College-wide and team-specific NIL deals: Considerations for colleges and universities to avoid unwanted consequences

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[co-author: Kasey Nielsen]

Since the name, image and likeness (NIL) landscape dramatically shifted in collegiate athletics on July 1, 2021, we’ve seen no shortage of high-profile deals between companies and student-athletes. However, in addition to these often headline-catching deals, there has been considerable growth in both college-wide and team-specific deals. While these broader deals continue to evolve, and will hopefully prove beneficial to all involved, they are representative of how quickly the NIL landscape is shifting and underscore why institutions must continue to develop thorough NIL policies, apply them consistently and, in the case of athletic staff, boosters and student-athletes, provide training on NIL policies to help stave off compliance headaches.

As it sounds, college-wide deals are those in which an institution enters into a collective licensing agreement with a company or brand that is available to most every varsity student athlete. The purpose, or benefit, of such deals is that each student-athlete can elect to participate, regardless of team or sport. This, of course, may be a particularly attractive way to highlight non-traditional athletic programs on campus. For instance, while The Ohio State University is well known for its powerhouse football team, its agreement with The Brandr Group now allows student-athletes on all 36 of its varsity sports programs to profit from their NIL. Practically speaking, this allows a student-athlete who opts-in to profit from their NIL in conjunction with Ohio State trademarks and its official licensees (think names on jerseys in the bookstore).1

Similarly, team-specific deals are those in which a company or brand makes a general offer to a specific team of an institution such that any student-athlete on that team can elect to participate by signing a NIL deal directly with the company or brand. Georgia Tech’s agreement with TiVo, in which any member of the Georgia Tech football team could elect to promote TiVo in exchange for payment, a streaming subscription and gear, is but one example.2

Beyond deals through a licensing agreement and team-specific deals, there is at least one prominent example of a gender-specific NIL deal. The NHL’s Florida Panthers offered all female student-athletes (save for international student-athletes, which is an issue for a different day) the opportunity to enter into an NIL deal with the team.3

What’s driving the popularity of companies and brands offering the same college-wide or team-specific group deals instead of targeted deals to a specific student-athlete? In short, it’s too early to tell. Perhaps businesses are subscribing to the mantra that “there is no such thing as bad publicity.” Or, it might simply be that NIL is new to businesses, too, and there is a dearth of research to lean on in order to gauge where the return-on-investment may be best. This latter point, of course, factors mightily into how the fair market value for these deals – collective or individual – will develop.

These larger deals may become particularly tricky for institutions to navigate. Recall that whether mandated by state legislation or through recognized best practices, institutions are generally prohibited from being involved in the specifics of their student-athletes’ NIL activities, and for a variety of good reason: too much institutional involvement can lead to claims for contractual non-performance, as well as campus compliance, Title IX and a host of employment-related issues.

To avoid these issues, which will undoubtedly arise in the form of compliance headaches and lawsuits, institutions need to be careful with (1) contract language regarding disputes on non-performance between the company and individual student-athletes; (2) deals involving boosters; and (3) the fine line between recruitment and coach-involvement (i.e., improper institutional involvement). Clear policy language and training of employees and student-athletes are the best ways to get in front of these issues.

When reviewing an NIL agreement for conflict of interest between a company and a student-athlete, first ensure that review comports with the limits of your applicable state law or order. Keeping the review limited helps safeguard the college or university from becoming entangled in any potential future disputes between the company and a student-athlete. Second, institutions would do well to ensure that boosters, particularly those already involved in the NIL space, are trained in accordance with institution policy. Deals involving boosters may lend more to the idea of institutional involvement than is actually occurring, which may cause more headache.

Remember, the distinction between traditional donations given to the athletic department for the benefit of student-athletes and businesses doing individual NIL deals with student-athletes is important. The latter should have very little institutional involvement – nothing beyond the general education about NIL activities. The former is entirely done through the athletic department, likely through an external operations and fundraising team. Although both transactions are assisting student-athletes either directly or indirectly, the processes are not the same.

Third, and similar to the caution surrounding booster involvement, deals that offer the same NIL deal to many student-athletes may also lend to the idea of coaches getting impermissibly involved. There is no doubt that an institution’s NIL environment is going to play a role in where recruits take their talents. However, coaches—defined broadly—must know where the boundaries are with respect to NIL.

All of this is to say: college-wide and team-specific deals are here and will likely continue to pop-up on campuses. It bears repeating, institutions can and should proactively address the issues that can arise with college-wide and team-specific deals with thorough NIL policies, consistent application of those policies and policy trainings for staff, boosters and student-athletes.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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