In May 2022, Gervon Dexter signed a name, image and likeness (NIL) deal with Big League Advance Fund (BLA or the Fund). Under the terms of the agreement, the Fund agreed to pay Dexter a one-time fee of $436,485 in exchange for the rights to his NIL during his college and professional careers. However, the agreement also required Dexter to pay the Fund 15 percent of his pretax National Football League earnings for 25 years, an unusual term that extended well beyond Dexter’s postsecondary career.[1] At the 2023 NFL draft, Dexter was picked up in the second round, signing a rookie contract with the Chicago Bears worth almost $7 million. The terms of his agreement with BLA dictate that he would owe the Fund more than $1 million.

On Sept. 1, Dexter filed suit in federal court in the Northern District of Florida, claiming the agreement was void for violating Florida’s NIL statute in effect at the time he signed his agreement.[2] Crucially, the then-effective NIL law specifically stated: “The duration of a contract for representation of an intercollegiate athlete or compensation for the use of an intercollegiate athlete’s name, image or likeness may not extend beyond her or his participation in an athletic program at a postsecondary educational institution.”[3] With state legislators decrying the agreement as “nothing more than a predatory loan,” the outcome of this case will likely test and affect state and federal legislation regarding NIL as well as the protections put in place for student-athletes.

In recent years, NIL deals have grown in their complexity. Since the Supreme Court’s decision in NCAA v. Alston,[4] which held that the NCAA violated antitrust laws by restricting compensation to athletes, student-athletes have sought to profit from the opportunities NIL deals can provide. Indeed, NIL opportunities have provided a boon to women athletes who have been able to utilize their NIL to bring more awareness to their sports and sports programs.[5] In general, the deals themselves started out simply: athletes getting to work directly with potential advertisers.[6] However, increased involvement of entities like BLA and “collectives” has complicated these once-simple deals. In comparison to BLA, which has held itself out as an “investment firm” that “pays athletes for their athletic performance”,[7] collectives are often business entities that supporters of a school’s athletic team may form in order to pool revenue to fund NIL opportunities. The existence and participation of these business entities, whether run by independent investors or passionate university supporters, raise myriad legal questions regarding labor and tax, as well as general questions of fairness between sports programs.

Adding to the confusion is a patchwork of league and university policies and federal and state legislation.[8] Building out these deals without running afoul of any rules can pose challenges for both athletes and the advertisers hoping to work with them. Likewise, the many collectives that wish to work with student-athletes need to be apprised of the changing rules landscape across states and universities in order to be in compliance.[9] Just last week, the NCAA announced four new proposals regarding NIL deals;[10] however, some states (including New York[11]) have moved through their legislation to curb the NCAA’s authority over these deals.

Critically, student-athletes interested in engaging in these kinds of transactions should make sure they understand not only the agreements they are signing but also which laws govern them. Florida changed its NIL legislation in early 2023, removing the protections on which Dexter relies in seeking to void his agreement with BLA.[12] Policies and legislation seeking to govern these collectives will rapidly change as student-athletes seek guidance on how to capitalize on their NIL. BakerHostetler’s interdisciplinary approach to NIL deals provides athletes, advertisers and collectives with the opportunity to fully understand their deals while providing the necessary legal protections. To stay updated on all things NIL and sports industry, subscribe to the Sports Industry team’s blog or sign up for our mailing list.

[1] By way of comparison, agents’ fees in the NFL are typically capped at around 3 percent. See Habib Timileyin, How Much Do NFL Agents Make? All You Need To Know About Player Representation, Sportskeeda (June 24, 2023 12:54 GMT)https://www.sportskeeda.com/nfl/what-percentage-nfl-agents-take-players-all-need-know-player-representatives-league.

[2] Dexter v. Big League Advance Fund II LP, 23-cv-00228 (N.D. Fl. Sept. 1, 2023).

[3] 2023 Fla. Laws 28, available at http://laws.flrules.org/2020/28.

[4] 594 U.S. ___ (2021).

[5] Chase Garrett, The Role of NIL in Empowering Women In College Sports, Icon Source ( last visited Oct. 3, 2023) https://iconsource.com/blog/empowering-women-in-college-sports/ (“Female athletes have been able to use their NIL rights to secure endorsement deals and sponsorships that were previously unavailable to them. This has helped to increase their visibility and create new opportunities for female athletes to earn money through their athletic abilities.”).

[6] Thomas Spigolon, Lawyers See Growing Demand In Athlete NIL Deals, Even As Some Agreements Remain ‘Pretty Small’, ALM Daily Report (Sept. 19, 2023 1:55 PM) https://www.law.com/dailyreportonline/2023/09/19/lawyers-see-growing-demand-in-athletes-nil-deals-even-as-some-agreements-remain-pretty-small/.

[7] Michael McCann & Eben Novy-Williams, NFLer’s Suit Draws Big League Advance Into NIL Pay Vortex, Yahoo Sports (Sept. 7, 2023) https://sports.yahoo.com/nfler-suit-draws-big-league-120000610.html

[8] Business of College Sports (last visited Oct. 3, 2023) https://businessofcollegesports.com/tracker-name-image-and-likeness-legislation-by-state/.

[9] The NCAA still prohibits “boosters” (such as collectives funded by passionate school alumni) from engaging in recruiting activities or conversations on behalf of the school. See NCAA, Role of Boosters (last visited Oct. 3, 2023) https://www.ncaa.org/sports/2013/11/27/role-of-boosters.aspx

[10] The four new proposals include: (1) Voluntary registration of service providers; (2) required disclosure of NIL deals over a certain threshold; (3) standardized contract terms; and (4) the creation of educational resources for student-athletes. See DI Council Introduces Proposals to Boost Student-Athlete NIL Protections, NCAA (Oct. 3, 2023 6:43 PM) https://www.ncaa.org/news/2023/10/3/media-center-di-council-introduces-proposals-to-boost-student-athlete-nil-protections.aspx

[11] N.Y. Educ. Bill § 6438-a; see also Mike McCallister, How New York State’s New NIL Law Impacts Syracuse, All Syracuse (July 6, 2023 6:28 AM) https://www.si.com/college/syracuse/recruiting/how-new-york-states-new-nil-law-impacts-syracuse

[12] HB 7B (Feb. 17, 2023), available at https://www.flsenate.gov/Session/Bill/2023B/7B/BillText/er/PDF.

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