United States:
Georgia legislation brings a new approach to state NIL laws
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In early May, Georgia Governor Brian Kemp signed House Bill 617 on the Names, Images and Likeness Act (NIL). Georgia law, which governs the compensation student athletes can receive for commercializing their NIL, goes into effect at the same time as the laws passed by several other states on July 1, but includes some specifics that others have not yet passed States have been adopted. The new Georgia law gives colleges and universities the ability to require (or allow?) Their student athletes to share up to 75% of the compensation related to the use of their NIL – such compensation would include sponsorship, endorsements, Social media marketing includes revenue and more. Such a model had previously been proposed by Senator Corey Booker and other federal congressional officials. An additional aspect of Georgia law is that during the first and third years on campus, colleges can assign up to 5 hours of required financial and life skills to be trained in areas such as budgeting, debt, financial aid, and other life skills. This aspect of the bill, which focuses on a holistic commitment to the thriving of student athletes by equipping them with knowledge for today’s marketplace and for life after sports, has been celebrated by many.
It is at the discretion of each Georgia school whether any type of revenue sharing agreement is in place. However, if such an arrangement is made, it will take the form of an escrow account or pool of funds, with the school’s sports director being the custodian of such an account. Student Athletes are eligible for amounts from the Shared Pool starting one year after the student graduates or left school for a pro-rata portion of the Funded Contributions based on the number of months the individual has been at the school as a Student Athlete.
What impact could this have on the world of college football and high-stakes basketball recruitment? Schools clearly need to consider the potential recruitment impact that a pooling arrangement foreseen in the draft law may have. If star recruits – who presumably ceded revenue from their NIL to other athletes who were unable to generate that much NIL revenue in a pooling arrangement – or faced the prospect of attending another school, where this has not been the case, then the potential economic and recruiting landscape impact may be important to these highly touted prospects. In such a competitive environment, the University of Georgia and Georgia Tech – the two most important teams in the college football world potentially affected by this bill to date – recently announced that neither plan to introduce such a revenue-sharing model, which is hardly surprising given the negative job interviews this would allow against the schools.
Since the unique aspects of this bill are not mandatory, it will be interesting to see how things play out as Georgia schools assess how they plan to incorporate the components of HB 617 into their respective NIL regulations. Stay tuned for future blog updates on NIL legislation, including an upcoming look at proposed federal laws that would allow student athletes to unionize.
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