Regulating Athlete Rights: A Comparative Analysis of Prohibited NIL Sponsorship Categories in State Statutes and Institutional Policies

Abstract

The emergence of name, image, and likeness (NIL) rights in college athletics created a complex legal environment where state statutes and institutional policies simultaneously govern athlete commercial activity. Although state laws served as the catalyst for NIL reform, a decentralized approach to NIL governance has allowed institutions to exert substantial authority in regulating college athlete sponsorship opportunities. This multilayered regulatory framework introduces significant legal and economic implications. The purpose of this study was to examine prohibited sponsorship categories found in state NIL statutes and institutional NIL policies, and to assess whether institutional restrictions exceed those mandated by state law. A qualitative content analysis of 32 active state NIL laws and 61 Power-4 institutional NIL policies revealed that only a minority of states prohibit NIL deals in certain product or service categories while most institutions adopt broader restrictions, including prohibitions on NIL sponsorship categories not mandated by state law. Overall, 64% of institutions imposed additional sponsorship category prohibitions beyond those required by state statutes. This suggests institutional policymakers, not state legislators, are the primary regulators of college athlete access to otherwise lawful commercial markets. These findings highlight the decentralized nature of NIL governance and bring about salient concerns related to commercial speech rights, equity and fairness standards, and institutional authority in the NIL era. This study concludes by offering policy recommendations aimed at promoting a more uniform and legally justifiable NIL regulatory landscape that prioritizes college athlete economic rights in a dynamic NIL industry.