New York Passes Name, Image, and Likeness Law for College Athletes

The New York Collegiate Athletic Participation Compensation Act allows student athletes at colleges in New York to receive compensation for their name, image, and likeness and to use agents for endorsement deals—without forfeiting their scholarships or eligibility to play.

New York Governor Kathy Hochul recently passed a law that, effective immediately, allows student athletes at colleges in New York State to receive compensation for using their name, image, and likeness (NIL) to endorse products and services, without the risk of losing their scholarships or eligibility to participate in their sports. The law, codified at Section 6438-a of the New York Education Law, passed the New York State Senate on May 31, 2022, and the New York State Assembly on June 3, 2022, before being signed by Governor Hochul on November 21, 2022. In passing the law, which comes on the heels of the National Collegiate Athletic Association’s (NCAA’s) recent guidance clarifying colleges’ involvement in students’ NIL deals, New York joins several other states with similar NIL legislation (including California, Pennsylvania, and New Jersey).

What the Law Does

The law permits student athletes to obtain compensation for their NIL through camps and clinics, as well as brand partnerships, media appearances, and social media advertisements, among other things. In addition to allowing student athletes to enter into NIL deals, the New York law provides guidance and resources to student athletes navigating this new landscape, including by allowing them to be professionally represented by an agent or attorney (provided they are otherwise registered under the New York General Business Law or admitted to the New York bar, respectively).

The law also requires colleges to offer assistance programs to guide student athletes on topics related to NIL deals, including financial literacy, career development, and mental health support services.

While New York’s NIL law is unlike that of other states in that it does not explicitly prohibit deals endorsing certain categories of products or services (e.g., alcohol, tobacco, and gambling), there are still a number of restrictions on the NIL deals that New York student athletes may enter into.

For example, the law prohibits student athletes from endorsing products or services that conflict with existing sponsorships or endorsements between their college and third parties. The law also includes a general prohibition on endorsement deals that, from the college’s perspective, “would reasonably be judged to cause financial loss or reputational damage to the college,” providing broad bases to potentially nullify NIL deals.

Implications

In passing the law, New York follows a number of states that have passed similar NIL laws over the last few years. In September 2019, California passed the first law of its kind with the Fair Pay to Play Act. Since then, at least 30 states have followed suit. These laws have a potentially significant upside for at least some student athletes and the businesses with which they work.

That said, the effects of the New York law may be minimal for most student athletes as NIL deals tend to gravitate toward the most prominent athletes at the largest schools in the most lucrative sports. In that regard, the law suggests that colleges take additional measures to support all student athletes by establishing opportunities like savings plans and funds for financially distressed student athletes.

Businesses interested in signing NIL deals and colleges alike should review the New York law to ensure that potential NIL deals are compliant. Such companies and institutions should also remain cognizant of similar legislation at the state and federal level, as well as the implications of these laws.

In particular, NIL laws, which effectively remove certain barriers that prevent student athletes from earning compensation, potentially create increased risk of claims that these student athletes should be deemed employees of their respective colleges. For instance, if student athletes are deemed employees for purposes of the Fair Labor Standards Act—which is the question currently before the US Court of Appeals for the Third Circuit in Johnson et al. v. National Collegiate Athletic Association et al.—colleges will be required to comply with federal minimum wage and overtime requirements, and may soon find themselves subject to other labor and employment laws, such as Title VII.

The legal landscape in this arena is changing quickly. Colleges and businesses should ensure that they stay ahead of the game by monitoring NIL and other laws that may impact college sports.