As college student-athletes begin marketing themselves in the NIL era, there may be reason for caution as they seek partnerships with some companies.
Earlier this month a number of members of the University of Iowa football team shared a post by Yoke Gaming on their Instagram feeds. Yoke, which says it enables people to play video games with their favorite athletes, promised it would pay college athletes for sharing the post.
Dan Lust, a sports attorney and professor at New York Law School, says there’s reason for players to proceed with caution.
“I would be a little less trustworthy of these non-publicly traded behemoths that you're signing their terms and conditions,” Lust told The Gazette. “We have no idea what's in them. You’re dealing with a company that is off the grid, not enforced by the Securities and Exchange Commission, I would read every word, every comma, every period of any type of deal
Athletes, please resist signing any #NIL contracts without understanding the terms.
— Darren Heitner (@DarrenHeitner) July 6, 2021
Don’t jump at a $20 deal.
If you have questions, ask a lawyer for guidance. You shouldn’t be granting perpetual, royalty-free, irrevocable rights to any company without substantial compensation. pic.twitter.com/ACyFggA4Au
Darren Heitner, a University of Florida professor in sports law and practicing sports, entertainment and IP lawyer, looked into Yoke and found that the company doesn’t actually offer legal contracts with the players.
“My understanding is that YOKE offered a whole variety of athletes roughly $20 in exchange for some sort of endorsement,” Heitner said. “The big thing that stuck out to me when I saw this post on YOKE was extensive rights that the athletes were providing. And not only the extent of those rights but that they were perpetual royalty free and irrevocable. For an athlete, not to be able to revoke that right at any point for the rest of that athlete's life or career, it's a concern, especially if the compensation is around $20.”
Barstool Sports has also gotten into the mix, allowing college athletes to fill out an online application and promising their partnership will eventually be announced by @StoolAthletics. Barstool has also said it will be producing athlete-specific merchandise. Jackson State volleyball player Adelaide Halverson became a Barstool athlete and saw her following explode, which led to her being contacted about multiple partnerships.
Lust said partnerships with companies like Barstool could get athletes in trouble, as some state and school-specific rules do not allow athletes to partner with alcohol, tobacco, cannabis and gambling companies. Penn National, a company that owns and operates casinos and hotels across the country, has a 36-percent stake in Barstool Sports, which also has its own sportsbook.
“I think it’s a very big risk for a company that's maybe offering merchandise, and you know a couple extra followers,” Lust said. “I had people in my replies that were telling me, well, if 100,000 student athletes are trying to sign up with just one company, there's no way the NCAA would possibly remove their eligibility because that would be stripping their entire talent pool of assets.”
The NCAA has not provided any restrictions and has left that entirely up to the states and schools’ compliance departments.
"The schools would have to create some sort of guidance, saying Barstool is a gambling company, so if you signed a deal with them, you might be punished,“ Lust said.
The fact that NIL rules vary from state to state and school to school means athletes need to pay attention to rules put in place by their school or state.
“If you're an athlete in Iowa pay attention to Iowa, listen to what your compliance officials say in the school,” Lust said. “If anyone's getting broad brush strokes, not tying something to a particular school or to a particular state, I wouldn't listen to that.”
