What to Know Now That North Carolina Public School Student-Athletes Can Profit From Their Name, Image, and Likeness

By Todd Bowyer 

Following a recent court order enjoining the enforcement of the State Board of Education’s (SBE) temporary rule that had banned compensation for name, image, and likeness (NIL), student-athletes at public schools in North Carolina can now profit from their NIL.

The back and forth over NIL for high school student-athletes has been going on for some time now. In response to S.L. 2023-133, the SBE adopted a temporary rule forbidding NIL, which essentially maintained the status quo, until consideration could be given to a proposed permanent rule that would allow NIL.

Not long after the temporary rule took effect on July 1, 2024, a mother filed a lawsuit on behalf of her son, a highly touted high school football player who had received a lucrative NIL opportunity. The Wake County Superior Court judge presiding over the case concluded that the SBE’s temporary rule contradicted the General Assembly’s intent that public school student-athletes should be able to make “use” of their NIL. Thus, the Court enjoined the temporary rule and ordered the proposed rule permitting NIL to take effect immediately.

The Scope of NIL

The proposed rule defines NIL as “the use of a student’s name, image, or likeness for commercial purposes and in exchange for compensation to the student or an immediate family member of the student.” Compensation is anything of value, including cash, gifts, discounts, and other tangible benefits given to the student or an immediate family member.

Compensable NIL activities may include public appearances and commercials; autograph signings; athletic camps and clinics; product or service endorsements; and other promotional activities in person or on social media.

There are certain restrictions, however. NIL activities cannot reference the student’s school or have the student appear in uniform or promote goods during competition. NIL activities also cannot involve the promotion of certain goods and services, including adult entertainment; alcohol, tobacco, and other drugs; firearms and other weapons; gambling; and activities that would disrupt the operations of a school or public school unit (PSU).

NIL agreements cannot condition compensation on performance. In addition, if the student is a minor, a parent or legal guardian must be a party to the agreement. NIL agreements must also hold harmless the governing body of the PSU, the administering organization like the North Carolina High School Athletic Association (NCHSAA), the Department of Public Instruction (DPI), and the SBE, and their officers and employees.

Obligations—and Uncertainties—Under the Proposed Rule

Before signing an NIL agreement, the student (and a parent) must complete a course on NIL offered by the National Federation of State High School Associations (NFHS) and submit the completion certificate(s) to the NCHSAA. The student should provide the school with a copy of the NIL agreement prior to its execution,[1] and later, the signed NIL agreement. The school’s athletic director must then submit the NIL agreement to the NCHSAA within 30 days of the student’s disclosure of the agreement.[2]

The rule does not expressly require a school to verify that an NIL agreement conforms to the rule or monitor a student’s NIL activities for compliance during the term of the agreement. However, because a school has an interest in its students’ eligibility, the school may want to advise the student if anything in the agreement looks amiss and ensure the student understands the ongoing obligation to follow the rule. Otherwise, if the student is later found ineligible for violating the rule, the school’s team may have to forfeit any competitions in which the student participated.

It should be noted that there are inconsistencies between the SBE rule and what the NCHSAA requires. Under the rule, the student is responsible for submitting the NFHS NIL course completion certificate(s) to the NCHSAA, and the school’s athletic director is responsible for submitting the executed NIL agreement. However, the NCHSAA appears to impose additional obligations, requiring the student (and parent) to attach the proposed NIL agreement and the NFHS NIL course completion certificate(s) to a completed NIL Certification of Compliance verification form then submit the packet to the NCHSAA. The NIL Compliance form also requires the signature of the principal or designee, although it is unclear if the principal’s signature serves to verify the NIL agreement complies with the rule or only acknowledges that the student and parents have attested to their compliance.

Additional Considerations

School districts should consider training their personnel on the new rule—including that NIL may not be used as a recruiting tool—and informing student-athletes and parents that failing to comply with the rule may jeopardize the student-athlete’s eligibility. Attorneys should also contemplate if NIL agreements, NFHS certificates of completion, and NCHSAA Compliance forms are student education records and advise their clients accordingly on the maintenance and retention requirements for these documents.

Finally, attorneys should continue to monitor the rulemaking process related to NIL because the final rule may differ from the proposed rule currently in effect. In fact, the SBE recently proposed a new temporary rule that adds clarifying language to define “immediate family member” and include that a student-athlete will be ineligible if the student-athlete fails to comply with the rule on NIL. Both the proposed rule and the new temporary rule are going through the rulemaking process and will be accepting public comment into December. Education law attorneys and school officials with responsibilities in NIL are encouraged to review the proposed and temporary rules and seek further clarification from the SBE through public comment.