Kentucky NIL Laws: Rules for College and High School Athletes

Kentucky = “Aggressive Compliance” model. SB 6 (2022) → SB 3 (2025, emergency legislation). SB 3 authorizes DIRECT institutional payment + “Poison Pill” liability protection + Open Records exemption. UK: “Champions Blue LLC” (private-equity-ready) + “BBNIL Suite” (JMI Sports). UofL: “502 Circle” integrated model (Learfield). “Bourbon & Blue” strategy: WinStar Farm (Reed Sheppard), Club Blue bourbon, Mr. & Mrs. Bourbon (UofL). Tax: 4.0% flat → 3.5% (Jan 2026) vs. Tennessee 0%. KHSAA permits high school NIL but NO school IP. Here’s the complete guide.

Kentucky’s NIL Evolution

Kentucky = “Aggressive Compliance” — positioned as “safe harbor” for institutional risk while maximizing commercial potential. Evolution from SB 6 (2022) to SB 3 (2025) represents paradigm shift from “facilitation” to “direct compensation.”

Senate Bill 6 (2022) — The Framework of Facilitation:

• Preceded by Governor Beshear Executive Order 2021-418 (June 24, 2021)
• Sponsored by Senator Max Wise
• Codified executive order: Athletes have right to earn compensation
• “NIL 1.0” legislation: Prohibited pay-for-play, limited institutional involvement
• Firewall between university treasury and athlete bank accounts
• Mandated financial literacy education

Senate Bill 3 (2025) — The House Enabler:

• Passed March 2025 with EMERGENCY declaration (immediate implementation)
• Paradigm shift: “Facilitation” → “Direct Compensation”
• KRS 164.6945: Athletes may receive compensation DIRECTLY from institution
• Or from “affiliated corporation” (Champions Blue LLC, 502 Circle)
• Statutory key unlocking House settlement revenue sharing

SB 3 — “Poison Pill” Liability Protection:

• Extends immunity to employees of “affiliated corporations”
• Same legal protections as state university employees
• Shields administrators from lawsuits (NIL disputes, unfair distribution)
• DELETED previous “gross negligence” exception—stronger shield

SB 3 — Open Records Exemption:

• Student-athlete agreements EXEMPT from Kentucky Open Records Act
• MASSIVE competitive advantage: Rivals cannot request financial terms
• Prevents negative recruiting (“They only paid him $X, we’ll pay more”)
• Athletes/agents prefer financial privacy

UK: “Champions Blue LLC” — Private Equity Model:

• Single-member LLC functioning as holding company for UK Athletics
• “Disregarded entity” for tax purposes
• Liability Shield: Separates commercial risks from university assets
• Agility: Faster decision-making, bypasses state procurement
• Future-Proofing: “Deal-ready” for private equity investment
• AD Mitch Barnhart’s structural innovation

UK: “BBNIL Suite” — Consolidated Collective:

• Unified “The 15 Club” and “Club Blue” under single umbrella
• Managed by JMI Sports (in-house agency model)
• “One-stop-shop” for corporate partners (Kroger, WinStar Farm)
• Single contract: Stadium signage + media buys + athlete NIL
• SB 3 legalizes licensing “Kentucky Wildcats” IP for third-party deals

UofL: “502 Circle” — Integrated Model:

• AD Josh Heird: Treats collective as critical component (not external vendor)
• Partnership with Learfield (multimedia rights holder)
• Can use official UofL marks/logos (SB 3 authorization)
• “Flash Give” campaigns during live events (jumbotron prompts)
• Tiered membership model: Practice access, meet-and-greets, exclusive content
• “Subscription” model = predictable revenue stream

“Bourbon & Blue” Strategy:

• Unique Kentucky differentiator: Bourbon + Thoroughbreds
• Club Blue: Bespoken Spirits co-branded bourbons (“Team” + “Select”)
• Evan Williams: Official Spirit of UK Athletics (Learfield)
• Reed Sheppard: WinStar Farm (stallion “Life Is Good”)
• Will Levis: Claiborne Farm (stallion “War of Will”)
• UofL: Mr. & Mrs. Bourbon + Russ Smith → “Louisville Gold” (1,200 bottles)
• “Product-led” NIL model = more sustainable than donor solicitation

Tax: 4.0% Flat → 3.5% (Jan 2026):

• Kentucky: 4.0% flat income tax (scheduled to drop to 3.5% Jan 1, 2026)
• Tennessee: 0% state income tax on wages
• “Tennessee Advantage”: UT players keep ~4% more of NIL money
• KY trajectory to 3.5% narrows gap but cannot match 0%
• Collectives may need to “gross up” contracts to offset difference

