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Guidance For Athletes To Avoid Pitfalls After 1 Week Of NIL

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Cavinder Twins
Haley and Hanna Cavinder (the Cavinder Twins) have set the example of how college athletes should be treating their new NIL rights.

College athletes have now had more than a full week to begin benefitting from the commercialization of their names, images, and likenesses (NIL). While some anticipated chaos and anarchy, providing college athletes with these rights that are afforded to all other individuals in the United States has proven to not cause an immediate end to college sports as we know it. The product on the field and on the court will not be negatively altered and, if anything, learning more about individual players will likely manufacture more excitement for fans interested in college athletics.

But the first week has also provided important lessons, created some concern, and made it evident that clarity is needed for many groups of individuals when it comes to NIL rights.

Beware of bad information from untrustworthy sources.

Take for instance this tweet by “QB Coach/Mentor/Sirus [sic] Radio/KTAR Contributor/K1 Podcast” Rudy Carpenter, who was blessed with a blue checkmark by Twitter.

I have no problem with people identifying important things for athletes and families to understand with regard to NIL rights. However, people like Rudy Carpenter, who spread false statements of facts and receive over 100 retweets, cause confusion and potential harm to athletes and their supporters. At a minimum, Carpenter’s first and third bullet points are wrong. Schools are not prohibited from discussing NIL activity on the recruiting trail and athletes will not lose their scholarships if their NIL compensation exceeds a certain threshold of money.

I challenged Carpenter to provide the source for his incorrect information and he refused to cite his support. Even scarier is that I received numerous emails and calls throughout the day from worried families of athletes asking about the accuracy of Carpenter’s information, which he ultimately admitted he created out of thin air. When I advised Carpenter that state NIL laws do not permit NIL to have a negative effect on scholarships, he asked me to fill him in on the rules and indicated that he was not aware of any states beyond Florida, Texas, and Ohio having any NIL laws that control this subject.

More than half of the U.S. has passed a NIL law.

Here is the relevant text from the State of Florida’s NIL law, which I helped draft in 2019: “Earning such [NIL] compensation may not affect the intercollegiate athlete’s grant-in-aid or athletic eligibility.” However, Carpenter and others who wish to spread false information would like you to believe otherwise. Make sure you get your information from knowledgeable sources.

High school athletes should be cautious of signing NIL deals.

It is crystal clear that college athletes now have the capacity to sign NIL deals, with certain restrictions created by the NCAA, individual state NIL laws, and respective school NIL policies. However, the NCAA has been somewhat silent when it comes to high school athletes. In essence, the NCAA stated on June 30 that it was not going to expressly prohibit high school athletes from exploiting their NIL, but that high schoolers should closely monitor their state laws and high school association bylaws to make a determination as to whether they were putting themselves at risk of violating the law and/or losing their eligibility to participate in athletic competition. Furthermore, the NCAA refused to identify whether high school athletes are permitted to sign with agents, whereas it is clear that college athletes can now be represented by agents, strictly to procure and negotiate marketing opportunities and not for their professional pursuits.

I have seen many high school athletes tell brands that they should reach out (or DM them) to discuss NIL deals. Unfortunately, many of these athletes could be taking a very high risk by entering into these types of arrangements.

For instance, Texas’ NIL law expressly prohibits individuals, corporate entities, and other organizations from entering into any arrangements with prospective college athletes relating to their names, images, and likenesses prior to their enrollment in an institution of higher education. Furthermore, many high school associations have rules that restrict athletes from engaging in this type of activity.

The Georgia High School Association (GHSA) bylaws reveal that high school athletes in the state forfeit their amateur status in a sport by capitalizing on their athletic fame by receiving money or gifts with monetary value except for college scholarships. An important question revolves around what constitutes “capitalizing on athletic fame.” Is an athlete who has a massive social media following and promotes a brand without any reference to athletic prowess excluded from this rule? High school associations have been largely silent in clarifying their rules since July 1; however, the National Federation of State High School Associations executive director has stated that he suggests high school students engaging in NIL activity would be ineligible through their own state high school associations.

Do not agree to every offer that comes your way.

I am witnessing far too many college athletes agreeing to endorse products, services, and brands for little-to-no consideration. First of all, there needs to be quid pro quo attached to every deal. The NCAA has required the element of consideration in every agreement and that athletes are providing some deliverable in exchange for a benefit in return for the deal to comply with the very basic rules that the Association has set forth, which also includes the requirements that no deal be based on an athlete’s attendance or continued attendance at a university, as well as no compensation being tied to athletic performance (i.e. no bonuses based on athletic achievements).

Athletes should only be executing deals with brands that sell products or services that they enjoy and feel comfortable promoting. Authenticity in these types of relationships is of paramount importance. You will lose credibility as an endorser if there is an apparent lack of authenticity, which a consumer can easily discern. Do not sell yourself short, refrain from jumping at every offer, and try not to denigrate your own brand and reputation, which follows you for the rest of your life.

