Schools in Virginia will be able to directly pay athletes via name, image and likeness deals thanks to a state law signed Thursday morning, marking another significant step in the professionalization of college sports.

The new law, which is scheduled to take effect July 1, is the first in any state to make it illegal for the NCAA to punish a school for compensating athletes for their NIL rights. Current NCAA rules prohibit schools from signing NIL deals with their own players. The law could either give Virginia schools a significant recruiting advantage or provide a catalyst for similar changes elsewhere.

“If this law gets us closer to a federal or a national solution for college athletics then it will be more than worthwhile,” University of Virginia athletic director Carla Williams said. “Until then, we have an obligation to ensure we maintain an elite athletics program at UVA.”

The law explicitly states that athletes should not be considered employees of their school. Schools in Virginia are still not allowed to pay athletes for their performance in a sport, but starting this summer, they will be able to use university or athletic department funds to pay athletes for appearing in marketing campaigns. Williams said this was “maybe a distinction without a difference, but there’s a distinction there.”

Babcock said Virginia Tech is considering a number of methods for how it might deploy school funds in the future. Options could include contracting with third parties such as a marketing agency or a booster collective to pay the athletes, instead of cutting a check directly from the athletic department. He said the new law puts Virginia schools in a good position for both the current NIL marketplace as well as other forms of payment “that we think we see around the corner.”