WKU: TOPS Fund — Mid-Major Challenge:

• Replaced “Red Towel Trust” with “TOPS Fund”
• AD Todd Stewart: Will provide “nowhere near” $20.5M cap
• Total athletic revenue ~$29.4M ($20.5M = 70% of entire budget)
• Expected: $1-3M revenue sharing (selective retention of key starters)
• Risk: Serves as “developmental feeder” for Power 4 programs

Why Kentucky Matters:

Kentucky = “Aggressive Compliance” model. SB 6 (2022) → SB 3 (2025, emergency). SB 3: Direct institutional payment + “Poison Pill” + Open Records exemption. UK: “Champions Blue LLC” (private-equity-ready) + “BBNIL Suite” (JMI Sports). UofL: “502 Circle” (Learfield integration). “Bourbon & Blue”: WinStar Farm, Club Blue bourbon, thoroughbred deals. Tax: 4.0% → 3.5% (Jan 2026) vs. TN 0% (“Tennessee Advantage”). KHSAA permits HS NIL but NO school IP.

Kentucky College NIL Rules

Governed by SB 3 (2025). “Aggressive Compliance” model: Direct institutional payment authorized + liability protection + records exemption.

What Kentucky Offers:

• DIRECT institutional payment (SB 3 KRS 164.6945)
• “Poison Pill” liability protection for administrators
• Open Records exemption (financial privacy)
• “Bourbon & Blue” unique asset partnerships
• Tax: 4.0% flat → 3.5% (Jan 2026)

UK Infrastructure:

• “Champions Blue LLC” = private-equity-ready holding company
• “BBNIL Suite” = unified collective (JMI Sports)
• Club Blue + The 15 Club consolidated

UofL Infrastructure:

• “502 Circle” = integrated model (Learfield partnership)
• Official UofL marks/logos authorized (SB 3)
• “Flash Give” live event campaigns

Kentucky High School NIL Rules

KHSAA (Kentucky High School Athletic Association) permits NIL but maintains strict boundary: NO school intellectual property usage.

Key Facts:

• Governing Body: Kentucky High School Athletic Association (KHSAA)
• Status: Permitted with strict restrictions
• Rule: Bylaw 1 (Institutional Control)

KHSAA IP Prohibition:

Students may monetize NIL BUT cannot use: School logos, uniforms, or facilities. “Clean break” requirement: Commercial identity separate from school. Example: Reed Sheppard (before UK) could sign shoe deal but NOT wear HS jersey in ad. SB 3 reinforced: KRS 156.070 forbids KHSAA schools from authorizing student use of school logo/property.

KHSAA Inducement Prohibition:

Anyone connected to school CANNOT promise NIL compensation as enrollment inducement. Maintains firewall against “pay-for-play” recruiting at high school level. Protects schools from liability/complexity of commercial partnerships.

College vs. High School: Key Differences

Feature	College (SB 3)	High School (KHSAA)
NIL Status	Legal (direct payment)	Permitted (restricted)
State Statute	SB 3 (2025, emergency)	KHSAA Bylaw 1
Direct Institutional Pay	YES (KRS 164.6945)	N/A
School Logos/Uniforms	Allowed (SB 3 licensing)	Prohibited (KRS 156.070)
State Income Tax	4.0% → 3.5% (2026)	4.0% → 3.5% (2026)
Open Records	EXEMPT (SB 3)	N/A
Liability Protection	Poison Pill" (SB 3)	N/A
Inducement Ban	CSC "Valid Business Purpose"	YES (strict)

The Key Distinction: Kentucky = “Aggressive Compliance” model. SB 3 (2025): Direct institutional payment + “Poison Pill” + Open Records exemption. UK: “Champions Blue LLC” + “BBNIL Suite.” UofL: “502 Circle” (Learfield). “Bourbon & Blue” unique assets. Tax: 4.0% → 3.5% vs. TN 0%. KHSAA permits HS NIL but NO school IP (KRS 156.070).

What Kentucky Athletes Can Do

College Athletes (UK/UofL/WKU):

• Receive DIRECT payment from institution (SB 3)
• Work with collectives (BBNIL Suite, 502 Circle, TOPS Fund)
• Sign endorsement deals (bourbon, thoroughbreds, local brands)
• Use school IP in commercial deals (SB 3 licensing)
• Monetize social media accounts
• Earn from camps, clinics, appearances
• Receive fan support through platforms like RallyFuel.

