The NC State Board of Education discusses what guardrails are needed for an NIL policy for high school athletes. The public will have their say this fall. (Photo: Getty Images)
As early as next year, North Carolina’s public high school athletes could get paid for sponsorship deals. The state Board of Education advanced proposed rules Thursday to allow students to profit from their name, image, and likeness.
NIL deals have been common in college athletics for some time and increasingly, more states have allowed high school athletes to get in on the action.
The State Board of Education initially prohibited NIL arrangements. But the N.C. High School Athletic Association told the board in July that more than 30 states have NIL policies in place, and some students were probably already accepting money on the side without any guardrails.
The board voted to allow the proposed rules to move forward with a two-month public comment period commencing October 1. Following a review of those comments, the full board will consider permanent NIL rules for public high school students at its first meeting in 2025.
The proposed rules that advanced on Thursday would allow use of a student’s name, image, or likeness for commercial purposes in exchange for compensation to the student or an immediate family member.
Permitted activities include:
Public appearances or commercials
Autograph signings
Athletic camps and clinics
Sale of non-fungible tokens (“NFTs”)
Product or service endorsements
Promotional activities, including in-person events and social media advertisements
Student athletes would be prohibited from profiting from certain promotions involving adult establishments or entertainment services. Alcohol, tobacco, vaping, cannabis-related products and sports betting would be prohibited products for teen-athletes with NIL deals.
Athletic directors, coaches, and booster clubs would also be prevented from using an NIL deal as a recruitment tool.
Ryan Collins, Assistant General Counsel for the State Board of Education, said a very small percentage of students are going to be offered these kinds of deals and the state’s disclosure requirements basically puts local schools on alert.
“This is probably the most major decision or action that I have been part of since I’ve been on the state board,” said board member Dr. Olivia Oxendine. “It’s pretty monumental in terms of the ramifications and the consequences.”
Board member Kimberly Jones worried about how the arrangement might impact students active across social media.
“I’m aware that a number of students, whether they play sports or not, have built up social media personalities. Many of our kids are creating content at school, on the bus, et cetera, and those accounts are then monetized.”
“I think this would force an examination of that to the extent that the student is wanting to participate in athletics,” Collins answered.
The proposed rules would prevent a student athlete from appearing in their team uniform during an NIL promotion.
Board of Education Vice Chair Alan Duncan suggested that as the rules moved to the public comment phase, the state should include a provision specifying that NIL dollars should be deposited in a fund that would go to benefit of the student whose name, image and likenesses is being purchased.
Oxendine said South Carolina was exploring whether the money should be placed into a trust fund for the high school student.
“I don’t know that every digital NIL deal will be in millions of dollars range where a trust would be a sensible solution, but it certainly is an option,” Collins told the board.
The N.C. High School Athletic Association has recommended that the state adopt a financial education component to help students understand the deals to which they are agreeing. Because money is involved, parents should also be aware of possible tax implications. If a student is under 18, their parent or legal guardian would be party to the agreement.
Ian House is a student advisor to the state board of education who runs track-and-field. (Screengrab from video stream)
Ian House, a student advisor to the state board of education, runs track-and-field at Cary’s Green Hope High School.
House told the board that even without a lucrative contract, there’s plenty of pressure both on and off the field for high schoolers.
“For those few students who will benefit from NIL, they may make athletics first and being a student come second. So, they’re an athlete-student, but not a student-athlete,” House cautioned.
House agreed with the portion of the policy that would prevent students from showcasing a brand while on the field or in uniform.
“If someone is there not to build those values, but simply there to make money, that’s defeating the whole point of why athletics are there, why you have the team building.”
Top-ranked high school quarterback Faizon Brandon sued the State Board of Education last month over its current ban on endorsement deals. The Grimsley (Greensboro) High School QB has since committed to play for the University of Tennessee.
What’s next?
The public will have a chance to weigh in on the proposed NIL policy during a comment period that will run from Oct. 1 through Dec. 6th. The state board will hold a virtual public hearing on Nov. 8th, process the feedback it receives, and vote on the final policy at its January 2025 meeting.
Timeline for establishing a NIL permanent rule. Source: NCDPI
