton3 and LinkedIn

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