The Biggest NIL Pitfalls for College Athletes
College athletes must navigate a complex terrain of rules and regulations to ensure that their NIL rights are protected.
There are several key issues that college athletes need to be aware of when negotiating and looking to secure brand deals.
Whether you’re a starter at a power 5 school or someone just coming out of high school, the dollars may be different, but the issues are the same.
Here are our top 5:
Top 5 Issues for College Athletes When Negotiating Brand Deals
1. Endorsement Restrictions
University Policies: Many universities have strict policies in place that limit the types of endorsement deals college athletes can engage in. For instance, most institutions are going to prohibit partnerships with alcohol or gambling companies.
It's crucial for athletes to familiarize themselves with their university's policies and understand any restrictions that may impact their brand deals.
On top of that, most universities are going to have rules against deals that interfere with a corporate university sponsor contract. That doesn’t mean you’re NIL deal cant be a competitor of that corporate sponsor, but there may be some pushback that has to be navigated.
For example, if your university rides with Nike and every player is expected to wear Nike jerseys and cleats, you can’t go out a land a deal with Adidas to be the only guy on the field wearing different cleats. Not going to fly.
Consequences of Violation: Violating university policies can lead to serious repercussions, including loss of eligibility to compete.
Athletes should be aware that their brand deals should align with these policies to protect their eligibility and collegiate career. It’s almost always going to be better to ask for permission over forgiveness if there are any questions.
2. Loss of Eligibility
NCAA Regulations: The NCAA has stringent rules governing compensation and amateur status. While those rules are currently shifting, just like conferences are realigning, it’s important to stay up to date on the latest regulations. Just like university policies, violating NCAA rules can potentially jeopardize an athlete's eligibility.
Balancing Act: Negotiating brand deals requires a delicate balance between seizing lucrative opportunities and safeguarding one's ability to continue playing at the collegiate level.
Between class, workouts, practice, and actually completing deal obligations that balance can feel like walking a tight rope. College athletes should consult with knowledgeable advisors, such as agents or attorneys, to make informed decisions that don't jeopardize their eligibility.
3. Exploitation Concerns
Beware of Exploitative Deals: Not all brand deals are created equal. Some companies may attempt to take advantage of college athletes, offering one-time payments or subpar compensation.
No one likes a referral link and no one likes a free t-shirt. Do these deals have a place? Sure. Like anything else NIL is going to be a case-by-case basis and every athlete isn’t being handed a truck from their local ford dealership.
Regardless, Athletes should exercise caution and ensure they are not underselling their value or signing contracts that limit their future earning potential.
Seek Professional Guidance: To avoid exploitation, college athletes should work with experienced professionals, including sports agents, attorneys, or financial advisors.
These experts can help evaluate the fairness of brand deals and provide valuable insights to protect the athletes' interests. Most professionals have done this a time or two and should know what to look out for, a plus for anyone navigating the NIL space for the first time.
4. Intellectual Property Rights
Protecting Intellectual Property: College athletes have to safeguard their intellectual property rights. Glazing over the IP terms of a contract (if they even exist) can lead to costly issues down the line.
This includes not only your name, image, and likeness but also any copyrighted material you create, such as images, videos, recordings, or merchandise featuring your likeness. Athletes want to make sure they own as much of their own IP as possible and can control how brands can use their likeness in the future, for how long, and in what manner.
Licensing and Control: Athletes should consider licensing agreements that grant companies the right to use their image and likeness while maintaining control over how it's used.
This ensures that their brand remains consistent with their personal values and image. The last thing you want to do is “give away” your IP rights and then in a year’s time the value of that IP has tripled or more.
5. Fair Market Value
Determining Fair Compensation: Establishing fair market value is crucial for college athletes. Athletes should receive compensation comparable with their popularity, athletic accomplishments, and the potential value they bring to a brand deal.
There are a ton of metrics out there that can help assist in establishing that value but the usual formula is more view and more engagement equals more value. Check out our previous post for more info on that!
Market Research: Conducting market research and comparing compensation offers from multiple companies can help athletes gauge their worth accurately.
Don’t be afraid to talk to your friends and teammates.
A lot of the information and specific deal terms may be confidential but they can help provide a rough estimate of your value. This can also depend on where you are, what position you play, and a number of other factors. In short, don’t settle for less than you deserve.
The Evolving Landscape of NIL Rights
As college athletes navigate the complexities of NIL rights and brand deals, it's essential to recognize that this landscape is continually evolving. New opportunities and challenges will emerge as athletes assert their rights and explore partnerships with various companies. Staying informed and adapting to these changes will be crucial for athletes to maximize their earning potential while maintaining their collegiate eligibility.
Every deal doesn’t have to be a homerun, and it wont be. Going to a baseball reference, base hits win ballgames. Almost every conversation across social media for NIL only talks about the biggest deals out there but there are a ton of untapped opportunities just waiting to be taken. Those deals don’t get talked about, but they add up.
Conclusion
The era of NIL rights has ushered in a new era of empowerment for college athletes. They now have the opportunity to capitalize on their name, image, and likeness, but this privilege comes with responsibilities and potential pitfalls.
Understanding university policies, NCAA regulations, and the nuances of brand deals is essential for college athletes to make informed decisions and protect their future in both athletics and business.
By navigating the intricacies of the NIL landscape with care and diligence, student-athletes can embark on a path to financial security while leaving a lasting impact on the world of college sports.
Jace Williams