Business Involvement
Are businesses permitted to compensate PROSPECTIVE student-athletes for their NIL?
Businesses are not precluded from entering into NIL deals with prospect-aged individuals. However, any NIL deal between a business and prospect-aged individual cannot be provided as a recruiting inducement to attend Stanford.
Are businesses permitted to compensate CURRENT Stanford student-athletes for their NIL?
Yes, businesses are permitted to enter into NIL agreements with student-athletes provided that the agreements meet all other NIL requirements (e.g., compensation provided in exchange for services provided, payments not tied to athletic performance, and agreement not an inducement to attend or remain at Stanford). Businesses cannot merely pay student-athletes without an exchange of services. Mere payment would constitute an “extra benefit”.
What is an “extra benefit"?
An “extra benefit” is any special arrangement by a booster to provide a student-athlete or the student-athlete family member or friend a benefit not authorized by NCAA regulations. Receipt of a benefit by student-athletes or their family members or friends is not a violation if it is demonstrated that the same benefit is generally available to Stanford students or their family members or to a particular segment of the student body (e.g., international students).
Can an NIL deal include a commingled employment opportunity?
No. An NIL deal should not include a commingled NIL agreement and an employment opportunity. By commingling these opportunities, it may unintentionally jeopardize a student-athlete’s athletic eligibility. Stanford recommends that if a business is interested in engaging in a NIL activity and an employment arrangement with a student-athlete, that they bifurcate the two opportunities to have a separate: (1) NIL agreement, and (2) employment contract/appointment.
- Do: A financial institution wants to enter a NIL deal with a student-athlete, but also potentially offer a summer internship opportunity.
The financial institution executes a NIL agreement with the student-athlete for an autograph signing at an upcoming staff retreat. The terms and compensation (rate, format, etc.) for the autograph signing are clearly outlined in the NIL agreement.
Separately, the financial institution should adhere to the business’ standard practices of interviewing and/or offering summer internships (e.g., interested parties apply, go through a formal interviewing process, etc.). In extending a summer internship offer to the student-athlete, Stanford recommends the financial institution provide a written contract, appointment, or letter outlining the student-athlete’s internship responsibilities and duties, as well as the rate of pay cited for the internship (i.e., for employment services as opposed to performing non-NIL-related activities).
- Don’t: A financial institution presents a NIL deal to a student-athlete whereby the student-athlete agrees to both: (1) engage in an autograph signing for staff at an upcoming team retreat, and (2) will provide the student-athlete with a summer internship. Though the agreement has two sections, each outlining the respective opportunity, the agreement itself is binding to both opportunities.
This agreement commingles the two opportunities, and therefore is impermissible.
May a business provide non-cash compensation to a student-athlete in exchange for engaging in a NIL activity?
Yes. Student-athletes can be compensated in non-cash forms (e.g., business discount, free or reduced meals/lodging, free or reduced apparel or equipment, etc.). However, it is important that the non-cash compensation is provided in exchange for work performed by the student-athlete, the non-cash compensation is a fair market value relative to the services rendered by the student-athlete, and the NIL activity is not tied to a student-athlete’s athletic performance or achievement.
May a business provide a student-athlete with a product or service, in the hopes that the student-athlete will subsequently promote the business?
No. A business may not provide its product or service to a student-athlete in the hopes that the student-athlete will subsequently promote the business, such an arrangement would constitute an impermissible extra benefit. The student-athlete must enter into a NIL agreement prior to receiving monetary or non-monetary compensation from a business.
Caveat: If a student-athlete wishes to test a business’ product or service prior to agreeing to promote it, the business may provide the student-athlete with access to the product or service in a very limited manner (ex., a one hour demo). Thereafter, the business must revoke access to the service or reclaim the product if the student-athlete indicates they do not wish to enter into a NIL promotional deal. Please refer to the Navigating Permissible Deals section for additional clarity and practical examples.
Can businesses provide professional services to a student-athlete, such as providing marketing materials, tax advice, etc., for purposes of NIL?
