Tennessee NIL Laws: Rules for College and High School Athletes

Tennessee stands as a primary architect of the NIL revolution. Through Senate Bill 536 and the landmark Tennessee v. NCAA antitrust lawsuit, the state constructed a “sovereign shield” that immunizes its institutions from NCAA enforcement and supports direct revenue sharing. The University of Tennessee’s pioneering 10% “Talent Fee” on season tickets funds player compensation directly.

High school athletes, however, face strict TSSAA amateurism rules with some of the harshest penalties in the country. Here’s the complete guide to Tennessee NIL laws.

Tennessee’s NIL Leadership

Tennessee’s NIL landscape is defined by aggressive state legislation, national antitrust litigation, and a pioneering consumer-side funding model.

Senate Bill 536 (Effective July 1, 2025) — “Sovereign Shield”

• Signed by Governor Bill Lee in May 2025
• Prohibits the NCAA from penalizing Tennessee institutions for NIL activities authorized by state law
• Mandates “no limits” on NIL compensation unless imposed by federal court or statute
• Removes prior barriers to institutional involvement (schools can directly facilitate and provide compensation)
• Liability shift: NCAA can be liable for damages if it punishes schools for complying with state law

Tennessee v. NCAA Antitrust Lawsuit (2024–2025)

• Filed January 2024 by Tennessee and Virginia Attorneys General
• Challenged the NCAA’s “NIL recruiting ban” as an illegal restraint of trade under the Sherman Act
• Federal court issued a preliminary injunction blocking NCAA enforcement
• Settlement (early 2025): NCAA permanently enjoined from restricting third-party negotiations with recruits
• Result: Coaches can openly direct recruits to collectives; negotiations can occur earlier and more explicitly

House v. NCAA Settlement (2025)

• Direct revenue sharing authorized (~$20.5–$22M annual cap)
• Cap increases ~4% annually
• Effective July 1, 2025 (synchronized with SB 536 implementation)

High School Status — TSSAA Conservative Stance

• NIL permitted with strict guardrails
• Strict No-Affiliation mandate (no school IP)
• Schools and boosters prohibited from facilitating NIL
• Severe penalty: 12-month ineligibility for amateur-rule violations

Why Tennessee Matters

Tennessee’s AG-led antitrust win reshaped national NIL recruiting rules. The University of Tennessee’s “Talent Fee” is the first explicit consumer tax earmarked for player compensation—making Tennessee the blueprint for a “pay-the-roster” era.

Tennessee College NIL Rules

Tennessee college athletes operate in a fully deregulated environment where state law provides a sovereign shield and institutions can directly facilitate compensation.

What SB 536 Guarantees

• “No limits” on NIL compensation unless federally mandated
• NCAA cannot penalize Tennessee schools for NIL activities authorized by state law
• Institutions can directly identify, negotiate, facilitate, and provide compensation opportunities
• Coaches can function as de facto deal facilitators (structure discussions, rate-setting, coordination)
• Athletes retain final right of refusal on all deals
• NCAA liability exposure if it punishes compliant schools

The “Talent Fee” Model (University of Tennessee)

• 10% surcharge on football season tickets labeled “Talent Fee”
• Projected $7.5M–$10M annually (Neyland Stadium 100,000+ capacity)
• Covers roughly ⅓ to ½ of the $22M revenue-sharing cap
• Remaining funds sourced from operating budgets and donor contributions (“Share the Revenue” fund)
• First explicit consumer tax specifically earmarked for player compensation

Revenue Distribution Strategy (Typical)

• Estimated 75–80% of revenue-share pool to football
• Remainder primarily to men’s and women’s basketball
• Potential Title IX tension: market-based distribution may create legal friction

Collective + Vendor Infrastructure

The Volunteer Club (Spyre Sports Group)

• Evolved from external collective to strategic partner/vendor
• Mechanism for exceeding the cap: third-party NIL is uncapped
• “Top-up” contracts for elite athletes beyond revenue share allocation
• Learfield partnership integrates athlete NIL with university IP for corporate sponsors
• Post-antitrust settlement: coaches can openly direct recruits to Spyre/collective channels

International Student Restrictions (F-1 Visa)

• F-1 visas prohibit off-campus “active income,” including most NIL activity
• Revenue sharing may be classified as employment income → visa risk
• Workarounds: home-country monetization; passive licensing theory (untested)
• International athletes may be excluded from direct revenue share checks pending fixes

Tennessee High School NIL Rules

Tennessee high school athletes may monetize NIL, but TSSAA remains “amateurism-first,” with severe penalties for violations.

Key Facts

• Governing Body: Tennessee Secondary School Athletic Association (TSSAA)
• Status: Permitted with strict restrictions
• Philosophy: “Performance vs. Instruction” distinction

TSSAA Amateur Rule (Core)

• Payment for instructional services (lessons) permitted
• Payment cannot be contingent on athletic achievement (no pay-for-play)

No-Affiliation Mandate

High school athletes cannot use:

• School name
• Logos/mascots
• Uniforms/jerseys
• Team identifiers in commercial NIL content

School + Booster Facilitation Prohibited

• Schools and boosters cannot solicit, negotiate, or promote NIL deals
• NIL used as a recruiting inducement is prohibited

Penalty (High Stakes)

• Amateur-rule violations trigger 12-month ineligibility in the sport where the violation occurred
• One of the harshest enforcement regimes in the country

Transfer & Eligibility Guardrails (TSSAA)

• Hardline stance against athletic-motivated transfers
• Students ineligible during the first semester cannot gain eligibility until the final day of the semester
• Non-traditional students (virtual/homeschool) must meet strict tuition/eligibility conditions at independent schools

College vs. High School: Key Differences

Feature	College (SB 536)	High School (TSSAA)
NIL status	Fully legal + “no limits”	Permitted (restricted)
Institutional pay	Allowed ($22M cap + uncapped 3rd party)	Prohibited
Third-party NIL	Unlimited	Allowed (no school affiliation)
Institutional facilitation	Explicitly allowed	Prohibited
School logos/uniforms	Allowed	Prohibited
NCAA enforcement	Blocked (sovereign shield)	N/A
Violation penalty	NCAA liable for damages	12-month ineligibility
Pay-for-play	Prohibited (nominally)	Prohibited

Key distinction: College is “no limits + facilitation.” High school is “no affiliation + harsh penalties.” The regulatory cliff is steep.

