By Miranda Martinez.
For decades, the National Collegiate Athletic Association (“NCAA”) has prohibited its student-athletes from accepting money in an effort to preserve amateurism—the pillar upon which the NCAA aims to differentiate itself from professional sports. Top NCAA Division I schools generate nearly $8.5 billion in annual revenue; however, less than 7% of that revenue goes to athletes in the form of scholarships or living expense stipends. Student-athletes are barred from sharing in the profits in the name of amateurism. According to the National Bureau of Economic Research, “[w]hile intercollegiate sports are often described as student activities undertaken by amateurs, the economic reality is that athletic departments have developed into complex commercial enterprises that look far more like professional sports organizations.”
The tension between amateurism and professionalism reached its peak in 2021 when the Supreme Court heard NCAA v. Alston, a lawsuit brought by several Division I football and basketball players against the NCAA. In this suit, student-athletes argued that the NCAA’s rules limiting non-cash educational benefits violated federal antitrust law. The Court agreed. While allowing student-athletes to monetize their Name, Image, and Likeness (NIL) rights was a separate issue, the Court’s decision seemingly had broader implications and prompted the NCAA to drop its resistance towards compensating athletes for their name, image, and likeness.
The Supreme Court’s ruling rang in a new era of college athletics. A mixture of state laws, NCAA rule changes, and university policies that went into effect on July 1, 2021 have provided student-athletes with opportunities to monetize their name, image, and likeness rights. Following Alston, on June 28, 2021, the NCAA voted to suspend amateurism rules related to NIL and adopt an interim NIL policy. Under the interim policy, athletes can engage in NIL activities consistent with the law of the state in which the school is located and use a professional services provider for NIL activities. Additionally, college athletes attending a school in a state without an NIL law can engage in NIL activity without violating NCAA rules. College athletes, however, must report NIL activities to their school and are still prohibited from receiving pay-for-play.
The Problem for International Student Athletes
In what is already an ambiguous and unsettled NIL landscape in college sports, the matter becomes increasingly complex when international student-athletes are factored into the equation. For international athletes currently in the country on student visas, there is extreme confusion as to whether they can profit off of their name, image, and likeness like their US-born counterparts. This uncertainty has left athletes and universities alike scrambling to navigate the issue. To err on the side of caution, most universities have announced that foreign student-athletes on visas must avoid engaging in NIL deals altogether.
At the time this was written, the U.S. Department of Homeland Security had not provided any guidance as to whether some, or all, types of NIL deals constitute “employment” for the purposes of immigration status. In June 2021, the Student and Exchange Visitor Program (“SEVP”) announced that it was aware of and actively monitoring proposed federal and state legislation pertaining to the use of NIL for student athletes including F and M nonimmigrant students.
Most international students come to the United States on an F-1 visa, which is reserved for academic studies. While F-1 visas permit for part-time on-campus employment, off-campus work is prohibited. Employment, for the purposes of student visas, refers to “an exchange of compensation for services, with compensation taking the form of money, clothing, or other benefits.” Accordingly, violations of employment status can arise from accepting compensation for services and from performing work outside of the specific regulations set forth under the visa category. These violations are not taken lightly and can even result in the visa’s cancellation. These violations may also have long-term implications for international student-athletes, such as hindering their ability to receive permanent residency or citizenship down the road.
Effective July 23, 2021, Arizona enacted its own legislation concerning the ability of intercollegiate athletes to “earn compensation from the use of the student athlete’s own name, image or likeness to the extent allowed by the rules established by the relevant national association.” ARS 15-1892 protects student-athletes from being denied scholarships or being deemed ineligible by earning NIL compensation. The statute also provides that a student-athlete may not enter into a contract that conflicts with their team contracts, and also sets out agent licensing requirements.
Arizona’s law, however, is different in the sense that it prohibits student-athletes from entering into an NIL contract if doing so “violates the intellectual property rights of any person, including the student athlete’s postsecondary education institution.” Additionally, Arizona’s law is unique in the sense that it does not require student-athletes to disclose endorsement contracts, which is required by NIL legislation in many other states. Home to four NCAA Division I Schools, international student-athletes and administrators in Arizona should be mindful of the additional layer of complexity NIL deals present for international students.
While international student-athletes wait for Congress to pass federal legislation or for the United States Department of Homeland Security to announce further guidance, NIL policies will continue to have a substantial impact. Accordingly, international student-athletes, individual institutions, and businesses should be mindful of state NIL laws and their impact on these athletes.