Maybe. Please refer to the Professional Representation & Agents section for more clarity and practical examples. If businesses are interested in providing specialized education that could assist our student-athlete population with general NIL principles (ex., brand strategy, contract negotiations, deal sourcing, etc.), please contact Stanford Athletics at athleticsnil@stanford.edu.
Can businesses enter an agreement with a student-athlete that involves ongoing forms of compensation, such as equity or a discount code?
Yes. So long as the student-athlete performs work in exchange for value they are receiving and the terms of the agreement are outlined, they may be compensated in the future. It is recommended student-athletes continually update their NIL disclosure forms with the amount earned on a regular basis.
- Do: A t-shirt company sends a deal to a student-athlete that includes an agreement for the athlete to receive a t-shirt per month. The athlete is required to post a 30% discount code in one story per month with the t-shirt for 6 months. Prior to entering into the agreement, the athlete discloses it into the INFLCR app. The company then pays the athlete after 6 months of sales income from the discount code in one lump sum. The athlete uses the INFLCR app to update the original disclosure to include the final value received.
May a NIL agreement include an arrangement whereby a student-athlete is provided a special purchase code to promote and, in exchange, the student-athlete receives compensation based on a percentage of sales or the number of sales?
Yes. It is permissible for a NIL agreement to include an arrangement whereby the student-athlete’s compensation is a percentage of sales, number of sales, commission-based, etc.. However, it is critical that the compensation is tied to NIL activity performed (i.e., quid pro quo), and the compensation structure is articulated clearly in the NIL agreement. Moreover, for deals where the compensation structure could vary over the duration of the agreement, student-athletes are required to periodically report their ongoing compensation with Stanford Athletics. For example, a student-athlete signs a NIL deal with a third party, logging their initial NIL agreement via the INFLCR Verified App; thereafter, on a monthly basis, the student-athlete logs another deal with the same third party via the INFCLR Verified App, but this time noting the compensation they earned in the prior month).
Stanford Athletic Staff Involvement
Will the Stanford Athletics Compliance Office review student-athlete NIL agreements in advance of signing?
Yes. However, Stanford Athletics Compliance will provide feedback as to whether the agreement complies with California law, NCAA rules and regulations, and Stanford policies only. Stanford will not provide feedback as to any other terms of the agreement. Moreover, Stanford is only permitted to provide feedback directly to the student-athlete and/or their parent(s) (i.e., not other parties including agents, businesses, boosters, etc.). Stanford Athletics recommends that all third parties seeking to enter into a deal with a student-athlete draft the NIL agreement language and send it to the student-athlete and the Athletics Compliance Office for review. The Stanford Athletics Office will then work with the student-athlete on any questions or issues identified.
If a business is interested in discussing and/or entering into an NIL agreement with a student-athlete, can a Stanford coach or staff member assist?
No. Stanford policy prohibits coaches and staff from facilitating or arranging any NIL deals. As such, coaches and staff are not permitted to engage in NIL discussions with a business, booster, or third party. complies with California law, NCAA rules and regulations, and Stanford policies only. Stanford will not provide feedback as to any other terms of the agreement. Moreover, Stanford is only permitted to provide feedback directly to the student-athlete and/or their parent(s) (i.e., not other parties including agents, businesses, boosters, etc.).
Can a Stanford coach or staff member provide businesses with a student-athlete’s contact information for NIL purposes?
No. Stanford policy prohibits coaches and staff from facilitating or arranging any NIL deals. As such, coaches and staff are not permitted to provide student-athlete contact information for purposes of NIL opportunities.
Are coaches and staff permitted to pass along written inbound NIL inquiries they receive from a third party or booster to student-athletes?
Yes. Coaches and staff may forward along a written inbound NIL inquiry to student-athletes. This is the case whether the inbound inquiry is specifying a desire to work with a specific student-athlete, a subset of student-athletes, or all student-athletes. Coaches and staff are not permitted to engage in verbal conversations with outside parties to collect NIL inbound inquiry information. However, in forwarding the inquiry to student-athletes, coaches and staff must include the templated email created by Stanford Athletics. This email language notes that in forwarding along the inquiry, Stanford Athletics is not signifying an endorsement of the third party or booster. Further, the language notes that Stanford neither encourages or discourages student-athletes from engaging in any NIL activities.
