Newsletter, Image, Likeness Vol. 64: Beware Of One-Sided NIL Collective Contracts

The Weekly Longer NIL Thought.

I have drafted many NIL collective contracts. Similarly, I have reviewed countless contracts, created by collectives, on behalf of the athletes who receive them. Sometimes, others representing athletes as legal counsel or in an agent capacity review a contract and feel compelled to send it to me.

That happened a few days ago and I figured, since I have you as my attentive audience, I would share what I observed.

This collective put a contract in front of an athlete that indicates the maximum compensation amount is $75,000 and that it is to be paid over a term of 11 months. That is unless it is sooner terminated in accordance with the agreement. More on that in a few.

In exchange for the compensation, the athlete is to provide various content deliverables, memorabilia deliverables, and event deliverables, which is fair and necessary given the NCAA's requirement that NIL deals contain an element of quid pro quo.

At the collective's direction, the athlete is to maintain a prominent link to the collective's Instagram account in the bio section of the athlete's official Instagram account, post up to 2 X (f/k/a Twitter) or Instagram stories of content approved by the collective, post up to 2 Instagram in-feed or reels of content approved by the collective, and actively promote/endorse the collective throughout the term.

All of that seems pretty fair, although I don't love the open-ended nature of the last term and, as I'm prone to say, ambiguity breeds disputes. Thus, I would prefer more specificity as to what it means to actively promote/endorse the collective throughout the term.

The athlete is required to sign up to 300 general memorabilia items such as photographs and helmets that are provided by the collective to the player and attend up to 3 in-person events at the collective's direction and request as well as 3 events by virtual appearance during the term. Honestly, the deliverables seem really fair, particularly as compared to terms I have recently seen pushed by other collectives.

I do not love that the athlete is required to bear all costs associated with travel to and from any venue associated with an event, and that language is, for some reason, in all caps and bolded. But it's not a deal breaker in my book.

However, there are some major red flags.

First, compensation isn't paid upfront or on a regular schedule. Instead, it's paid out upon completion of the aforesaid deliverables. While I understand that the NCAA prefers that no compensation be paid until services are rendered, that's not how most of these deals are structured. Furthermore, when all of the power is in the hands of the collective to provide content to publish and to schedule in-person and virtual events, the collective can delay as much as it wants, holding back monies that the athlete was counting on receiving. A whopping $15,000 of the total $75,000 isn't to be paid to the athlete until completion of all services allowed for under the agreement.

But it gets worse.

The contract includes, in all caps and bold, that "ATHLETE ACKNOWLEDGES AND AGREES THAT SOME OR ALL OF THE SERVICES MAY NOT BE REQUESTED OR REQUIRED BY [REDACTED] AND AS A RESULT THE COMPENSATION PAID BY [REDACTED] TO ATHLETE HEREUNDER MAY BE LESS THAN THE MAXIMUM COMPENSATION AMOUNT. THE MAXIMUM COMPENSATION AMOUNT IS NOT A GUARANTEE OF THE TOTAL AMOUNT OF COMPENSATION PAYABLE HEREUNDER. ALL REQUESTS OF ATHLETE FOR SERVICES ARE AT [REDACTED]’S SOLE AND ABSOLUTE DISCRETION."

Basically, there's no guarantee that the athlete will receive what he thinks he is entitled to by signing the agreement.

It gets even worse.

The collective can terminate the agreement for any reason, or no reason, by providing the athlete with at least 10 days' advance notice.

Thus, the athlete could sign this agreement, commit to the school, and the collective can either choose to terminate the agreement at any time, leaving the athlete with no recourse, or just not ask the athlete to perform services, also leaving the athlete with the rug pulled from under his feet.

I'm hopeful that the athlete who received this contract did not execute it and I'm concerned that many other athletes have signed it without fully understanding the red flags contained throughout.

I write this with the hope that athletes across the country will learn the importance of having reputable legal counsel advise them before agreeing to these types of one-sided, unconscionable agreements. If not, we are going to see quite a few athletes vocalize their disgust with the "system" over the next few years.

College Coaches And Staffers Aren't Thrilled With The Transfer Portal.

