Guest post: Here's how a school COULD block an NIL deal

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Back in the early days of NIL, I remember a lot of concern about what sorts of deals a school could potentially block. Beyond schools wanting to protect their intellectual property or existing major brand deals, there was also a concern about athletes potentially doing deals in “sin” industries, like gambling, alcohol, or porn. I remember talking to a few compliance officers at public schools who basically told me that they probably couldn’t stop an athlete from doing an OnlyFans or brokering a sin industry deal.

Two years into NIL, incidents where a school might seriously consider trying to block a deal have been rare. While there were a few gambling-related NIL deals, changes to the American Gaming Association’s responsible marketing code essentially ended any new NIL activity. Other sin industries either haven’t tried, or haven’t been successful, in engaging in any meaningful NIL activity, and concerns about deals that might compete with university agreements (such as with apparel companies) have been resolved in private, rather than with penalties or noisy litigation. Nobody wants to seem like they don’t support athlete NIL, after all.

But there’s one potential new type of NIL deal that actually could get schools to actively attempt to restrict…AI.

To explain why, and to break down what the law does, and doesn’t say, about a school’s ability to tell an athlete that ‘no, you can’t do a deal promoting software that will help people cheat on their essays”, I’ve brought in Regular Extra Points Contributor Sam Ehrlich of Boise State, and New Extra Points Contributor Neal Ternes, a professor at Arkansas State. I’ll turn the time over to them:

Back in February, LSU gymnast Olivia Dunne posted a Tik Tok advertisement for CaktusAI that is still raising concerns about the types of NIL deals that schools are permitting their athletes to engage in.

CaktusAI currently brands itself as an academic assistant targeted toward students looking for assistance with a variety of different academic challenges. However, the software’s ability to write text (similar to programs like ChatGPT) has led many to speculate that the primary purpose of CaktusAI is to make it easier for students to cheat on assignments. To this end, Dunne’s video shows her using CaktusAI to write a school assignment for her right before it is due.

The video caused LSU to issue a statement that “using AI to produce work that a student then represents as one’s own could result in a charge of academic misconduct, as outlined in the Code of Conduct.” The statement was sent as universities all over the world scramble to emphasize to students that using CaktusAI, ChatGPT, and other uses of generative AI may constitute plagiarism depending on how the software is used.

None of this has stopped CaktusAI from signing NIL deals with athletes to promote its product. Former San Diego State guard Matt Bradley, former Alabama RB Jahmyr Gibbs, and former Miami basketball players Hanna and Haley Cavinder all had NIL deals with CaktusAI. At LSU, basketball star Angel Reese and incoming transfer Aneesah Morrow have also posted videos advertising the product.

How can athletes promote CaktusAI if the schools are worried about students using the software for cheating? Well, to address that we need to dive into the current legal framework of NIL and the common law standards surrounding academic misconduct at colleges and universities.

Using LSU as an example, we will try to answer three important questions:

1. Do schools have the legal authority to prohibit these types of NIL deals?

2. Do NIL deals like the one produced by Olivia Dunne violate school policies?

3. What sort of legal issues could these NIL deals pose beyond athletics?

Do Schools Have the Legal Authority to Prohibit NIL Deals with CaktusAI?

Louisiana state law—like the NIL laws in other states—allows colleges and universities to restrict NIL deals if such an agreement conflicts with the institutional values of the school.

“A postsecondary education institution may prohibit an intercollegiate athlete from using the athlete's name, image, or likeness for compensation if the proposed use of the athlete's name, image, or likeness conflicts with either of the following:

This clause is also common in many athletic departments’ guidelines for NIL enforcement. If we consider cheating a conflict with institutional values at a university (and it is hard to argue that we shouldn’t) then LSU clearly has the authority under state law to prohibit its athletes from signing deals with CaktusAI.

However, the institutional values phrasing is somewhat problematic. We have written elsewhere about how this phrase (and other types of content-based restrictions) are vulnerable to a First Amendment challenge. For those without the time to read a 20,000-word article on that subject, here is the short version:

NIL deals are a form of commercial speech. Universities and colleges are delegated the power to restrict athlete NIL deals before they can be completed and have rules that allow them to prohibit deals based on (among other things) their content. These types of restrictions are only constitutional when they represent a VERY important and narrowly tailored state interest, and a school simply engaging in economic protectionism (i.e., preventing an athlete at a Nike school from signing with a competitor shoe brand) is not an important state interest.

Moreover—and specific to LSU’s policy—undefined “institutional values” clauses are so vague that they become overbroad: meaning that they are so vague that they extend well beyond the state’s narrow interests in restricting individual rights.

However, what makes the CaktusAI issue different from other NIL deals is that protecting academic integrity at state educational institutions is historically recognized as an important and narrowly defined state interest. 

Unlike with restrictions on tobacco, alcohol, or economic competitors of schools’ brand partners, there is a very clear and obvious reason why cheating presents a direct threat to the core mission of a postsecondary institution. So even if you (like us) are skeptical of the enforceability of institutional values clauses as they are currently, there is a possibility that LSU, or any other school or state government, could simply turn around and write a more narrowly tailored policy that restricted deals with programs like CaktusAI because their primary use is (allegedly) to undermine the school’s academic mission.

In short, LSU (and probably most schools) currently have the authority to restrict their athletes’ deals with CaktusAI and might be able to craft narrower policies restricting these types of programs should their current restrictions ever be overturned due to their overbreadth. While LSU and other schools haven’t used this authority to prohibit these types of NIL deals, there is a case to be made that they should, since not doing so could cause problems related to their institutional codes of conduct.

