NIL Do’s and Don’ts For Student-Athletes: Three Things To Watch For

Courtesy: Robert Dickson

The new year is a great opportunity for NCAA swimming and diving student-athletes to capitalize off name, image, and likeness (NIL) opportunities as brands have fresh partnership budgets to allocate. Athletes can sell the fast-approaching conference and NCAA championships as the most-viewed time of the year. Signing a NIL deal is exhilarating, but athletes should exercise caution before signing on the dotted line.

1. Don’t Feel Pressured

Negotiating with any brand can be long and frustrating. Some brand deals can take months to iron out the deliverables and come to an agreement on the total amount. Throughout the process, it is important for student-athletes to stay patient and not to feel pressured to accept an offer. If the brand’s offer is less than expected, provide them with a counter offer. When countering, provide data on why the counter offer is the appropriate amount. Examples include any past work with brands and the performance of those NIL deals including insights, likes, engagement, or views.

A major red flag when negotiating with a brand is a tight deadline to accept an offer. A good rule of thumb is to request 72 hours before providing a final decision.

2. Read the WHOLE Agreement

This might be obvious, but there are certainly examples of student-athletes that accepted an NIL deal without reading the final contract and missed predatory language. Former University of Florida defensive tackle, Gervon Dexter, entered into an NIL agreement in which Dexter was to pay 15% of his pre-taxed NFL earnings for the next 25 years. Specific clauses to pay careful attention to include exclusivity and performance of services. In reviewing the performance of services sections, ensure that you are performing a service and not simply receiving compensation as an inducement or as a result of your athletic performances. As an NCAA athlete, you cannot receive “pay-for-play” compensation. For example, a brand is prohibited from providing compensation for winning an event at conferences or breaking a NCAA record. If you read an NIL agreement and you do not fully understand some of the language, do not hesitate to reach out and seek guidance from those with experience in the industry.

3. Research for Conflicting Interests

Student-athletes likely will not be permitted to accept an NIL agreement with a company that is a competitor of a school’s existing sponsors. For example, this is the policy at Penn State for current student-athletes.

NIL Activity In Exclusive Categories:

Penn State maintains exclusive sponsorship arrangements in the following categories and therefore NIL activity with competing sponsors during Penn State Athletics official team activities in these categories are precluded:

• Athletic Footwear and Apparal – Nike
• Athletic Equipment – varies by sport
• Carbonated and non-carbonated, Non-Alcoholic Beverages – this is a very broad category that includes, but is not limited to Pepsi/Aquafina/Gatorade/Starbucks ready-to-drink coffee products. Student-athletes should assume that if it’s non-alcoholic and drinkable, it is likely a conflict.
• Banking Services – PSECU

It is best to do conduct additional research and check with your school before accepting an offer if there is a potential conflict.

One way for student-athletes to protect themselves in the world of NIL is by seeking an agent or attorney with experience in the field. In looking for an agent/attorney, do some research to ensure they have a credible background and can help you reach your specific goals with NIL. Agents/attorneys well versed in NIL and college athletes can effectively negotiate with brands and review contracts for any predatory language.

The information provided is for general informational purposes only and should not be construed as legal advice. For any specific legal issues, please consult an attorney licensed to practice law in your jurisdiction.