High School Athletes:

• Sign commercial endorsements (NO school affiliation)
• Social media monetization (NO school uniforms/logos)
• Autographs and appearances
• Build personal brand for college recruitment.

What Kentucky Athletes Cannot Do

College Athletes:

• Cannot endorse: gambling, tobacco, adult entertainment, controlled substances (NCAA rules)
• International students (F-1 visa): Cannot engage in active NIL on U.S. soil
• Must pass CSC “Valid Business Purpose” test (deals >$600).

High School Athletes:

• Cannot use school logos, uniforms, or facilities in commercial activity
• Cannot film in school gym or wear jersey in ads
• Cannot accept NIL as enrollment inducement
• School personnel cannot promise NIL for recruitment.

Both:

• Must pay Kentucky state income tax (4.0% → 3.5% Jan 2026) + federal
• Must maintain academic eligibility.

Compliance Requirements

For College Athletes:

UK:

• Work with “BBNIL Suite” (JMI Sports managed)
• Understand “Champions Blue LLC” structure
• Deals licensed through institutional framework

UofL:

• Work with “502 Circle” (Learfield partnership)
• “Flash Give” and membership opportunities

 WKU:

• Work with “TOPS Fund”
• Understand mid-major revenue constraints

All:

• Submit deals >$600 to CSC (NIL Go platform)
• Pass “Valid Business Purpose” test
• Financial terms exempt from Open Records (SB 3).

For High School Athletes:

• NEVER use school logos, uniforms, or facilities
• NEVER film in school gym
• “Clean break” between commercial identity and school
• School personnel CANNOT promise NIL for enrollment.

For Parents:

For college:

• SB 3 = direct institutional payment authorized
• “Poison Pill” protects administrators
• Open Records exemption = financial privacy
• Tax: 4.0% → 3.5% (Jan 2026) vs. TN 0% (“Tennessee Advantage”)
• “Bourbon & Blue” = unique Kentucky asset partnerships

For high school:

• KHSAA permits NIL but NO school IP; KRS 156.070 forbids school logo usage
• “Clean break” requirement; No inducement promises allowed.

How Fans Support Kentucky Athletes

Kentucky has passionate Wildcat and Cardinal fans—and now they can directly support athletes through NIL.

College Athletes:

Platforms like RallyFuel enable Kentucky fans to support athletes at:

• University of Kentucky – SEC (Power Four)
• University of Louisville – ACC (Power Four)
• Western Kentucky University – Conference USA (Group of 5)
• All sports—Football, Basketball, and more

Kentucky NIL Infrastructure:

UK “BBNIL Suite”: JMI Sports managed. Unified Club Blue + The 15 Club. “One-stop-shop” for corporate partners. “Champions Blue LLC” holding structure. UK “Bourbon & Blue”: WinStar Farm (Reed Sheppard). Claiborne Farm (Will Levis). Club Blue bourbon (Bespoken Spirits). UofL “502 Circle”: Learfield partnership. “Flash Give” campaigns. Tiered membership benefits. Mr. & Mrs. Bourbon + Russ Smith. WKU “TOPS Fund”: Replaced Red Towel Trust. Selective retention strategy.

How It Works:

1. Create an account on RallyFuel.com or the mobile app
2. Select your Kentucky school affiliation
3. Browse verified athletes currently on your program’s roster
4. Fuel athletes you want to support
5. Track your support through your fan dashboard

How It Works: When you purchase Fan Fuel, you’re purchasing Conditional NIL Engagement Rights (CNERs). If conditions are met, RallyFuel or its affiliate offers an NIL Agreement to the athlete. If conditions aren’t met—for example, if an athlete transfers—you receive an automatic refund.

Conditional Protection: RallyFuel’s conditional model protects Fan Fuel with automatic refunds if athletes transfer or conditions aren’t met. Kentucky fans can support players without financial risk.

Important: Fan support through RallyFuel is voluntary and conditional. Fuel purchases are not charitable donations. RallyFuel is not a guarantor that any athlete will accept an NIL Agreement. Purchasing Fan Fuel does not guarantee athletic performance, playing time, or any specific outcome.

High School Athletes:

Kentucky high school athletes may pursue NIL opportunities under KHSAA rules provided they have NO affiliation with their school (no logos, uniforms, facilities) and receive no NIL as enrollment inducement.

Learn More About the NIL Landscape

Name, Image, and Likeness plays an increasing role in college sports, and understanding how it works often requires more than individual articles or news updates.

