NIL Compensation for High School Athletes: The Future is Now
Stites & Harbison Client Alert, April 27, 2022
Next month, the Ohio High School Athletic Association (“OHSAA”) member schools will vote on whether to allow high school athletes to be paid for their name, image, and likeness (“NIL”). If approved, Ohio will join Alaska, California, Colorado, Kansas, Louisiana, Nebraska, New Jersey, New York, and Utah, which already allow high school athletes to profit from their NIL. Other states, like Tennessee and Mississippi, recently amended their NIL statutes in a manner that will likely allow for NIL in high school sports.
The National Federation of State High School Associations (NFHS), like the NCAA, has failed to act on the issue. NFHS has maintained its July 7, 2021 position that changes in state law do not affect high school student athletes. In other words, high school athletes cannot earn NIL compensation. However, the NFHS’s position has been ignored and overruled by local athletic associations or law in a growing number of states.
Like the NFHS, the Kentucky High School Athletic Association (“KHSAA”) has not addressed changes in the national NIL landscape. The KHSAA’s position, issued on July 27, 2021, maintains high school athletes cannot receive cash payments for their NIL. However, that statement was issued before the “Pay to Portray Act” (the “Act”), which provides NIL rights to college athletes, was signed into law. Importantly, however, the Act does not prohibit high school athletes from profiting from their NIL. Since the Act does not prohibit high school athletes from payment for NIL, the KHSAA may modify its rules to allow high school athletes to receive NIL compensation without running afoul of Kentucky law.
High school athlete participation in the NIL market presents many unique issues. For example, unlike their college counterparts, most high school athletes are minors (under the age of 18). In most states, minors cannot enter legally binding contracts without a parent or guardian, and once they turn 18, the (former) minor must ratify the agreement within a certain time period in order for the agreement to remain enforceable. Another issue is that there are no safeguards in place to police NIL deal making. At the college level, the Act requires the schools to review and sign off on all NIL deals. However, the KHSAA cannot reasonably expect or require public high school athletic departments (often run by teachers) to assess every NIL deal presented to its students. This lack of oversight subjects minors to potentially harmful deals and other legal complications.
It is only a matter of time before high school athletes in every state can profit from their NIL. This growing trend makes it increasingly important for Kentucky and the KHSAA to examine the issue and clarify existing rules to allow high school athletes to profit from their NIL and establish safeguards protecting these athletes. If not, Kentucky high schools will be unable to keep top athletes and state universities will lose a significant recruiting advantage.
In summary, it is inevitable that Kentucky will allow high school athletes to profit from their NIL. It is critical for high school athletes and their guardians to fully understand the rules prescribed by the KHSAA and the Act to maximize the benefits of NIL, while avoiding potential risks and liabilities. For more information on navigating NIL deals for student athletes and how to maximize NIL opportunities, contact a member of Stites & Harbison’s Sports and Entertainment Service Group.