• Kyle Winquist

Putting the No in Portnoy; Why Athletes Should Be Wary of Barstool's NIL Opportunity



[1]

On June 21, 2021, the United States Supreme Court unanimously voted against the National Collegiate Athletic Association (NCAA) in a decision that will be remembered as one of the most transformational moments in college athletics. [2] Although the decision was related to caps on education-related benefits, the Supreme Court’s disfavor caused the NCAA to rethink its name, image, and likeness (NIL) policy. [3] When the new interim NCAA NIL policy took effect on July 1, athletes and businesses were quick to make the most of the newfound opportunity: Alabama quarterback Bryce Young partnered with Cash App, UConn basketball star Paige Bueckers with StockX and Gatorade, LSU’s Myles Brennan with Smoothie King, Reilyn Turner of UCLA Soccer with Nike, etc. [4] Despite the long overdue benefits associated with the new interim NIL policy, athletes must be cautious when searching for deals as enticing opportunities could raise legal issues and ultimately place NCAA eligibility in question.


The NCAA’s interim NIL policy only applies to schools in states that have not enacted NIL legislation. [5] Schools in states with an NIL law must follow the law of that state. [6] The NCAA policy prohibits compensation 1) for work not performed, 2) for athletic achievement, 3) as a promise of enrollment at a particular institution, and 4) from the institution for use of the athlete’s name, image, and likeness. [7]


Perhaps the most popular of student-athlete NIL deals have involved Dave Portnoy’s Barstool Athletics, a collegiate athlete program created by Barstool Sports (Barstool) with the hope of capitalizing on athletes’ name, image, and likeness. [8] Boasting over 100,000 signees, Portnoy prides himself on the number of athletes who have agreed to terms with the rapidly growing sports media company. [9]


Portnoy and Barstool, not shy to public scrutiny, have been the subject of recent speculation for potentially jeopardizing the eligibility of thousands of naive student-athletes. The issue with becoming a “Barstool Athlete” stems from Barstool’s gambling ties. While designated as a sports media company, Barstool has recently created its own sportsbook (Barstool Sportsbook) allowing the public to participate in online sports betting. [10] Furthermore, Penn National Gaming, a company which owns and operates numerous casinos and racetracks worldwide, has a 36% stake in Barstool Sports. [11] Even though the interim policy does not mention gambling, partnering with gambling companies could be prohibited under state NIL law. [12] Thus, the NCAA’s “hands off” approach does not mean free reign for college athletes. Rather the NCAA merely delegated regulation responsibility to state legislatures and university compliance offices. [13]


A state can pass NIL legislation applying to schools domiciled in that state. As of September 21, 2021, 29 states have enacted their own NIL laws, with 22 currently in effect and seven set to go into effect between 2022 and 2025. [14] In many of these state laws, college athletes are prohibited from making deals with companies in certain industries. [15]


For example, Ohio’s NIL law prohibits athletes from partnering with “alcohol, marijuana, tobacco, or gambling companies [emphasis added] or with a brand in conflict with the university’s contracts”. [16] As it relates to Barstool, this is one way Portnoy, Barstool, and the athletes could get into trouble. If Barstool is determined to be a gambling company, the numerous Ohio State University athletes who are Barstool Athletes would be in violation of Ohio law. [17] As seen in Ohio, “A brand in conflict with the university’s contracts” means restrictions could also fall into the hands of university compliance offices.


Iowa has not passed its own NIL laws, leaving regulation up to the NCAA policy at a minimum, and individual Iowa colleges may add further restrictions. [18] The University of Iowa compliance office has only a mandatory disclosure agreement; no explicit restrictions for athletes have been outlined outside of notifying the school of an agreement. [19] Therefore, at the University of Iowa under University of Iowa rules, Hawkeye athletes are not prohibited from partnering with gambling related companies such as Barstool Sports. However, the NCAA’s Sports Wagering Policy prohibit “participation in sports wagering activities.” [20] The issue becomes whether being an ambassador for Barstool counts as a sports-wagering activity. [21] Even though the University of Iowa does not restrict their athletes from partnering with Barstool, the NCAA could deem Barstool as “associating with or endorsing sports wagering/gambling” therefore violating NCAA rules.


