Understanding what you can and cannot do while on a visa can be tricky. So today, we’re here to discuss what NIL is, and whether international students can receive NIL compensation.
What’s NIL?
“NIL” refers to the way college athletes can receive compensation using their name, image, and likeness. This allows college athletes to hire agents, secure endorsement deals, and overall earn an income through being an athlete. It also protects athletes from preventing others from exploiting their name, image and likeness without their consent and using it in a commercial manner. Using an athlete’s NIL involves a brand leveraging their name, image, and/or likeness through marketing and/or promotional endeavors which result in payment to the athlete. And realistically, a lot of the marketing and promotional endeavors are done through social media.
To take it a step back, the NCAA officially made it legal for athletes to profit off their NILs on July 1, 2021. Since this initial passing, states have begun to pass their own laws detailing the rules for athletes that attend colleges in their state. And consequently, universities have also begun to produce rules and programs for their student-athletes. Though, stick around because the NIL is not created equal for all student-athletes.
Now it is important to understand what NIL is not and does not mean. NCAA rules still prevent schools from paying players directly. This means that college coaches cannot offer money as an incentive for high school athletes to come to play at their school, nor can athletes receive compensation directly from their university based on their athletic achievements. For example, an athlete cannot be paid for scoring 2 touchdowns, 30 shots, 3 home runs, or 2 goals. Because the NCAA still intends to maintain its amateur sports status, paying athletes for their field play just isn’t possible at this time.
What Does NIL Compensation Look Like in College Sports?
This is compensation — usually money — earned by college athletes for the use of their fame or quasi celebrity status, either through their name, their image, or a likeness of who they are. Examples include being paid for autographs, appearing in an advertisement, or providing a social media shoutout for a company’s service or product. Depending on the product, a student-athlete may not be able to promote something like tobacco products, steroids, or sports betting depending on the state and school. And depending on the school, athletes may be required to notify their schools of NIL arrangements.
Why is it Important?
Professional athletes have been able to obtain lucrative compensation deals for years, from shoe companies to automakers, insurance companies, you name it. But college athletes have been barred from doing so under the argument that amateur athletics should remain free of influences – bad or otherwise – such as money. The NCAA has been repeatedly challenged in this area in court and has lost several key battles.
Who Does NIL Apply To?
At first glance, NIL regulations apply equally to all student-athletes at the collegiate-level. But when you look deeper, it has different implications for international student-athletes who are on visas that require federal compliance.
So what does that mean? Let’s dig deeper.
International Student-Athletes and NCAA NIL Rules
Student Visa Categories
There are different student visa categories with different rules allowing and disallowing work authorization.
F-1 Visa
Most international student-athletes are in F-1 status, sponsored by their college or university. That means the school is responsible for the student-athletes immigration compliance with the U.S. Department of Homeland Security (DHS), and has the discretion to cancel the student’s F-1 visa if the student-athlete does anything that violates the visa regulations. To take it a step further, the school’s Designated School Official (DSO) is required to terminate the student’s F-1 visa if they believe the student is working outside of the federally permitted parameters resulting in a status violation.
Schools enforce F-1 student visa employment rules, as the DHS requires.
The F-1 visa allows for work authorization and certain compensation abilities under certain circumstances.
The F-1 visa allows for passive income at any time. However, the NIL rules require consideration in order to obtain compensation. This means that student-athlete must actively work to receive monetary compensation. So in this case, this does not qualify for federally authorized passive income requirements for an F-1 visa.
The F-1 visa does allow for active income in certain circumstances. Specifically, F-1 students are allowed to work on campus with restrictions to the number of hours worked per week. They may also work off-campus, but only for optional practical training in their field or curricular practical training as part of their education. Meaning that they must work in a position that is within their field of study.
Examples of Unrestricted Work Authorization
There are several types of visa holders that have unrestricted work authorization. They include:
⦁ Lawful Permanent Residence Status / Green Card holder
⦁ Pending green card applicant with an approved work permit
⦁ DACA recipient with an approved work permit
⦁ TPS recipient with an approved work permit
Individuals in these statuses can work for multiple employers and it does not restrict the individual regarding the type of work they can do. So if we remember the example of the F-1 visa holder who can only work in their field of study, here, it does not matter what field you work in. Work authorization is only limited by the expiration date on their work permit, for which the work permit can generally be renewed.
Other examples of individuals who hold visas other than those previously mentioned include children or spouses of diplomats, professionals, or business executives, whereas children’s respective visas generally only allow for passive income, while some spousal visas can allow for active employment.
Some of the spousal visas that allow for work authorization include the H-4 and L-2 visas. And in this video, we will discuss the H-4 visa because it can be a little tricky.