What Tennessee Athletes Can Do

College Athletes

• Receive institutional revenue sharing
• Receive institutional facilitation and negotiation of NIL opportunities
• Sign binding NIL contracts before signing an NLI
• Sign endorsements and brand deals
• Monetize social media
• Earn from camps/clinics/training
• Sell autographs/merchandise
• Make paid appearances
• Hire agents and attorneys
• Participate in collective-organized NIL
• Use school logos/uniforms (per licensing policy)
• Use school facilities for NIL activities
• Receive fan support through platforms like RallyFuel

High School Athletes

• Receive payment for instructional services (lessons)
• Monetize personal brand in individual capacity
• Sign endorsements (no school affiliation)
• Monetize social media (no school references)
• Operate clinics and camps
• Build personal brand separate from school identity

What Tennessee Athletes Cannot Do

College Athletes

• Accept pay-for-play (nominally; distinction increasingly semantic in the market)
• Hide NIL contracts from school compliance
• Sign deals conflicting with school sponsorships
• International athletes (F-1): engage in most active NIL on U.S. soil; may be excluded from revenue share

High School Athletes

• Use school name/logo/uniform/mascot in NIL content
• Accept payment contingent on athletic achievement
• Receive NIL facilitation from schools or boosters
• Accept deals structured as recruiting inducements
• Violation triggers 12-month ineligibility

Both

• Must pay taxes on NIL income (TN has no state income tax; federal + self-employment apply)
• Must maintain academic eligibility

Compliance Requirements

For College Athletes

• Disclose NIL contracts to compliance office
• Work with institutional facilitation on deal structure where applicable
• Check sponsorship conflicts
• File federal taxes on NIL income (expect 1099s for $600+)
• International athletes: consult university international office before any NIL activity

For High School Athletes

• Never use school IP in NIL content
• Never accept performance-contingent compensation
• Never involve boosters/school personnel in facilitation
• Maintain strict separation between school identity and commercial identity
• Treat the 12-month penalty as zero-tolerance

For Parents

• Review contracts
• Set aside 25–30% for federal taxes
• Enforce no-affiliation content rules
• Avoid booster/school involvement in deal making
• Consider an attorney for significant deals

How Fans Support Tennessee Athletes

From Neyland Stadium to Thompson-Boling Arena, Tennessee fans can support athletes directly through NIL.

College Athletes

Fans can support athletes at:

• University of Tennessee (SEC)
• Vanderbilt (SEC)
• Memphis (AAC)
• Middle Tennessee, ETSU, UT Martin, Tennessee State, Tennessee Tech (C-USA / OVC / Big South)
• Belmont, Lipscomb (ASUN)
• All sports, not just football and basketball

How It Works

1. Create a RallyFuel account
2. Select your Tennessee school affiliation
3. Browse verified athletes
4. Purchase Fan Fuel
5. Track support via your fan dashboard

Conditional Protection: Fan Fuel creates Conditional NIL Engagement Rights (CNERs). If conditions aren’t met (including transfers), fans receive automatic refunds.

Important: Fan support 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

Tennessee high school athletes may pursue NIL individually, but must maintain strict separation from school identity under TSSAA rules. Schools and boosters cannot facilitate deals. Violations can trigger 12-month ineligibility.

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

When did Tennessee legalize NIL?

Tennessee enacted NIL in earlier cycles, but the current “sovereign shield” framework (SB 536) was signed in May 2025and became effective July 1, 2025, aligned with the House settlement.

Can Tennessee high school athletes do NIL?

Yes, but with strict restrictions: no school IP, no performance-contingent payment, and no school/booster facilitation. Violations trigger 12-month ineligibility.

Do Tennessee athletes pay taxes on NIL income?

Tennessee has no state income tax, but athletes still owe federal income tax and self-employment taxes. Many set aside 25–30% of gross earnings.

What is the “Talent Fee”?

A 10% surcharge on UT football season tickets earmarked for player compensation. Projected to generate $7.5M–$10M annually.

What was Tennessee v. NCAA?

An antitrust lawsuit filed in 2024 that challenged NCAA NIL recruiting restrictions. The outcome permanently limited NCAA ability to restrict third-party NIL negotiations with recruits, effectively opening the recruiting market.

What happens if an athlete I supported transfers?

If conditions aren’t met during the conditional period (including transfers), an automatic refund is issued to the original payment method.

Tennessee: The Volunteer State in the Era of Compensation

Through SB 536 and Tennessee v. NCAA, Tennessee built one of the most deregulated NIL environments in the nation. The sovereign shield blocks NCAA penalties, recruiting negotiations are fully open, and the Talent Fee pioneered consumer-side funding for player compensation. High school athletes, meanwhile, face a strict amateurism regime with severe penalties—creating a dramatic compliance cliff from prep to college.