Despite its involvement with gambling, Barstool is still labeled as a sports media company. However, the ever-growing presence of Barstool Sportsbook and Penn National Gaming have begun to raise some eyebrows. Even though the Sportsbook and Penn National’s other business ventures do not relate to the collegiate athlete program, athletes could be indirectly endorsing them through being labeled a Barstool Athlete. [22] According to NCAA policy, associating with or endorsing sports wagering/gambling will result in immediate ineligibility from competition. [23]


In an effort to preserve athletes’ eligibility, Barstool filed intent-to-use trademark applications to register Barstool Athletics specifically for managing athletes. [24] This trademark would clearly distinguish Barstool Athletics from Barstool Sportsbook/Penn National Gaming. [25] However, given the NCAA’s strong stance against sports wagering/gambling, it might not be enough.


College athletes partnering with Barstool raises issues beyond gambling. Despite granting more rights to athletes in its interim NIL policy, the NCAA retained its position against pay-for-play and improper inducements. [26] Athletes can lose eligibility not only for partnering with a company associated with or endorsing gambling, but also for agreeing to terms in which they are compensated for simply being a part of Barstool. [27] An athlete must provide a fair market value service in exchange for compensation to comply with the new interim NIL policy. [28] Barstool stated its only requirement for athletes to receive free Barstool merchandise is to put “Barstool Athlete” in their social media biography. [29] The value of a specific social media bio may or may not be equal to the value of receiving free merchandise. This could create eligibility concerns for Barstool Athletes.


Does the risk of partnering with a company who could wipe out collegiate eligibility outweigh the benefits of some free merchandise and a few new social media followers? For the sake of preserving the rare and highly-sought-after opportunity of playing collegiate athletics, taking extreme caution when managing NIL opportunities is vital. Dan Lust, a sports attorney and professor at New York Law School suggests that if there is complexity and uncertainty to an issue (like the Barstool Athlete program), “perhaps it is best for the athlete to pass on it. There will be more offers to come”. [30]




References:


[1]: Sasnett, R. Retrieved from https://tucson.com/barstool-sports-is-new-title-sponsor-of-arizona-bowl/article_5f3d7044-eb1c-11eb-92b0-5fde02ad7310.html


[2]: Liptak, A. and Blinder, A. Retrieved from https://www.nytimes.com/2021/06/21/us/supreme-court-ncaa-student-athletes.html

[3]: Id.


[4]: Kenyon, D. Retrieved from https://bleacherreport.com/articles/2946352-the-biggest-and-most-notable-nil-deals-in-college-football-so-far

[5]: Andrews, K. Retrieved from https://www.bakertilly.com/insights/navigating-the-ncaas-interim-nil-policy-and-state-regulations


[6]: Id.


[7] Id.

[8]: Menapace, B. Retrieved from https://magazine.promomarketing.com/article/barstool-is-trading-branded-merchandise-for-nil-rights-is-it-worth-it-for-athletes/


[9]: Vann, L. Retrieved from https://www.thegazette.com/iowa-hawkeyes/one-week-into-nil-lawyers-caution-athletes-on-barstool-yoke-gaming-and-misinformation-that-could-a/


[10]: Barrabi, T. Retrieved from https://www.foxbusiness.com/sports/barstool-sportsbook-betting-app-launch-date-september


[11]: Vann, Supra.


[12]: Id.


[13]: Id.


[14]: Di Blasio, T. Retrieved from https://www.multistate.us/insider/2021/9/21/most-states-pass-name-image-and-likeness-laws-for-student-athletes


[15]: Id.


[16]


[17]: Vann, Supra.


[18]: Id.


[19]: Id.


[20]: Id.


[21]: National Collegiate Athletic Association. Retrieved from https://www.ncaa.org/enforcement/sports-wagering

[22]: Vann, Supra.


[23]: Campbell, R. Retrieved from https://talkingpointssports.com/college-football/college-sports/louisville-tells-student-athletes-to-cease-nil-involvement-with-barstool-sports/


[24]: National Collegiate Athletic Association, Supra.


[25]: Campbell, Supra.


[26]: Id.


[27]: National Collegiate Athletic Association. Retrieved from https://ncaaorg.s3.amazonaws.com/ncaa/NIL/NIL_PolicyKeyTakeaways.pdf


[28]: Id.


[29]: Id.


[30]: Vann, Supra.