New Mexico Squandered the Best NIL Law
Somewhere down the road, I made a wrong turn. Multiple job opportunities have burdened me with endless examination of NIL legislation. I have spent hours parsing every word of every section of every NIL law. I have seen the identical boilerplate copied and pasted time and time again; each state’s articulation piecemealed together from those who have passed legislation before them. It is a tortured existence, but someone must do it.
In this monotony of NIL laws, one stood out from the rest: New Mexico.
A state whose claim to fame is a fictional methamphetamine supplier.
A state that hasn’t had an athlete who I can recall since Pacers’ legend Danny Granger played for the University of New Mexico.
From July 2021 through April 2023, New Mexico did what every other state has refused: create a NIL carveout for sneaker endorsements.
§ 3A(2) of New Mexico’s old NIL law reads:
A post-secondary educational institution shall Not… (2) prohibit or discourage a student athlete from wearing footwear of the student athlete's choice during official, mandatory team activities so long as the footwear does not have reflective fabric or lights or pose a health risk to a student athlete
In April 2023, New Mexico amended its NIL law, and the above language was omitted. This action by state lawmakers removed one of the most forward-thinking pieces of NIL legislation that mutually benefitted student-athletes and the recruiting abilities of the Lobo and Aggie coaching staffs.
New Mexico’s old law conflicted with NCAA policy:
schools cannot allow student-athletes to promote their activity while participating in required athletics activities (pre-and postgame activities, court celebrations and news conferences)
While NCAA rules prohibit in-game NIL endorsements, under New Mexico’s old law, any challenge or punishment levied on athletes by the NCAA for this reason ran a substantial risk of an antitrust challenge. New Mexico’s old law gave legitimacy to a sensible exception to an extremely broad NCAA restriction, a restriction that, in the instant case of shoe endorsement, would be hard to show any pro-competitive justification for.
Why was New Mexico’s old law so important?
Just last week, Kentucky guard and expected NBA lottery pick Justin Edwards signed a shoe deal with Klutch Athletics by New Balance. However, unlike other shoe deals, Edwards cannot wear Klutch Athletic shoes during competition or any off-court endorsement opportunities utilizing University of Kentucky trademarks. The University of Kentucky has an exclusive apparel deal with Nike, and as a result of this agreement, all athletes must wear Nike apparel during team-related events.
Kentucky, and now, every state, expressly gives schools the right to preclude NIL endorsements that conflict with institutional apparel contracts. Kentucky NIL law § I outlines:
The postsecondary educational institutions located in the Commonwealth of Kentucky shall not prevent a student-athlete from earning compensation for the use of the name, image and likeness of the student-athlete… except as outlined below:
B. Compensation in exchange for a contract of endorsement, promotion or other activity that the postsecondary educational institution determines is in conflict with an existing contract of endorsement, promotional or other activity entered by the postsecondary educational institution;
Kentucky NIL law has manifested a shoe deal with Justin Edwards unlike any we have seen before. Restrictions on athletes’ ability to choose their footwear is a uniquely collegiate dilemma. Old New Mexico law challenged this standard.
Both Division-I institutions in New Mexico are bound to exclusive apparel deals –– the University of New Mexico with Nike and New Mexico State with Under Armour. Under the old New Mexico NIL policy, athletes at these institutions were free to wear the footwear of their choice. In addition, athletes at these schools could market their feet as advertising space or, for the most elite athletes in the country, receive a shoe deal.
With the emergence of NIL, NCAA basketball seems like the perfect stage for shoe deals. While notable stars like Bronny James and Catlin Clark have inked deals with Nike, there is no conflict as USC and Iowa both have exclusive apparel deals with Nike.
Presently, collegiate athletes have little room to negotiate shoe deals. The lion’s share of collegiate programs, and virtually all programs with the resources to recruit athletes of shoe deal caliber, have existing apparel contracts. Athletes at schools without contracts run the risk of NCAA action against a player for promoting in-game NIL.
Using professional basketball as a corollary: while Nike has an exclusive jersey license and dominates on-court NBA footwear by volume, many stars have aligned with other brands for their shoes, usually with significant financial consideration. Kawhii Leonard has partnered with New Balance, Steph Curry with Under Armour, and a handful of all-stars with Adidas. There is no more valuable occasion for athletes to leverage their NIL than when the cameras broadcast their game nationwide.
Allowing student-athletes the same ability to negotiate with multiple brands instead of only the brand their school has a partnership with creates significant bargaining power for the athlete to monetize their brand. This leads to higher NIL earning power for student-athletes.
It is both easy and fun to speculate on how much money transcendent basketball stars like Zion Williamson could have made from a NIL shoe deal while in college. Old New Mexico NIL law could have facilitated such a deal and, in the process, made UNM and NMSU the premiere destination for elite college hoopers looking for a signature shoe.
Shoe deals have become fundamentally entrenched in basketball and, more broadly, athletic culture. From Tiger Woods to Derek Jeter, athletes in every sport have cashed in on the value of their feet. NCAA policy and state NIL legislation not allowing college basketball players and all other athletes to monetize their shoes during play is scandalous.
All major professional sporting leagues have little restriction on what brand of footwear an athlete can wear during competition. Is this because they understand the rich tradition of footwear in athletics and want to facilitate a medium for footwear expression? Maybe… but probably not.
It is undoubtedly much more lucrative for pro sports organizations to sign apparel contracts that include footwear; however, professional sports leagues have players’ unions to appease, and taking away shoe deals that provide financial gains and autonomy to players may cause some upheaval.
The NCAA, unlike professional sports, can make unilateral changes to league policies with no recourse. Restricting student-athlete autonomy in both what they can wear and soliciting lucrative shoe deals helps schools receive bigger payouts from exclusive apparel contracts.
The calculus of this decision is evident. Do legislators value granting in-state institutions NIL laws that increase the valuation of apparel contracts? Or do legislators understand the fundamental immersion of shoes in athletics, want to grant players an additional revenue source, and allow athletic departments in their state to have the most advantageous state law for athlete recruitment?
New Mexico, for a while, was the most progressive NIL state. For a five-star recruit who desired to have a signature shoe, there was no state more friendly to the pursuit than pre-April-2023 New Mexico.
I hope this article reaches state and federal lawmakers.
For states yet to enact NIL legislation, implementing the New Mexico shoe deal carveout will set you apart. Enabling student-athletes to cash in where other states prohibit endorsement is an attractive recruiting tool. Brands are hungry for the tried and tested shoe endorsement; allowing shoe companies to enter the NCAA arena in your state will be welcomed with open arms and checkbooks.
If a federal NIL law is to happen, it should include carveouts that allow student-athletes to cash in on footwear. For decades, college athletic departments have been reaping the financial benefits of athletes’ on-court performance. Allowing student-athletes to profit from in-game shoe deals is an ethical concession – a concession mirrored by the most prominent professional sports leagues.
