Almost every State in the country now allows student athletes to participate in marketing and financial exploitation of their name, image and likeness (“NIL”). This has allowed athletes to monetize their college (and even high school) sports careers. In addition to allowing an athlete to profit from their NIL, most newly enacted State laws allow athletes to hire agents, brokers and attorneys to help arrange and negotiate these deals. And, the NIL lawyers here at Revision Legal endorse what the statutes allow. NIL deals may be somewhat new to college athletes, but NIL contracts and arrangements have been around for a long time with professional athletes. Thus, the contracts are long, involved, contain lots of “boilerplate” language and you need someone on “your side” to make sure you are not taken advantage of. Hire lawyers and agents. They will help maximize the money you can make and make payment legally binding on the licensee of your NIL rights. The “licensee” is the endorsement/marketing company that is buying your NIL rights.
Even though NIL agreements are each complicated and legally complex, there are some basic parts of every NIL agreement. The main parts are:
- Identification of the parties
- Payment obligations
- Obligations/rights with respect to NIL, talent appearances, etc.
- Default provisions
- Other considerations
It is important that an NIL contract carefully identify the parties involved. It is best to have one specifically identified company that is licensing the NIL rights. Sometimes, unscrupulous endorsement companies will try to include “affiliates” and “subsidiaries” in the definition of who is licensing the NIL rights which leads to several companies having claims against the talent’s time and rights. Also, it is important to avoid having agents and/or brokers defined as the licensee. Likewise, only the student athlete should be identified as a party; not friends, family, brokers, agents, etc.
In terms of payment, usually the payment terms are flat fee such as a $1 million endorsement deal for two years. From there, however, matters can be very open-ended and “what sounds great” can be lost in the details. Consider: is that $1 million paid out evenly over 24 months? Or is it one lump sum at the beginning, is it an “advance” or will payment be made in small monthly payments with a lump sum coming at the end of the two years? Is it guaranteed payment or contingent?
With respect to the obligations and rights of the student/athlete talent, these provisions, of course, deserve special attention. The main question is how demanding will the obligations be to make appearances, show up for photo and video shoots, etc. Special attention must also be paid to so-called morality provisions which cover criminal behavior, expression of political views, etc.
Default provisions are crucial too. “Default” is a legal term that indicates that one party to a contract believes the other has violated the contract. The contract will generally say what are the possible remedies such as refund of money, termination of contract, etc.
“Other considerations” can cover a lot of ground, but one key area to include well-crafted NIL contract provisions involves requirements and rules imposed by schools and conferences. Violate those types of rules and your NIL deal will be worthless.
Contact the NIL Rights and Esports Attorneys at Revision Legal
For more information, contact the experienced NIL and Esports Lawyers at Revision Legal. You can contact us through the form on this page or call (855) 473-8474.