If a brand is offering you $20 to post content on your Instagram, then you should take a step back and ask whether it is worth it. What is your long-term strategy? It will be hard to command larger deals when you are seen as someone who is cheap and unwilling to scrutinize opportunities. You also do not want to oversaturate yourself and distance yourself from fans. Engagement and authenticity are of extreme importance, and many of the promotions I have seen in the first week of NIL seem like bad decisions that may be regretted in the future.

Make sure that intellectual property rights are being cleared.

Most college athletes do not have an appreciation for intellectual property rights and what constitutes a trademark or copyright. However, knowledge of these terms and the significance of infringement are vital for athletes to avoid putting themselves at risk of legal exposure and possible violations of school policies.

I have seen numerous athletes posting content on social media, in association with NIL commercial activity, that does not appear to be cleared. If you are an athlete and you do not know the source of a photograph, then do not use it. If you are aware of the source, then make sure the rights to use it in a commercial manner have been cleared with the holder of the copyright. Otherwise, you are putting yourself at risk of being named as a defendant in a case concerning copyright infringement.

Furthermore, be cognizant of whether your rights to use of content are only for non-commercial use or that it extends to commercial use as well. College athletes, in the world of NIL, are now utilizing their social media accounts for commercial gain and thus the content posted on those accounts is likely to be viewed as a form of commercial speech. Only having non-commercial rights to use content may not be sufficient for use with activity on those platforms. This can get confusing, which is why it is important to have legal counsel with a background in intellectual property to assist with NIL activity. Furthermore, the last thing any athlete should be doing is grabbing content from Google Images and repurposing it for use with NIL.

Additionally, athletes need to be aware of what they are representing and warranting to third parties when it comes to intellectual property rights. Setting aside the debate over whether college athletes are permitted to endorse Barstool Athletics due to Barstool’s association with a sportsbook (some state NIL laws and school policies expressly prohibit athletes from endorsing sports betting brands), I am concerned by the language that Barstool is sending to athletes to become a part of its program, which seems to be offering athletes merchandise and social media exposure in exchange for becoming a “Barstool Athlete.” Barstool’s Dave Portnoy has even admitted multiple times that Barstool has “no clue what we are doing” in this regard and that “no thought was put into it.”

The disclaimer that Barstool is sending college athletes says, “Lastly, when you send us a picture of yourself, you are giving Barstool the right to use and post it on any Barstool platform or channel and confirming that you have the rights required to allow us to use it (so that our use does not violate anyone’s rights).” That is quite convenient for Barstool, but very concerning for college athletes who sign up for the program and likely have no appreciation for whether the pictures they are delivering have rights cleared with the copyright holder and/or whether their school consents to the use of their names and logos in the pictures if, for instance, the photographs display the athletes in uniform. If you are an athlete, why would you put yourself at risk of having issues with your school and possibly being sued by the copyright holder, for the right to display “Barstool Athlete” on your Instagram bio?

Terms of NIL need to be reviewed irrespective of the size of the deal.

This is somewhat related to my offered guidance that college athletes should not accept every deal that comes their way. However, here, I am suggesting that athletes need to truly understand what is being presented to them by inspecting every word and punctuation mark in a proposal, as binding contracts are typically upheld by courts of law when challenged. My fear is that the smaller deals are not being reviewed by counsel and my personal opinion is that if an athlete does not understand and appreciate the meaning of the terms of those deals, it is better for the athlete to pass on the “opportunity” that to offer rights that should not be granted.

Take for instance what I understand to be very small monetary offers provided by a gaming company called YOKE to a vast number of athletes.

My impression is that most of the athletes who scored some quick, easy cash had never even heard of YOKE prior to July 1. Yet, they very easily agreed to small cash consideration in exchange for social media promotion as well as granting YOKE the worldwide, perpetual, transferable, sublicensable, royalty-free, and irrevocable right to store, broadcast, modify or make derivative works of, make copies of, distribute, publicly perform and publicly display their likeness, voice, image, etc. in any and all media and format, whether now known or created in the future. All for a few dollars? I am very concerned that athletes are offering up these rights not only to YOKE, but to numerous companies, without any appreciation for the gravity of what they are delivering to the third party.

Clarity is needed for international athletes hoping to score with NIL.

Finally, how is it equitable that all college athletes can now take advantage of their NIL except for foreign students who are participating in intercollegiate athletics? The guidance that they have received, much like most high school athletes, is to hold tight and wait for some clarity on the subject.

Many school NIL policies currently prevent foreign students from participating in NIL activities due to the limitations on forms of employment that are traditionally imposed on these athletes’ visas. The Department of Homeland Security has not provided guidance on whether NIL deals serve as “employment,” and thus the conservative approach is to wait and see whether clarity of existing law will be provided or if the law will be revamped to specifically allow for these foreign students to be on an equal playing field as all other college athletes when it comes to NIL.

Written by Darren Heitner

Darren Heitner is the founder of Heitner Legal. He is the author of How to Play the Game: What Every Sports Attorney Needs to Know, published by the American Bar Association, and is an adjunct professor at the University of Florida Levin College of Law. You can reach him by email at heitner@gmail.com and follow him on Twitter at @DarrenHeitner.

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