H-4 Visa
Student-athletes in H-4 status are sponsored by their family member in H-1B status. That means that maintaining an H-4 visa is dependent on the H-1B visa holder remaining in compliance with their visa regulations. If the H-4 visa holder is a child of the H-1B visa holder, then the H-4 visa holder is not eligible to apply for work authorization. If the H-4 visa holder is the spouse of an H-1B visa holder that has an approved I-140, then the H-4 visa holder is eligible to apply for work authorization, which once approved, allows for unrestricted work authorization, and can therefore earn active income and NIL compensation.
In this instance, it is rare that an H-4 holder would be a student-athlete because of the following reasons:
⦁ In order to obtain H-1B status, the individual must have at least a U.S. bachelor’s degree or the equivalent of a U.S. bachelor’s degree. The equivalent of a U.S. bachelor’s degree can be a foreign degree that is equivalent per an education evaluation standard, have 12 years of experience working in the field, or have a mix of partial education and work experience.
⦁ If the prospective H-1B visa holder intends to work for a for-profit company, there is a lottery system for the first visa for which there is a 40-50% chance that the individual’s submission will be selected. Since this is a random selection, the individual could be selected the first time applying, or it could take several years to win the lottery since it is only offered once a year. If selected, the case will then go to an immigration officer for review.
⦁ If the individual works for a nonprofit or other qualifying organization, then the individual will not be required to go through a lottery system, and the employer can petition for the H-1B candidate immediately.
⦁ Once the individual holds H-1B status, the company can then sponsor the individual for an employment-based green card. Depending on the company policy of when they place their employees on the green card path and the current DOS and/or USCIS processing time to obtain an approved I-140, it can take several months to several years to obtain.
So realistically speaking, based on the age of consent to marry, the amount of time needed to qualify for and obtain an H-1B visa, and the amount of time needed to obtain an approved I-140, it is unlikely that there will be many student-athletes as H-4 spouses in comparison to those who hold F-1 status or another designated status.
Individuals Who Are Unable to Work
Individuals who are unable to work are undocumented student-athletes. They would need to change their current status to a qualifying status in order to obtain lawful status and work authorization.
Exclusivity Contracts
Another thing to be mindful of is that some campuses enter into exclusivity contracts with certain vendors. The campus policy should clarify whether NIL activities are subject to exclusivity contracts at that school.
For example, colleges and universities may have exclusivity contracts with major brands such as Adidas, Nike, Under Armour, Coca-Cola, Pepsi, or Starbucks that yield financial benefits for the institution. Student-athletes must consider their school’s exclusivity contracts when planning their NIL activities.
Bonus Information
As promised, here’s some bonus information about signing NIL contracts.
First and foremost, create a business entity such as an LLC to protect you and your assets. If you do not have many assets now, you will in the future. Creating a business entity will protect you if something bad occurs.
Equally as important is to get an attorney to review the NIL contract, your school’s requirements, the state requirements, and your federal visa requirements. This can be one attorney, but it will likely be more than one because you need specialized assistance. You need people in your corner that will have your best interests at heart, which will be the professionals that you employ and not the salesperson trying to get you to sign the deal. As students can be novices with business negotiations, a professional will help you navigate the process and get what you deserve so that you don’t sign a bad deal. The cost up front in obtaining a lawyer or multiple lawyers may seem expensive at the outset, but over time, it will not seem like much. This will allow you to ensure you remain compliant with federal and state regulations, your school’s requirements, and you can have better terms in your agreement. Many attorneys will limit the amount of time a deal can be enforced because what seems great in your agreement as a freshman, won’t seem so great when you grow as an athlete by your senior year. So having the ability to update your contract each season can be very beneficial. And circling back to the first tip, when you sign the contract as a business entity and not individually, you will protect yourself even further.
Additionally, if you obtained an income-based scholarship to pay for part or all of your education, such as a Pell Grant, receiving NIL compensation will change your income and can potentially make you ineligible for the grant depending on the size of your NIL compensation.
Finally, if you are outside of the U.S., depending on the visa status you hold in the U.S. and it’s work authorization requirements, you may find yourself in a gray area. Some student-athletes have brokered deals while they were in their home country to get around their inability to work in the U.S. However, it is important to be careful with this because your ability to do this will depend on the type of employer, your physically location, and the type of visa you are on.
I hope you found this video helpful. Subscribe if this content or information helps you in any way, comment below if you want me to talk about something in specific, and share this resource because you never know who needs answers to these questions. Additionally, if you have any specific questions about this video as they pertain to your unique circumstances, please schedule a consultation, and I’ll see you in the next video.
