Attorney Writes About ‘How to Effectively Draft an NIL Contract’
For nearly two years, college athletes, sports agents, and sponsors have sought to create name, image, and likeness (NIL) contracts that comply with NCAA rules, state laws, university policies, and sponsorship and advertising laws—all while attempting to draft contracts that are effective and operate to meet the needs of the particular deal. Much like other types of contracts (and perhaps more), NIL sponsorship agreements include risk and the potential for dispute. With a handful of NIL contract disputes coming to light in recent weeks, it is important to emphasize how athletes, agents, and sponsors should effectively draft NIL sponsorship agreements to provide optimal certainty and protection.
At a minimum, NIL contracts should be written and signed, and include the following:
Who is the contract between? The contract preamble should state both the name of the athlete and the sponsor or collective they are partnering with.
When is the contract being signed? Note that the agreement date, the effective date, the contract term, and the dates that certain deliverables need to be completed may all be different. For example, you can agree to the contract on Monday, with the contract going into effect on Tuesday, the athlete performing their obligations on Wednesday, and the sponsor paying the athlete on Thursday. With more specificity of dates, the more certainty the contract will have.
The Agreement Scope
What are the contract specifics? Be sure to specify all the relevant deliverables. As with the key dates, more specificity will result in more clarity. If the agreement includes sponsored social media posts, the contract should detail the platform to be used, the type of post (story, reel, etc.), and the graphics or media that will be provided by the company. Moreover, the contract should specify how long the post must “stay up” on the platform.
How much is the sponsor paying the athlete for their endorsement? It is important to outline the specifics of how and when compensation will be paid. If the payment is a lump sum or to be paid in installments, that should be specified. The method of payment (check, e-check, Venmo…) should also be specified. Note that ongoing sponsorship agreements will typically have more complex financial provisions than agreements for a single sponsored post.
Any Relevant IP Provisions
NIL contracts can implicate a plethora of intellectual property, including images, marks, or logos belonging to the athlete, the sponsor, the university, conference, or NCAA, and potentially other third parties, such as photographers. Intellectual property provisions can increase contract complexity, but it is important to ask, “who owns what?” and “are both parties allowed to use this?” Additionally, the parties should be sure to understand and outline any long-term intellectual property rights or licenses contemplated by the agreement.
These basic contract provisions should generally cover more straightforward NIL contracts. Well-drafted and clear contracts can substantially reduce the risk of contract disputes and litigation. In addition to high-quality contract drafting and effective contract terms, all NIL deals should be checked for legal and rules compliance.
This blog originally appeared at the firm’s website here: https://frieserlegal.com/how-to-effectively-draft-an-nil-contract/