Late last week Sportico reported (subscription) that America Top Team’s Name, Image and Likeness (NIL) deal with the University of Miami Hurricanes football team would include the ability to use the content of the Canes’ players in perpetuity.
Taking advantage of the new rules allowing for college athletes to profit on their NIL’s, ATT offered all 90 scholarship football players $6,000 per year (or $500 per month) NIL deals. The investment by ATT would be $540,000 and this was celebrated as the third string quarterback could take advantage of the new rules the same way a star player could.
However, within the structure of the deal is the proviso that content created with the athlete will be owned by ATT in perpetuity. This would mean long after a player graduates and leaves the university, ATT would own the content it made with the individual and feasibly could use it later on if that individual becomes a star in the pros.
While the deal may still benefit a player that may never make it to the pros, a potential star athlete might discover that ATT could still benefit off of the prior relationship.
For instance, if Michael Jordan signed a deal while at the University of North Carolina and received $6,000 for the use of his likeness that would be fine. But, once he became Chicago Bulls Michael Jordan and one of the greatest of all time the use of his likeness would skyrocket to maybe $6 million for the use of his image to advertise a product. Yet, the deal he made in college would still benefit.
This is the concern with some of the college athletes at a time of NIL. For those that may become bigger stars in the future, the balance of portfolio and branding is something they must consider.
Think about a scenario that if they do a deal with a company that contracts to own the rights forever and that company goes bankrupt and another entity purchases the rights, you may have a third party own the rights to your NIL. Moreover, if the company does something of moral turpitude, there may not be a way of extracting the use of your image due to the fact the contract was signed while in college.
In defense of ATT, it is making a major investment into an unknown commodity (college players), the most of which will not go on to the pros. But, in the case of a star rising up, they will have been on the ground floor of a major star and can align themselves with that individual.
Payout Perspective:
While the contract is not untoward or wrong, it does provide a cautionary tale that not every deal is in favor of the athlete. In fact, contracts are usually in favor of the company that drafted it so we see here that the ATT NIL deal does benefit itself if a fighter were to make it big. Certainly, contracts could be drafted to ensure that NIL rights are severed after the term of the contract but the bargaining leverage would depend on the individual and type of deal.
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