NASHVILLE, TN — The Tennessee Secondary School Athletic Association’s (TSSAA) Legislative Council recently passed a measure which amended its bylaws and specifically its definition of “amateur” athlete. This amendment allows high school student-athletes across the state of Tennessee to receive compensation for activities not related to their athletic performance as long as there is no TSSAA or school involvement. High school student athletes are not allowed to use anything that shows association with their school or the TSSAA in their new marketing opportunities. 

Nevertheless, this new measure has brought Name, Image, and Likeness (“NIL”) to the Tennessee high school landscape. With opportunities to compensate, there are important pieces of information that both parents and high school student athletes should be aware of as they navigate these new opportunities.  

Miles McDowell, an attorney with Lewis Thomason, provides the following list of four important things to be aware of moving forward. This is not legal advice and should not be interpreted as such.  For more specific questions and concerns, it is best to reach out to hired counsel to make sure you are not doing anything to put yourself or the student-athlete at risk.

1. Hire Representation. Whether this is an attorney, a licensed agent, or other advisor, it is important that the student-athlete has someone in their corner that will look out for their best interests. Contracts are full of terms and clauses which the ordinary person may not understand. While the business who is offering money to use the student-athlete’s NIL may appear to have the student-athlete’s best interest at heart, parents and student athletes should always have a legal representative review these contracts. 

2. Focus on Developing the Student-Athlete’s Athletic Ability. The most common complaint about NIL entering high school is that players focus more on making money than the sport itself. Performance on the field is the most important aspect when it comes to NIL. If a student-athlete is compensated, but their performance suffers, their brand also suffers. Success on the field or court directly correlates to NIL opportunities. The student-athlete’s primary focus should be on perfecting their craft and preparing for the next level in their sport rather than making money from NIL opportunities. 

3. Understand the Market for High School Student-Athletes. An athlete generally has three distinct markets where their NIL can be the most profitable:  the athlete’s high school region, college region, and professional region. A few also gain national market. These are your Lebron James, Patrick Mahomes, and Aaron Judges of the world. Even fewer high school athletes ever are household names. So high school athletes generally only have their small high school regions where they will be able to truly profit from their NIL. There are also different markets depending on the sport a student-athlete plays. Overall, with there being far more high school athletes than there are college athletes, parents and student athletes should understand that NIL will not result in student-athletes making large sums of money.  

4. Taxes. The old saying is “there are two things certain in life: death and taxes.” This is true for NIL. While Tennessee does not have state income tax, the money made from NIL deals is taxable income and must be reported to the federal government. Failure to report any income may run the risk of later being penalized and/or investigated by the IRS. It is best to reserve around 20% of any money earned from NIL deals to protect the student-athlete.  You should consult a tax advisor with specific questions.

Lewis Thomason has offices in Knoxville, Nashville, and Memphis. Lewis Thomason attorneys cover the entire state of Tennessee and serve regional and national clients. We have attorneys licensed in Alabama, Arkansas, California, Georgia, Florida, Kentucky, Missouri, Mississippi, South Carolina, and Texas. 

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