RallyFuel is a platform focused on NIL-related topics across college athletics. It brings together information about athletes, NIL activity, and the broader structure behind modern college sports, helping readers explore the topic in more depth.

Visit RallyFuel

Frequently Asked Questions

Can Kentucky high school athletes do NIL?

Yes, with strict limits. KHSAA permits NIL BUT athletes CANNOT use school logos, uniforms, or facilities. KRS 156.070 (SB 3) explicitly forbids KHSAA schools from authorizing student use of school logo/property. “Clean break” required: Commercial identity separate from school. Example: Reed Sheppard (before UK enrollment) could sign shoe deal but NOT wear HS jersey in ad. School personnel CANNOT promise NIL as enrollment inducement.

What is Senate Bill 3 (2025)?

Emergency legislation passed March 2025. “The House Enabler”: Paradigm shift from “facilitation” to “direct compensation.” Key provisions: (1) KRS 164.6945: Athletes may receive compensation DIRECTLY from institution or “affiliated corporation”; (2) “Poison Pill” liability protection for administrators; (3) Student-athlete agreements EXEMPT from Open Records Act; (4) Authorizes institutions to designate media rights holders (JMI Sports) for NIL deals. Statutory key unlocking House settlement revenue sharing for Kentucky schools.

What is “Champions Blue LLC”?

UK’s private-equity-ready holding company structure. Single-member LLC functioning as holding company for UK Athletics (AD Mitch Barnhart). Benefits: (1) Liability Shield—separates commercial risks from university assets; (2) Agility—faster decision-making, bypasses state procurement; (3) Future-Proofing—”deal-ready” for private equity investment; (4) Can sell minority stake to capital partners without selling university. “Disregarded entity” for tax purposes. Most innovative corporate structure in college athletics.

What is the “Tennessee Advantage”?

Tax competition in NIL recruiting. Tennessee: 0% state income tax on wages. Kentucky: 4.0% flat tax (dropping to 3.5% Jan 1, 2026). Impact: UT players keep ~4% more of NIL money. On high-value contracts = tens of thousands of dollars difference. Kentucky response: Tax reduction trajectory + “Bourbon & Blue” unique assets + low cost of living pitch. Collectives may need to “gross up” contracts to offset difference when recruiting against UT.

What is the “Bourbon & Blue” strategy?

Kentucky’s unique NIL differentiator using twin pillars: Bourbon and Thoroughbreds. Bourbon: Club Blue bourbon (Bespoken Spirits “Team” + “Select”); Evan Williams (Official Spirit of UK Athletics via Learfield); UofL “Louisville Gold” (Mr. & Mrs. Bourbon + Russ Smith, 1,200 bottles). Thoroughbreds: Reed Sheppard → WinStar Farm (stallion “Life Is Good”); Will Levis → Claiborne Farm (stallion “War of Will”). “Product-led” NIL model = more sustainable than donor solicitation. Taps into immense wealth of horse racing industry.

What happens if an athlete I supported transfers?

If an athlete transfers or selects a different school during the conditional period, you receive an automatic refund to your original payment method. No manual request is required.

Kentucky: The Bluegrass Business Model

Kentucky = “Aggressive Compliance” model—positioned as “safe harbor” for institutional risk while maximizing commercial potential. Legislative evolution: SB 6 (2022) → SB 3 (2025, emergency legislation). SB 3 key provisions: Direct institutional payment authorized (KRS 164.6945); “Poison Pill” liability protection (gross negligence exception deleted); Open Records exemption (financial privacy = MASSIVE competitive advantage); Media rights holder authorization (JMI Sports). UK: “Champions Blue LLC” (private-equity-ready holding company) + “BBNIL Suite” (unified collective via JMI Sports). UofL: “502 Circle” integrated model (Learfield partnership, “Flash Give” campaigns, tiered membership). “Bourbon & Blue” strategy: WinStar Farm (Reed Sheppard), Claiborne Farm (Will Levis), Club Blue bourbon (Bespoken Spirits), Evan Williams (Official Spirit), UofL “Louisville Gold” (Russ Smith). Tax: 4.0% flat → 3.5% (Jan 1, 2026) vs. Tennessee 0% (“Tennessee Advantage”). WKU “TOPS Fund”: Mid-major challenge (~$1-3M vs. $20.5M cap). KHSAA permits high school NIL but NO school IP usage (KRS 156.070); “clean break” requirement; no inducement promises.

For college athletes ready to maximize their NIL potential, RallyFuel provides fan-powered support with conditional protection. Explore verified Kentucky athletes and start fueling today.