For the past five years, student athletes have been able to make money from their name, image, and likeness, known as NIL. Since then, rules from the resulting created entity known as the College Sports Commission, have been put into place, but there are still many controversies, which is why Congress is getting involved again. What does all this mean for the student athletes in our state? Mike Switzer interviews Clay Grayson, an attorney in Mount Pleasant, SC.
TRANSCRIPT:
Switzer: Hello and welcome to another edition of the South Carolina Business Review. This is Mike Switzer. For the past five years, student athletes have been able to make money from their name, image and likeness known as nil. Since then, rules from the resulting created entity known as the College Sports Commission have been put into place. But there are still many controversies, which is why Congress is getting involved again. What does all this mean for the student athletes in our state? Clay Grayson is an attorney in Mount Pleasant SC who's going to help us with this topic, and we have him on the phone. Clay, welcome to the show.
Grayson: Thank you, Mike. Glad to be here.
Switzer: What is the latest news here? Where are we in Congress with, dealing with this?
Grayson: So Congress has attempted to put rules in place to create some stability in athletics through what the current legislation is called the Protect College Sports act, and it purports to limit transfers between schools of student athletes. It attempts to put some rules in place and ultimately possibly creating an antitrust exemption to the NCAA so they can begin to reassert itself in terms of being a rulemaking body. But sadly, they went into recess on August 10 and the bill has yet to be passed. And it remains to be seen if it will be passed this fall. I'm somewhat skeptical.
Switzer: Okay, so in other words, the wild west of student athletics is going to continue.
Grayson: It is for the time being. There's no end in sight. If Congress can't fix it, then we may be left to, collective bargaining or potentially student athletes unionizing as another way to approach the problem.
Switzer: All right, and so what are your recommendations for student athletes and their parents?
Grayson: I guess here in our state, I would recommend that they get really knowledgeable about nil, what it means, what it means to their family. I would tell them to think a lot about if they are receiving nil payments, to think about the tax effects, to think about it as a business. It's completely okay for a student athlete to create a LLC or a limited liability company to run this business. And actually I think that's a pretty good learning experience for college students. The last thing I would warn them is about agents. In today's day and age, a college athlete really does need an agent, but they're not all the same. And some of them can charge extreme fees. Some of them, ah, are really aren't worth it. And so I would definitely tell students and their parents, if they are in this space, have they got the potential to be on a college sports team with an NIL payment or rev share payment, then take much attention in who you select as an agent.
Switzer: Okay. And so how about the individual universities, like the University of South Carolina or Clemson? Do they provide any guidance here?
Grayson: Both of our state schools with significant athletic programs, USC and Clemson, are leaning forward in this space, and I view them kind of leaders nationally. The challenge has been the NCAA has had these rules in place to prevent pay to play, which is a good thing. You don't want the richest school to always win. You want that Cinderella story to come into the mix. I do think both USC and Clemson are part of the camp that want rules, they want enforcement, they want that stability. So it remains to be seen if it will be here in 2027.
Switzer: Well, and so universities, you know, they offer career guidance to, every other student, right? Or I guess even these students, they offer career guidance. And so why wouldn't they also offer, you know, how to pick an agent, how to, set up your LLC for your NIL money?
Grayson: So I think that's beginning to happen now, and I believe it's a great part of an education, you know, component to this. But when this emerged originally, a lot of the regulatory bodies, be it NCAA or even csc, they were worried that even crossing the line into that kind of advice might be a form of payment, and they were trying to build a lot of firewalls. But that's one of those problems. I don't think students were able to get that kind of support. That's changing. I don't think that's really the case today, but it has been in the early years of nil, and we've also
Switzer: been hearing talk of student athletes becoming employees of the university so they can get health insurance benefits. And even unionization, as you mentioned, might be a possibility. Where are we there?
Grayson: That's a very controversial topic, and you're going to get a wide range of answers, depending on who you speak to. I think we're very far away from that currently. But as I noted before, if Congress can't come in and deal with some of these issues, deal with these antitrust exposures that naturally arise when you try to create rules in this area, that's a problem, and I don't know how that's going to be easily solved.
Switzer: And it sounds like it won't be until next year or.
Grayson: And, maybe not even then.
Switzer: All right, well, Clay, thank you so much for spending time with us today.
Grayson: Thank you, sir.
Switzer: Clay Grayson is an attorney in Mount Pleasant, South Carolina. Remember, you can hear this show again at our webpage. South Carolina publicradio.org. and you can find us where wherever you find Podcasts with the South Carolina Business Review. This is Mike Switzer.
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