Before 2019, the International Olympic Committee (IOC) and the National Collegiate Athletic Association (NCAA), the bodies that respectively govern Olympic and collegiate sports, restricted athletes’ ability to profit from their name, image, and likeness (NIL). In 2019, both organizations succumbed to pressure from state and national governments and loosened restrictions, finally giving athletes increased opportunities to market themselves and profit from their right of publicity.
Despite Gains, Restrictions on Athletes’ Right to Profit from Their NIL Remained
Olympic and collegiate sports were both founded on the premise of amateurism and the bedrock principle that athletes could only maintain their eligibility to compete by not accepting payment of any kind. Both the IOC and NCAA viewed sports as a hobby and therefore wanted only “amateur” athlete participants. Both organizations believed amateurism ensures that athletes compete only for the love of the game.
Olympic and collegiate sports grew into a sizable industry, and the revenue increased exponentially. The amateur requirement became more outdated and controversial. In the second half of the twentieth century, the IOC granted eligibility to professional athletes; the NCAA allowed athletes to receive scholarships. Despite these gains, significant restrictions on athletes’ right to profit from their NIL remained.
Lawsuit Challenged Marketing Restrictions Placed on Athletes During the Olympic Games
In February 2019, the IOC and the German Olympic Committee settled a lawsuit filed by an association of German Olympic athletes and the Federal Association of the German Sport Goods Industry that challenged restrictions placed on athletes’ right to market themselves during the Olympic Games. In DOSB & IOC v. Athleten Deutschland, BDSA & Athletes, the claimants alleged that the IOC restrictions, specifically Rule 40.3 of the Olympic Charter, violated the Treaty on the Functioning of the European Union. The claimants asserted that the IOC was abusing its dominant position over the sports sponsoring market by unreasonably restraining athletes’ abilities to use their NIL for advertising purposes during the Olympic Games.
The landmark settlement resulted in significant changes to the Olympic Charter and corresponding guidelines in June 2019. The new general rules gave Olympic athletes the freedom to market themselves and profit from their NIL during the Olympic Games. The new IOC rules now allow:
- Athletes to provide “messages of thanks” on their personal social media accounts or personal websites to their own sponsors; and,
- Non-Olympic sponsors that partner with athletes to:
- recognize athletes and their performances during the Olympic Games period on social media or websites; and,
- work with athletes on “generic advertising” campaigns where the athlete’s NIL is the only connection between the Olympic Games and the marketing activity.
Although Olympic athletes do not have complete autonomy, these new freedoms are a significant step forward. They will allow Olympic athletes to take financial advantage of the small window available to them during the Olympics.
In response, the US state and federal legislatures began drafting laws to allow collegiate athletes to receive compensation for the use of their NIL. In May 2019, the NCAA responded by creating a working group to examine issues related to the use of a collegiate athlete’s NIL.
California Legislature Enacts the Fair Pay to Play Act
Pressure for the NCAA to act reached its apex in October 2019 when the California Legislature became the first to enact a law (the Fair Pay to Play Act) that permits in-state college athletes to earn compensation for the use of their NIL. After some pressure, the NCAA announced it would, for the first time, permit students participating in athletics the opportunity to benefit from the use of their NIL in conformity with the collegiate model.
While it is still unclear what the new change will mean, each NCAA Division must update its bylaws accordingly. An official vote to approve them will be held in January 2021, at the NCAA Convention.
The new IOC rules should guide each NCAA Division’s updated bylaws and the development of sensible regulations for collegiate athletes. The IOC model permits collegiate athletes to create generic advertisements with sponsors, use their personal social media accounts to thank sponsors, and earn money on any advertisements shown on their own websites or personal channels (e.g., Facebook and YouTube). Moreover, a collegiate athlete’s sponsors would be allowed to engage in directed social media that congratulates athletes on their academic and athletic achievements.