Looking Back at a Busy Summer of NIL Deals

08.17.21

The allowance of student‑athletes to monetize their name, image, and likeness (“NIL”) has shaken the landscape of college sports.  The saga kicked off with the Supreme Court ruling on NCAA v. Alston on June 21, 2021.   The opinion largely discussed the legality of education related benefits.  However, in a concurring opinion, Justice Brett Kavanaugh rendered a scathing opinion of the NCAA’s labor market.  An in depth summary and analysis of NCAA v. Alston can be found here.  Following this decision, along with the passage of NIL legislation in many states, the NCAA formally allowed student‑athletes to monetize their NIL, which took effect on July 1, 2021.

Since July 1, there has been a tidal wave of endorsement deals across the country, with college football student-athletes making most of the headlines.  Notably, Miami quarterback D’Eriq King has led the charge.  Since July 1, King partnered with Florida State quarterback McKenzie Milton to co-found Dreamfield (a company dedicated to marketing student‑athletes to potential sponsors), signed a deal with a national moving and storage company, and joined a team wide endorsement with a regional mixed martial arts gym. 

Additionally, King signed with the National Hockey League’s Florida Panthers, which marked the first time a professional sports franchise has partnered with an American student-athlete.  King will appear at Panthers’ games, work closely with their social media and marketing team, develop co‑branded merchandise, and create a concession menu item at the BB&T Center, the home arena for the Panthers.  It will be interesting to see if other professional sports franchises engage in similar deals.

Furthermore, a growing trend to monitor is high school athletes reclassifying to take advantage of NIL deals.  Quinn Ewers, the number one overall quarterback in the 2022 college class, who is committed to Ohio State, recently reclassified to the 2021 college class.  NIL deals appear to be a huge factor in this decision as Ewers, a Texas native, signed a deal with a Dallas area beverage company immediately upon reclassifying.

In college basketball, Emoni Bates, the number one overall recruit, also reclassified to the 2021 college class.  Some have surmised that his decision also stems from the ability to monetize his NIL.  Bates is not committed to a university to date.  Both Ewers and Bates are widely known prospects despite being in high school, so they are in a unique position to take advantage of their NIL and are likely major exceptions from the vast majority of high school athletes.  However, these two could be a test case for future well renowned high school athletes.

Outside of college football and basketball, student-athletes in less televised sports have effectively monetized their NIL in unique ways.  For example, Livvy Dunne, a gymnast at LSU, is rumored to have signed NIL deals that total around six figures.  Dunne had amassed a large number of followers on TikTok and Instagram, which positioned her to capitalize on the allowance of NIL deals.  Therefore, firms have indicated that social media fame is a key component of marketability, and could have industry leaders reconsidering what sports/athletes are considered “popular.”

Moreover, Barstool Sports also began to introduce endorsements for a variety of different student‑athletes across the country.  This is an intriguing development as Barstool Sports is owned by Penn National Gaming, a gambling entity, and NIL deals with gambling entities are disallowed by many state NIL laws.  Additionally, many states still prohibit sports gambling entirely.  It will be interesting to monitor how the various athletic departments evaluate similar deals.  For example, Louisville University’s athletic department recently disallowed its student athletes to sign deals with Barstool Sports, citing Barstool’s Sport’s violation of Kentucky’s executive order related to NIL and the University of Louisville’s own NIL policy.  Relatedly, Barstool Sports recently announced that they are sponsoring and broadcasting the Arizona Bowl, a college football bowl game, on December 31, 2021.  Therefore, while many state law makers and athletics departments have sought to prohibit their student-athletes from engaging with gambling entities, entities such as Barstool Sports/Penn National Gaming continue to permeate the college sports landscape.


Contacts

Adarsh Annamaneni  |  713.650.2607  |  aannamaneni@winstead.com

Michael Cruciani  |  512.370.2884  |  mcruciani@winstead.com

Mike Perrin  |  713.650.2726  |  mperrin@winstead.com

 

Disclaimer: Content contained within this news alert provides information on general legal issues and is not intended to provide advice on any specific legal matter or factual situation. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional counsel.

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