Do NIL deals like the one produced by Olivia Dunne violate school policies?

Another factor to consider is the relationship between these NIL deals and school policies. There are some universities that explicitly have policies on proper use of AI software, but many, including LSU, have chosen to simply reiterate that improper use of AI software could potentially violate existing policies regarding plagiarism. NIL deals with CaktusAI wouldn’t likely violate plagiarism codes unless the athletes recorded themselves using the program to write an essay that they then turned in with minimal to no modification. However, advertising for these services could possibly violate a school’s code of conduct.

Interestingly, there is an argument to be made that Olivia Dunne’s commercial violated LSU’s Code of Conduct. Under Section 10.2 (Behavioral Misconduct) it is stated that any student may be in violation of the code of conduct and receive punishment if they engage in complicity, which is defined as “attempting to commit, knowingly permitting, encouraging, or assisting others with the commission or attempted commission of any act, omission or conduct prohibited under this Code.” One could reasonably interpret Dunne’s commercial in which she is depicted using CaktusAI to write an essay for her as an attempt to encourage other students to do the same—something which LSU has clearly defined as plagiarism within their Code of Conduct.

This isn’t a slam dunk case. The text of Dunne’s video states that she is looking to “get her creativity flowing for her essay due at midnight,” so she could potentially argue that her use of CaktusAI in her video was done in a way that complied with the LSU Code of Conduct. Still, that argument feels hollow when she gives a thumbs up, showing her essay presumably finished after seconds of being in the CaktusAI browser window.

It is also worth noting that LSU’s complicity policy is more explicitly defined than other universities that have them – and there are several universities that do not have them at all. For example, Purdue’s definition of academic dishonesty clearly states that “knowingly to aid and abet, directly or indirectly, other parties in committing dishonest acts is in itself dishonest,” which would seem to be even less tolerable towards these types of NIL deals than LSU’s. Alabama meanwhile prohibits “any knowing or intentional help, attempt to help, or conspiracy to help another student commit an act of academic dishonesty,” which might read as being more specific to assisting in specific acts of dishonesty, and thus less likely to be applicable to athlete NIL advertisements.

So, whether an athlete engaging in NIL activity with AI programs is violative of a student code of conduct will vary significantly from one institution to another.

What sort of legal issues could these NIL deals pose beyond athletics?

Here’s a hypothetical: An LSU student gets caught using CaktusAI to write a paper. Can the school punish the student even if the school is allowing its athletes to promote that software (potentially) in violation of their own Code of Conduct?

The short answer is yes, and to explain why, let’s look at another hypothetical. An LSU student shows up to class after crushing twelve cans of Bud Light. LSU has licensing deals to put its logo on Bud Light packaging and even sells beer at athletic events. But obviously showing up to class drunk is still a violation of student policy (and Louisiana state law).

Just like beer, CaktusAI has reasonable uses that are not prohibited by school rules. AI programs can help check for plagiarism, they can help edit writing, and they can assist with notetaking. There are plenty of ways to use CaktusAI, and that flexibility differentiates the product from, say, websites that publish answers to a teacher’s exams. Moreover, there is a significant difference between the potential violation Olivia Dunne may have been considered to have committed and a student who commits plagiarism.

You can’t break one rule just because one person got away with violating another. So a student who violated LSU’s student code of conduct by using CaktusAI to cheat on an assignment would still be punished even though some LSU athletes have promoted the company.

But—and this is important—circumstances could potentially change to force schools to crack down on these types of NIL deals.

Currently, AI writing programs are new technology with many potential uses. But if we start to see research showing most users employ CaktusAI to cheat on their assignments then we could potentially see some issues. This could already be the case—there just isn’t enough hard evidence yet to be certain. The company seems to have recognized this as well, and their advertisements with Angel Reese and Aneesah Morrow do not highlight the functional use of their program for writing school assignments.

Still, if CaktusAI’s primary function is demonstrated through research to clearly be cheating though, allowing athletes to promote it could damage the ability of universities to enforce their academic integrity policies.

We mentioned before that courts have recognized that colleges and universities have a significant interest in promoting academic integrity and are given a significant deference to promote policies to that effect. However, if schools are openly allowing multiple athletes to promote CaktusAI after research is published that demonstrates its primary use is to commit plagiarism, then it's possible that the deference granted to schools to enforce their academic misconduct penalties might receive less latitude from courts if challenged.

The full extent of how much this could damage universities is uncertain, but it would almost certainly mean more legal challenges to academic misconduct accusations if universities were to continue to allow NIL deals with CaktusAI after the software was proven to be predominately a tool for cheating.

While it is unlikely that current NIL deals will be an issue, it is in the best interests of universities to limit these types of arrangements and to encourage athletes participating in them to avoid encouraging the use of these programs for anything that might be considered academic misconduct. Right now, schools have significant power to police these individual NIL deals and they should be reviewing arrangements to ensure that the content of these advertisements doesn’t encourage violations of their institutions’ codes of conduct.

We are still in the early stages of learning how AI will impact college work or what policies are necessary to encourage academic integrity with the proliferation of this new technology. The NIL deals between CaktusAI and Angel Reese and Aneesah Morrow demonstrate that there are ways athletes can promote these programs without encouraging plagiarism, so it is probably heavy handed to say that colleges should prohibit all deals with Caktus and similar AI companies. Still, schools do need to be careful about the content and number of these deals just in case we do find out that their overwhelming use is for cheating.

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