Exception: if a student-athlete has previously indicated to the coach and staff that they do not wish to be forwarded written inbound NIL inquiries, the coach and staff members will not engage in such practices.
- Do: A Stanford dietician receives an email from a vendor that sells electrolytes stating they would like to work with a specific student-athlete to perform a NIL deal to promote their product. The dietician accesses the template language for forwarding written inbound NIL inquiries, adds the necessary language at the top of the email, and forwards it along to the respective student-athlete. All future communications between the vendor and the student-athlete do not include the Stanford dietician.
This would constitute a permissible passing along of information, as the Stanford dietician did not engage in any manner with the vendor. As such, this would not be considered facilitating or arranging a NIL deal on the part of the Stanford dietician.
- Don’t: A Stanford coach receives a call from a business noting they would like to work with a specific student-athlete to perform a NIL deal to promote their newest product. The coach says they’d be happy to help pass along the information. The coach takes notes on the details of the deal and the contact information for the business.
The coach then writes up the details discussed in an email, adding the required template language at the top, and sends it along to the student-athlete.
Due to the fact that there was discussion between the business and the coach about the possible deal, there is an automatic presumption that assessment, facilitation, or arrangement of the NIL deal occurred. Unfortunately, this scenario would violate institutional policy.
Student Obligations
May a student-athlete miss class to engage in NIL related activity?
Student-athletes must work with their professors to seek approval for any missed class time to engage in NIL activities. Stanford Athletics is not able to provide approval for student-athletes missing class.
May a student-athlete miss Stanford Official Team Activities to engage in NIL related activity?
No. Student-athletes may not miss any Official Team Activities, defined under the Stanford NIL Policy to include all Countable Athletically Related Activities (“CARA”) and Required Athletically Related Activities (“RARA”), for the purpose of NIL-related activities.
- Examples of CARA include, but are not limited to:
- Practice
- Competition
- Strength Training
- Film review
- Team meetings
- Examples of RARA include, but are not limited to:
- Athletics related meetings (compliance, academics, etc.)
- Recruiting-activities
- Press conferences
- Travel to and from away competitions
May a student-athlete engage in NIL activities during Stanford Official Team Activities?
No. Per Stanford policy, and in adherence with California law, student-athletes are not permitted to engage in NIL activities during Official Team Activities.
- Do: An electronics company thinks it would be great exposure to have a student-athlete wear their headphones during athletic activities. The company extends a NIL agreement to the student-athlete offering $200 for every non-Stanford affiliated post showing the student-athlete wearing the headphones.
So long as this arrangement is done outside of Official Team Activities, and adheres to Stanford Branding & Policies section, this would be permissible.
- Don’t: An electronics company thinks it would be great exposure to have a student-athlete wear their headphones during Stanford pre-game warms up. Toward that end, the company extends a NIL agreement to the student-athlete offering $200 for every Stanford pre-game warm up that the student-athlete wears the headphones.
This arrangement would constitute an impermissible arrangement of NIL activities during Official Team Activities.
Stanford Branding
Can student-athletes use the Stanford brand (e.g., block S, campus landmarks, Cardinal color, etc.) during NIL activities?
No. Please refer to the Stanford Branding & Policies section for more information and practical examples.
NIL Disclosure
Must NIL deals be documented in writing?
Stanford recommends all NIL deals be documented in writing; this approach allows the Stanford Athletics Compliance Office to fully vet the deal, ensuring there are no prohibited terms or conditions that may jeopardize a student-athlete’s athletic eligibility. However, there is not any state law or NCAA regulation prohibiting verbal NIL agreements. Whether written or verbal, all NIL deals must be disclosed to the Stanford Athletics Compliance Office.
Are businesses responsible for reporting NIL deals that include Stanford student-athletes to Stanford Athletics?
No. Businesses are not responsible for disclosing NIL deals. California law requires student-athletes to disclose details of any NIL agreements they enter into to their institutions. Stanford has established the Athletics Compliance Office as the appropriate reporting unit and has provided education to student-athletes on the proper reporting procedures.