South Carolina's New NIL Law: Game-Changer for Collegiate Athletes

South Carolina has passed a new Name, Image, and Likeness, or NIL, law that promises to redefine collegiate athletics in the state. This law aims to level the playing field for NC double A athletic programs, ensuring they can compete with those in other states. But what does this mean for athletes, educational institutions, and legal experts?

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About the authors:
Mike Ingersoll
Bryant S. Caldwell
Matthew Bellah*

Transcript

Welcome to Womble Perspectives, where we explore a wide range of topics, from the latest legal updates to industry trends to the business of law. Our team of lawyers, professionals and occasional outside guests will take you through the most pressing issues facing businesses today and provide practical and actionable advice to help you navigate the ever changing legal landscape. 

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South Carolina has passed a new Name, Image, and Likeness, or NIL, law that promises to redefine collegiate athletics in the state. This law aims to level the playing field for NCAA athletic programs, ensuring they can compete with those in other states. But what does this mean for athletes, educational institutions, and legal experts? Let's explore.

With Governor Henry McMaster's signature on bill H. 4957, the state has positioned itself as a leader in athlete compensation. 

For decades, the NCAA has maintained that athletes were amateurs who couldn't profit from their name, image, and likeness. This all changed in 2021 when the Supreme Court ruled in NCAA v. Alston, questioning the legality of the NCAA's compensation rules and setting the stage for NIL policies. Justice Brett Kavanaugh's opinion was a turning point, stating that the NCAA’s business model would be illegal in almost any other industry.

South Carolina had an anticipatory NIL law, but it was far from perfect. The old law restricted colleges and universities in ways that other states did not, such as banning institutions from facilitating NIL opportunities for athletes. This created a need for a more comprehensive and fair law.

Signed on May 21, 2024, South Carolina's new NIL law received unanimous approval from state lawmakers. It's designed to bring the state's colleges and universities on par with those in Arkansas, Texas, Oklahoma, and Colorado. 

The new law allows schools to oversee offers, provide tax guidance, and integrate intellectual property into NIL deals. It also caps agent commissions at 30%, ensuring athletes get a fair share of their earnings.

South Carolina's new NIL law aims to create a level playing field with other states. Prominent figures like Clemson football coach Dabo Swinney and USC football coach Shane Beamer have shown strong support, understanding its importance for competitive balance.

Schools can now directly or indirectly facilitate NIL opportunities for athletes. They can provide legal reviews, allow the use of trademarks, and leverage alumni connections to help athletes secure deals.

One concern is that smaller schools may be disadvantaged compared to larger programs with more resources. This disparity could affect the ability of smaller institutions to attract top talent.

The NCAA is facing a $2.7 billion settlement for past athletes and potential future revenue sharing of around $20 billion. This context adds another layer of complexity to the NIL landscape, influencing how schools and athletes approach these new opportunities.

Despite the new law, many regulatory and compliance uncertainties remain. Schools need to stay updated with NCAA guidance and court decisions to ensure they don't inadvertently violate any rules.

South Carolina's new NIL law represents a significant shift in collegiate athletics, offering numerous benefits but also posing challenges. For athletes, it means more opportunities and protections. For schools, it requires careful navigation of legal and regulatory waters.

By staying informed and proactive, educational institutions can help athletes make the most of these new opportunities while maintaining compliance. Schools looking to better understand and implement these changes should consider consulting with legal experts and providing ongoing training for staff and athletes.

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