International Student-Athletes and Their Eligibility for NIL Partnerships

08/19/2024|3 minute read

Key Takeaways:

• International student-athletes and their athletic departments remain uncertain about athlete eligibility for name, image and likeness (NIL) deals due to immigration law restrictions on athletes' ability to "work" while on an F-1 visa.
• Recent decisions by the National Labor Relations Board's (NLRB or Board) regional director for Region 1 and the Third U.S. Circuit Court of Appeals concerning employment status for collegiate student-athletes could affect whether international student-athletes will be able to "work" through NIL deals.
• The NCAA's landmark settlement of its antitrust litigation brought by former student-athletes signals a future of revenue sharing between schools and athletes in which international student-athletes may not be able to participate under the current visa rules.
• The NCAA's new proposal permitting schools to facilitate NIL deals for their student-athletes, effective August 1, calls for guidance on how international student-athletes and their athletic programs should navigate NIL business inquiries.

NIL partnerships between businesses and collegiate student-athletes remain a lucrative opportunity. In fact, marketing and advertising through student-athletes has been so successful that the NIL industry is projected to soon be worth over $1 billion.[1] Student-athletes and businesses across the country are benefiting from the NCAA's expanded NIL policy; however, international student-athletes continue to miss out on the action.

The NCAA's current NIL framework permits student-athletes to monetize their NIL, but the policy conflicts with the rules that govern U.S. student visas. Almost all international student-athletes enrolled at U.S. colleges and universities are on an F-1 visa, which limits a student-athlete's ability to work while in school.

The question of whether money made by student-athletes through NIL deals constitutes "work" for purposes of visa restrictions remains open, and new developments in the world of NIL and college athletics have continued to muddy the waters.

In a decision from February concerning the Dartmouth men's basketball team's demand for union representation through Service Employees International Union Local 560, the NLRB's regional director for Region 1 found that, in effect, student-athletes are employees who perform work through their school-sponsored athletic activity. The decision is still subject to review by the Board, but it may suggest that international student-athletes should be able to profit from their NIL (in connection with their athletic pursuits) without putting their visa status in jeopardy. The decision also shows a potential inconsistency in the way federal agencies define student-athlete "work."

More recently, in July, the Third Circuit in Johnson v. NCAA was presented with the question of whether collegiate student-athletes could be considered employees under the Fair Labor Standards Act (FLSA). The court ultimately found that it was at least plausible for student-athletes to be employees of their schools after applying a new four-part test. Notably, there was no determination that student-athletes are employees under the FLSA, as the court only found that the class action brought by former student-athletes could survive the NCAA's motion to dismiss. Nonetheless, the court's reasoning at least acknowledged the possibility that student-athletes could be performing compensable work in their roles on school-sponsored teams.

These insights from the NLRB and Third Circuit become especially relevant in light of the NCAA and Power Five conferences' recent settlement of the consolidated antitrust litigation of three class action lawsuits filed by former student-athletes who claimed that the NCAA's pre-NIL ban on student-athlete compensation violated antitrust regulations. In May, the NCAA reportedly settled the lawsuit for around $2.8 billion, and its decision to do so has opened the door for future revenue sharing between schools and their student-athletes.

Revenue sharing in college sports now seems inevitable given the NCAA's recent relaxation of its rules governing athlete compensation. Effective August 1, the NCAA's latest NIL rules will allow schools to play an active role in identifying and facilitating NIL deals with third parties for their student-athletes.

The business landscape for college athletics is rapidly changing, and the progress this year alone indicates that there is no end in sight. Many student-athletes will benefit from the shift toward allowing them to capitalize on NIL opportunities; however, international student-athletes remain uncertain about their ability to participate. As schools become increasingly involved in sourcing NIL partnerships for their athletes, it may be beneficial for the department of immigration services to adopt a carve-out of the visa rules to allow international student-athletes to profit from their NIL without jeopardizing their F-1 visa status.

BakerHostetler's interdisciplinary approach to NIL matters provides administrators, athletes, advertisers and collectives with the opportunity to fully understand their deals while also providing the necessary legal protections. To stay up to date on matters related to NIL and the sports industry in general, please contact Industry Marketing Lead Cynthia Keveney at [email protected].

[1]"Led by Collectives, Year 3 of NIL To Reach $1.17B Market" (June 28, 2023), available at https://frontofficesports.com/led-by-collectives-year-3-of-nil-to-reach-1-17b-market/; "How NIL Diversity Is Driving The Market Up To $1.1 Billion" (March 10, 2023), available at https://www.forbes.com/sites/korihale/2023/03/10/how-nil-diversity-is-driving-the-market-up-to-11-billion/?sh=25f6925260b2.

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