Jesse Simonton at On3 has a long read based on discussions held at the annual AFCA Convention in Nashville earlier in January.

This stuck out to me: "Coaches complained about the difficulty of managing a roster when transfers have nothing binding them to a school until they actually enroll. A national letter of intent (NLI) is being considered for transfers, but just like with the best high school prospects, the top transfers would have little incentive to sign such a document."

Later in the article: "Coaches and staffers were unsure which model was best — from outright revenue-sharing to granting players employee status either with the school or conference —?and there are factors like Title IX, a collective bargaining agreement and antitrust that cannot be just hand-waved away, but coaches believe contracts would alleviate many of the problems around the portal and NIL.?Just like in the NFL, a player’s roster value would dictate the type (and length) of contract a player could sign."

College football players could potentially sign multi-year contracts that contain similar style buyout clauses to what we see with coaching contracts. But we aren't there yet.

C.J. Stroud Donates Between $50k-$100k To Ohio State Collective.

The donation was made by Stroud to THE Foundation.

If we see more NFL players give to collectives, then that should silence a lot of talk about the current system being economically unsustainable.

Tampa Bay Times Breaks Story That Florida Gators Football Is Under NCAA Investigation.

Matt Baker's story indicates that the investigation started at least as early as June 9, 2023 when the NCAA sent University of Florida President Ben Sasse a notice of inquiry.

The Athletic reported that the NCAA inquired about the role of Florida staff member Marcus Castro-Walker and booster Hugh Hathcock and that the investigation is related to Jaden Rashada's recruitment.

Never Heard Of Sweetkiwi But It Signed Master P's Son To A Deal Worth Up To $1.4 Million?

It made me say uhh. But good for Mercy Miller, who signed a deal with the dessert company.

Clemson's Baseball Coach Is Begging For Money.

“It is mission critical for our success, for our fans, donors and people who love Clemson and support the Clemson student-athletes,” Erik Bakich said in an interview with The Clemson Insider. “I think it is just having an understanding of the global landscape of college athletics now and how it has shifted.

“The cost of doing business in player acquisition, recruiting and transfer portal, it has changed, especially for an equivalency sport like baseball, soccer or softball or any sport that does not have full scholarships.

“It is even more critical because getting a good player with a combination of a scholarship plus NIL, it is just the way it is now and it is just the way the landscape has changed. What has not changed is the total amount of the scholarship which is still allocated from the NCAA. The landscape has changed, but our budget is still the same when it comes to what we have.

“NIL can be this incredible thing to bridge the gap for those out-of-pocket-cost to pay tuition, to pay our housing and to pay the cost of attendance to come to Clemson. We are recruiting at least a fifty-fifty blend of in-state and out of state (players), which means we are going to need to raise over a million dollars every year if we want to get to that point where a lot of teams have and that is to just pay the cost of attendance." (Emphasis added).

Will Nevada and UNLV Survive This New NIL World?

Jacob Solis of The Nevada Independent asks that question in his story .

Nevada Athletic Director Stephanie Rempe told The Nevada Independent that the spirit of NIL was “wonderful” — but that the collectives have “gotten out of control.”?

“It's the Wild Wild West,” Rempe said. “And those collectives are going and recruiting players and getting people to go into the transfer [portal] and all those things that aren't supposed to be happening — that are happening — is really hard.”

Notable Comment From UCF Collective.

SJ Tuohy , executive director of The Kingdom NIL, said to Matt Murschel , "Our NIL contracts are definitely strategically placed where it would be disadvantageous for the player to not play in the bowl game."

Overall, the article makes it appear that The Kingdom NIL is making major strides to keep UCF competitive in the Big 12.

Minnesota's Collective Is Up Roughly 8X Year-Over-Year.

Derek Burns , co-founder of Dinkytown Athletes, says that the collective is up 8x or somewhere in that neighborhood from last year, which was also a decent year. It has helped provide support to retain some key athletes as opposed to having them transfer out of Minnesota.

Final Thoughts.

That is it for Vol. 64 of Newsletter, Image, Likeness. Thanks to the more than 8,075 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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