Michigan House Bill 5217, which was passed into law in 2020, took effect on December 31, 2022. The new law set standards for how student-athletes can earn compensation for the use of their name, image, and likeness (“NIL”) in Michigan. The NCAA also has its own NIL policy, which took effect on July 1, 2021.
It’s important that Michigan student-athletes, covered higher education institutions, and businesses ensure that NIL deals comply not only with NCAA rules and regulations, but also with the new standards that will apply in the State of Michigan.
For example, higher education institutions are prohibited from paying a student-athlete compensation directly for the use of their NIL rights, or revoking or reducing a student-athlete’s athletic scholarship because they earned compensation from an NIL deal.
The law also places certain limitations and obligations upon student-athletes, including:
- Prior to entering into any endorsement agreement, the student-athlete must disclose the proposed opportunity to a university-designated official at least seven days prior to committing to the opportunity or contract.
- Student-athlete endorsers are prohibited from entering into an apparel contract if that contract or promotional relationship conflicts with any provision of their school’s existing apparel contract.
- Restrictions on the use of the name, trademarks, service marks, logos, symbols, or other intellectual property of their university in conjunction with the student-athletes use of their name, image or likeness.
This is an evolving area of the law in Michigan and throughout the country. There is some speculation that a new federal law will be passed standardizing how NIL works throughout the country. Currently, however, the restrictions and obligations on parties participating in NIL deals must be discerned from a patchwork of NCAA rules and regulations, state laws, and university policies. For questions or assistance, please contact Ryan Kauffman.
This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.
Ryan K. Kauffman is a Shareholder at Fraser Trebilcock with more than a decade of experience handling complex litigation matters. You can contact him at email@example.com or 517.377.0881.
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