College athletes star in bank marketing: Rule change does NOT mean new opportunities | Techy Kings


Banks are looking to capitalize on a growing universe of names, images and likenesses.

By Nic Mayne and Max Forer

Ohon July 1, 2021, the National Collegiate Athletic Association adopted major changes to its long-standing ban on student-athlete participation in marketing opportunities, ushering in a new era for college athletics. Beginning with California’s Fair Pay to Play Act in 2019, lawmakers in nearly every state introduced laws protecting the right of student-athletes to enter into agreements to use their name, image and likeness, or NIL, rights in exchange for compensation. In response to the state’s legislative efforts, the NCAA finally approved an interim NIL policy, opening new opportunities for student-athletes for the first time.

As attorneys advising educational institutions, donors, sports brands and other stakeholders on the impact of NIL modernization, we have had the opportunity to see the evolution of the NIL market firsthand as it has grown from a fledgling state legislative effort to a multi-million dollar sport. marketing giant. Throughout that experience, we have identified potential opportunities for clients in other industries, including clients served by our banking practice team. While bank marketing may not be the first thing that most often comes to mind when considering NIL, we realize that many of the banks we work with have successfully used sports marketing to reach potential customers and increase community recognition. In addition, many bank marketers, particularly those focused on wealth management practices, may have an existing athlete customer base. With those synergies in mind, here are two ways NIL impacts bank marketers, and some legal and compliance hurdles to be aware of.

NO modernization and new sports marketing opportunities

Bank marketers are no strangers to the professional and collegiate athletic markets. Many banks have numerous signage in local, regional or national arenas, on-site activations and perhaps even foundational sponsorships or naming rights deals with sports teams and venues (active deals include Bank of America Stadium, Chase Field, Citizens Bank Park, Comerica Park, KeyBank Center, M&T Bank Stadium and PNC Park). In addition, many banks have achieved marketing success with professional athlete ambassadors. Chase has partnered with Serena Williams and Steph Curry. In 2021, some estimate that as much as 58 percent of all sports and athlete sponsorship deals in North America will be from financial services companies, spending more than $770 million a year on sports marketing efforts. Clearly, bank marketers understand the value of the sports industry and have found ways to capitalize on the attention that sports can bring to their products and services.

With the advent of NIL, a whole new market of potential athlete ambassadors is available to bank marketers for the first time. Some banks have already gotten into the NIL fray—Bank of Hawaii, for example, entered into eight agreements with University of Hawaii student-athletes just months after the NCAA’s policy change. Although the NIL market is still in its infancy, the student-athlete market may also provide more micro-influence options for banks, opportunities to engage in regional activations that use full teams or larger groups of student-athletes and opportunities to develop ambassador relationships with young people . stars before their professional careers—all may end up with a more cost-effective price tag than a sports marketing campaign with an established professional.

NONE for compensation and new customer opportunities

In addition, the evolution of the NIL provides new client opportunities for banks and wealth managers, as many student athletes begin receiving compensation, sometimes large, for the first time. According to early estimates, spending in the first year of the NIL era was close to $1 billion and may well exceed that figure in the years to come. With student-athletes previously limited to scholarship income alone, some NIL stars can earn big money for the first time, and then face tax, investment and financial planning issues for the first time as well. Student-athletes need important guidance on how NIL money affects their financial future. And these potential customers who previously may not have a bank account, now have the potential to benefit from a wide variety of bank products and services.

This creates an opportunity for banks to market to a broad base of new, young, potentially lifelong customers, both through traditional and possibly new marketing channels. Investing in ambassador partnerships with major college athletes can create opportunities with other student-athletes and the student body as a whole. Who doesn’t want to bank where the quarterback banks? NIL marketing can lead to NIL customers.

In addition, various other businesses and organizations emerged as a result of the NIL rule changes. Agents and other professional service providers are entering the market or expanding their service offerings to include options for college athletes. New software, data analytics, consulting and compliance companies are being formed to support student-athletes, institutions, agents and other stakeholders.

And donors are finding new ways to engage with student-athletes, including through the formation of donor “collectives,” a term based on booster groups formed to pool money to support the creation of NIL opportunities for student-athletes at specific institutions. But that now refers to a wide variety of organizational forms, including NIL marketing agencies, 501(c)(3) nonprofits and booster clubs with a NIL focus. In addition to these new stakeholders also being potential bank customers, many donor groups and institutional consultants are also focused on providing educational support for student-athletes and may wish to partner with banks in building unique on-campus programs for student-athletes.

Legal and compliance hurdles in the new NIL landscape

After lobbying for federal legislation and considering a comprehensive policy update to address the NIL changes, the NCAA ultimately decided to take a relatively passive approach (at least for now) when it adopted its interim NIL policy. Under the interim policy, student-athletes may participate in NIL opportunities for compensation and retain professional service providers, subject to remaining NCAA bylaw restrictions.

The three key compliance prohibitions to keep in mind when structuring a NIL agreement are:

  • All NIL offers must have a quid pro quo. A student-athlete may not be compensated unless work is performed, and next NCAA coaching suggested that each NIL agreement must be based on an independent analysis of the value the athlete brings to the agreement.
  • A NIL offer may not induce a potential student-athlete to attend a particular institution.
  • International students may be barred from participating in the NIL offer under the terms of their F-1 student visa.

In addition, student-athletes must comply with the provisions of applicable state law (in states that have passed NIL laws) and school policies, both of which may include restrictions on offers that conflict with school sponsorships, imposing restrictions on when and where student-athletes may participate in NIL opportunities and require reporting of NIL offers to compliance staff, among other requirements. Based on these compliance considerations, while NILs present exciting new opportunities, it is important to structure the agreement with the advice of an attorney familiar with applicable NIL laws and policies.

The NIL market continues to grow and looks set to become an important part of any bank’s sports marketing strategy. Bank marketers who understand the NIL landscape and can help structure compliant agreements and find ways to reach these new potential customers will provide tremendous value to their organizations.

Nic Mayne and Max Forer are attorneys at Miller Nash LLP in Portland, Oregon, and co-lead the firm’s nationally recognized name, image and look team. They can be contacted at [email protected] and [email protected].


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