The Three Things Student Athletes Should Consider for Every NIL Contract

With student athletes now able to profit from their name, image and likeness (NIL), athletes are taking advantage of opportunities to partner with brand sponsors. When entering into contracts, athletes need to review carefully the terms of the agreement to protect their personal brand. Here are three key considerations to keep in mind when considering any contract:

1. Keep the contract terms and duration short.
   Any contract and associated fees remain binding for the full duration of the contract. It is important for student athletes signing an agreement to keep in mind that the fee is not going to change. A fee should be commensurate with an athlete’s experience but every athlete’s experience level and value is going to change over time. Therefore, student athletes should avoid long agreement terms until the full value of your endorsement is known. This is typically further into a professional career and even then, long-term licenses should be considered carefully, as entering into a long-term agreement puts you at risk of having to honor an agreement that does not reflect your current value.

   Keep your contract term short. The duration of the contract should never extend beyond the length of your remaining time participating in the athletic program at your current institution.

2. Narrow the scope of rights.

   It is also important to understand the scope of rights that your contract will cover. When entering a license agreement as an athlete, it’s best to keep the scope of rights as narrow as possible to increase your opportunities for economic benefit.

   Avoid contracts that give the other party the exclusive right to use your NIL in a broadly defined (or vaguely defined) group of products.  And never grant NIL rights for products that the other party does not actually sell.

   For example, when partnering with an energy drink company, you don’t want to grant that company exclusive rights for all drinks. If you narrow the focus, such as NIL exclusivity for energy drinks, it allows you to work with other beverage brands in the industry that are not direct competitors. (Don’t lock yourself out of the soda category by giving exclusive rights to a company that does not sell soda.)

   Avoid licensing agreements that give the brand owner exclusive NIL access in a broad category. By narrowing the scope, athletes can work with multiple brands within the same industry and increase their endorsement opportunities.

3. Limit your time commitment.

   As part of endorsement agreements, it is standard for brands to use athletes in marketing campaigns and ads. This may require time commitments for photoshoots or fittings that are needed. But as part of the contract, athletes may also be asked to do in-person events or a meet and greet. These additional obligations should always be clearly defined, and an appropriate per diem payment agreed to, before signing any agreement to avoid open-ended requests.

   Make sure that all additional conditions are clearly outlined, including payment terns. Protect your time and prioritize your school obligations by requesting that they take place in the off season.

Keeping these tips in mind will help to protect your personal brand. As part of all contract review, it is also important to be in compliance with state and NCAA rules. Different states have their own NIL guidelines so it is important to understand the guidelines based on where the athlete is attending school. Athletes under the age of 18 must also comply with other state laws. Student athletes should always consult with an attorney to make sure that they are compliant with all applicable regulations and guidance, and to set up the best contracts possible for long-term success.