Newsletter, Image, Likeness Vol. 111: New NIL Revenue-Sharing Agreements Deserve Some Scrutiny

The Weekly Longer NIL Thought.

Schools are beginning to send out revenue-sharing agreements. The alleged quid pro quo for these transactions, other than the inherent desire to cause the athletes to participate in the schools' athletic programs, is a NIL license that oft includes sublicense rights and even rights after players' eligibility has expired.

While I have found myriad issues with these contracts, two major items stick out to me.

1. Many of these revenue-sharing agreements between institution and athlete include a provision that the institution's obligations are entirely contingent on the final approval of a pending settlement in the House v. NCAA case, which will not be known until April 2025, at the earliest. As such, as many of these contracts are drafted when originally transmitted to athletes for review, there is no guarantee that the athletes will get paid under the documents they execute. Absent a delineated backup plan, athletes are commonly putting themselves in a more precarious financial position than entering into what I would sometimes call somewhat shaky NIL collective contracts. This is the first glaring reason why athletes should have reputable counsel review these deals.
2. Many of these revenue-sharing deals create a carveout for the institution to unilaterally determine, at any point in time, that the athlete's "NIL value" has decreased, thereby lowering the promised compensation to the player. As such, the initial promise of compensation identified in the contract is largely worthless when considering that the institution has a right to adjust it at its sole discretion. Interestingly, the NCAA has taken a hard position against pay-for-play, yet some of these contracts indicate that the promised money to players can shift downward based on a player seeing reduced playing time. Again, it is vital to push back on this type of clause.

This may give some who have been championing the going-forward portion of the proposed settlement more pause. And just maybe, it gives Judge Wilken yet another reason to reconsider rubberstamping the deal's final approval.

Diego Pavia Proves Once Again That The NCAA Isn't Above The Law.

Diego Pavia has prevailed on his motion for a preliminary injunction to temporarily prevent the NCAA from enforcing a rule that would have otherwise precluded Pavia from participating in intercollegiate athletics as a junior college transfer.

U.S. District Judge William L. Campbell, Jr., focused on an NCAA Bylaw that restricts the duration of a college athlete's eligibility to compete and counts time spent at JUCOs toward the eligibility cap of four seasons within five years (the five-year rule).

Pavia argued that the rule if applied to him, would prevent him from earning over $1 million from NIL deals during the 2025-26 season. He said that his time at a JUCO (New Mexico Military Institute) shouldn't count against the five-year rule. The court had no trouble concluding that the denial of the ability to play sports was irreparable harm and that the lost opportunity to play Division I football for 4 seasons resulted in a loss of opportunity for exposure and building Pavia's personal brand.

So, for now, Pavia will play next season.

The NCAA stated that it is disappointed in the ruling and that "a patchwork of state laws and court opinions make clear that partnering with Congress is essential to provide stability for the future of all college athletes." Back to begging Congress.

But the NCAA's biggest concern should be in the dicta of the ruling. Judge Campbell looked at the cases that the NCAA cited that had been favorable to their position and posited that the precedent was established in a "pre-NIL world." In that world, the NCAA may have been able to argue that certain requirements were "non-commercial in nature." No longer.

In the meantime, it is wise to read the decision as only affecting Pavia. The NCAA has not yet stated whether it will provide all former JUCO players the ability to extend their eligibility in the wake of the opinion. But clarity on that point may be coming soon. In the meantime, I have been hired by a former JUCO player to put pressure on the NCAA and may be filing another action against the NCAA.

Brian Kelly Announces NIL Match Program.

Texas Tech Plans To Allocate Over 90% Of A Projected $20.5 Million Revenue-Sharing Distribution To Football And Men's Basketball.

It will reflect the amount of money that those 2 programs generate for the overall department. Roughly 74% of the overall pie is intended to go to football players.

What about Title IX?

"I've probably learned nothing new related to that," athletics director Kirby Hocutt said, "other than that I believe the way we are strategically approaching revenue-share distribution is consistent to all other power-four universities that I've talked to and for certain those within the Big 12."

State Of Louisiana Will Pay Athletes In Youth Anti-Vaping Campaign.

Rosters Are Expected To Keep On Churning Under A Revenue-Sharing System.

"College FB Rosters are churning," says On3 founder Shannon Terry . "The consensus thought of total Roster Value of $17-$22M for the elites will not keep Roster's from churning -- it may just speed it up. 10-12% of that is going to the QB, up to 15% with two on the Roster. NFL Rosters carry at $200 to $250M annually. College FB Rosters will eventually settle in somewhere around $30-$35M and that is where the churn will slow down and "depth" Value is recognized without transfering."

Alabama AD Says It's Time For The Bama Nation To Fight Back.

House V. NCAA Plaintiff Lawyers Seek Roughly Half A Billion In Fees.

They have petitioned the court for approximately $484 million and then another roughly 1% of the revenue shared with athletes under the settlement going forward, which could be another roughly $200 million!

Interesting Commentary From President Of UGA.

“Right now, it is absolute bedlam occurring across college football,” said Jere Morehead, the president of Georgia.

“We should be definitive that we will go back and unwind these deals that are not legitimate third-party NIL transactions. We should not accept the notion that institutions, coaches or players can agree to anything they want until July 1. These deals, if not legitimate third-party NIL agreements, would be in violation of the settlement we all agreed to going forward.”

That certainly won't lead to more litigation..

Kansas Partners With Walz Tetrick Advertising To Help Connect Athletes With Corporate Partners.

Players Era Takes NIL-Style Tournament To The Women.

At least $1 million in NIL opportunities will be presented to participating women's basketball programs, including South Carolina, UCLA, Duke, and Texas.

Final Thoughts.

That is it for Vol. 111 of Newsletter, Image, Likeness. Thanks to the more than 9,450 people who have 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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