Newsletter, Image, Likeness Vol. 11: Let's Talk About Zip Code Clauses

The Weekly Longer NIL Thought.

NIL compensation cannot be contingent upon enrollment at a particular school.

That line is taken directly from the NCAA's Q&A document relating to its NIL interim policy.

Thus, you are unlikely to see language in contracts that requires an athlete's enrollment at a particular school to be a condition precedent to the receipt of compensation. That would just be too overtly in violation of NCAA rules.

Instead, brands have become a bit wiser. I made a fleeting reference to one such workaround in Vol. 5 of this newsletter when I mentioned there is such a thing as a Zip Code clause.

What is a Zip Code clause?

It is essentially contractual language that says if the athlete fails to reside in a certain jurisdiction during the term of the agreement, then the brand may, in its sole and absolute discretion, terminate the agreement, effective immediately, and be free of any further obligation to remit payment to the athlete.

Why is this language important?

I have honestly lost count of how many athletes have entered their names into the transfer portal. By December 16, 2022, that number was above 1,600. It must be much higher as of this date.

If you are a local or regional brand, then you probably do not want the athlete you are associating with and, who is supposed to promote your brand, picking up and leaving to a destination across the state, or worse, across the country. While the NCAA's position may be that your contract with the athlete cannot include a provision that allows you to break the deal if the athlete is no longer enrolled at a particular institution, the Association is not as clear about prohibiting a Zip Code clause that affords a brand to terminate the agreement if the athlete is no longer domiciled in the area surrounding said school.

Forget about brands. This clause is even more important for NIL collectives, which have the sole purpose of supporting specific schools. With a Zip Code clause, a multi-year contract may actually look more like a year-to-year agreement, given that the collective may be able to escape its obligations if the athlete decides to seek a new scenery.

The problem for the NCAA is that even if it decides to send new guidance that bans Zip Code clauses, brands and collectives will just think of a substitute provision to provide the same type of protection.

The Entire Oklahoma Football Roster Is Offered NIL Deals.

NIL collective Crimson and Cream has raised $1.6 million and is offering compensation to all 115 members of the football roster.

Jason Belzer says that more than half the team has already jumped on the opportunity.

Collectives Continue To Sign Existing Enrolees.

One of the more recent examples is the Garnet Trust signing South Carolina QB Spencer Rattler.

Rutgers Coach Greg Schiano Supports Collectives.

He spoke specifically about Rutgers' NIL collective, Knights of The Raritan.

"Like I said last time, I encourage our fans to step up because it definitely is part of college football now. It’s the way it is, and I know it’s the same in college basketball. Whether you like it or not, there’s a lot of different ways to look at it, really, and I understand everybody’s opinion, but it is what it is," Schiano said.

"It is the way current college football is, and for us to compete in the Big Ten East, we need to have that support, and I’m grateful for the support that we’ve received."

How NIL Is Assisting Top Baseball Programs.

“I think about college baseball as an example. We’re sitting in a state without a lottery, without a way to fund some things, where the average baseball player gets about a 42 percent scholarship,” said Charlie Winfield of the Bulldog Initiative, which benefits Ole Miss athletes. “This gives a way to kind of help bridge the gap, from a fairness standpoint, with what we’ve all been dealing with compared to a Vanderbilt, for example.”

The article where Winfield is quoted says NIL actually creates parity.

MarketPryce Fuels NIL Deals For Arizona Female Athletes.

The company founded by Jason Bergman has signed an exclusive NIL partnership agreement with Arizona to support its women's basketball and softball deals.

It has already brokered a deal with G.O.A.T. Fuel energy drink.

Former WVU AD Reflects On His Sudden Departure.

Shane Lyons says that disagreement about how the athletic department should interact with the school's NIL collective played a role and talked about his final meeting with WVU President Gordon Gee.

“One thing that came up was about the trust. ‘Well, we’re not aggressive enough in name, image and likeness.’ I tried to explain to him, we’re as aggressive as we can be without crossing the line in order to protect ourselves in getting involved in Title IX issues,” Lyons recalled.

“The trust has come up since it started, that the athletic department needs to be more involved. We’re involved as much as we can be as a department without crossing the line of saying ‘dollar for dollar, for male and female student athletes and person to person, the number of male and female.’”

Cornell Athletic Director Says NIL Is The Worst Change.

"Well, I’m just forced to say nationwide, the NIL situation has been an absolute disaster,” said J. Andrew Noel, Jr. “Programs can now, within the rules, buy a team. I hope the pendulum swings back, I hope it will. But it’s an absolute disaster.

“I could reel off many cases where athletes have been purchased under the guise of NIL and what they bring with their name, image and likeness, which in most cases is zero, but they still get paid hundreds of thousands of dollars. That’s the worst change I have seen in my life in athletics.”

You can start at the 8:30 mark below.

Florida Amendment To NIL Law Pushes Forward.

In Vol. 9 of this newsletter, the weekly longer NIL thought concerned Rep. Chip LaMarca's proposed legislation to modify Florida's NIL law. Give it a read to catch up on what is contained within the bill.

This week's update is that the legislation received the unanimous approval of a House subcommittee. It received support from the University of Miami, FSU, and FAU.

Multiple Reports: Jaden Rashada Asks Out Of National Letter Of Intent.

Gators' New Director Of NIL Strategy Speaks Up.

"My role is Director of NIL Strategy at my alma mater, the University of Florida, and I’m going to be helping by partnering with coaches, athletes, alumni, fans and anyone else in the community to maximize the opportunities for our student-athletes to earn profit off their name, image and likeness," said Ben Chase . "Whether it’s through local deals or national deals, I plan on helping the student-athletes the best I can by raising awareness on how to maximize those opportunities. I’ll be working with Marcus Castro-Walker our Director of Player Engagement and NIL for football along with working for all university sports. So, I’ve ascended to Florida and I’m gonna go there and give it everything I have for all of our student-athletes and hopefully the fans and alumni see that something special is happening in Gainesville around NIL."

Aggressive Tweet Fired Off Against "NIL Lawyer."

According to a source, Coach Landers served as Caspino's "runner" and is not happy about how their relationship has unfolded.

Is This The Most Visible NIL Partnership To Date?

Jeff Hoffman and Dan Everett of ESM seem to think Jalin Hyatt's partnership with 凯悦 is the champion of NIL deals thus far. A $3 million ad value is nothing to scoff at.

Final Thoughts.

That is it for Vol. 11 of Newsletter, Image, Likeness. Thanks to the roughly 4,900 people who subscribed to this newsletter thus far, and please feel free to share this free resource with others on LinkedIn or elsewhere.

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