Since the NCAA’s Name, Image, and Likeness (NIL) policy went into effect in July 2021, college athletes have had the opportunity to sign NIL contracts and earn money from sponsorships, endorsements, and other NIL opportunities. Whenever there’s big money there’s big contracts.
However, NIL contracts can be complex, and if athletes aren’t careful, they might sign a bad deal that could impact their financial future or NCAA eligibility.
In this guide, we’ll break down how NIL contracts work, key terms to look for, and red flags to avoid before signing an agreement.
What Is an NIL Contract?
An NIL contract is a legally binding agreement between an athlete and a company, brand, or NIL collective that outlines the terms under which the athlete is compensated for using their name, image, and likeness.
These contracts are often used for:
✔️ Endorsement deals (e.g., promoting a brand on social media)
✔️ Sponsorship agreements (e.g., wearing branded gear at events)
✔️ NIL collective-funded deals (e.g., appearances and community events)
✔️ Merchandising and licensing agreements (e.g., jersey sales, NFTs)
Athletes must understand their contracts before signing to ensure they are fairly compensated and not violating NCAA rules.
Key Elements of an NIL Contract
1. Payment Structure & Compensation
✔️ How much is the athlete getting paid?
✔️ Is it a lump sum, monthly payment, or performance-based bonus?
✔️ Are there any additional perks (e.g., free products, travel expenses)?
Example:
- A basketball player signs a $100,000 NIL deal with Nike to promote their products on Instagram and at select events.
2. Contract Duration
✔️ How long does the contract last?
✔️ Does it cover one season, one year, or extend beyond college?
✔️ Can the athlete terminate the agreement early?
Example:
- A football player signs a 12-month NIL contract with Gatorade, requiring them to post one promotional video per month.
3. Deliverables & Obligations
✔️ What is the athlete required to do?
✔️ How many posts, events, or commercials must they participate in?
✔️ Are there restrictions on what they can say or do?
Example:
- A gymnast signs a contract with a supplement company, agreeing to post three TikTok videos and attend two promotional events in exchange for payment.
4. Exclusivity Clauses
✔️ Does the athlete have to work exclusively with one brand?
✔️ Are they prohibited from promoting competitors?
Example:
- If a football player signs an NIL deal with Adidas, they might not be allowed to promote Nike or Under Armour.
5. Image & Brand Use
✔️ Can the company use the athlete’s name, image, or likeness beyond the contract period?
✔️ Are there limitations on how the athlete’s likeness is used?
Example:
- A company might request the right to use the athlete’s image in ads for two years, even after they’ve left college.
6. Legal Compliance & NCAA Rules
✔️ Does the contract comply with NCAA and state NIL laws?
✔️ Does the athlete need school approval?
✔️ Are there tax implications the athlete should know about?
Example:
- Some schools require athletes to report NIL contracts for compliance reasons.
Red Flags to Watch for in NIL Contracts
🚩 Unfair Revenue Splits – If an agent or collective takes a huge percentage of earnings, it might not be a good deal.
🚩 Lack of Transparency – If the contract doesn’t clearly state payment terms or deliverables, reconsider signing.
🚩 Overly Restrictive Exclusivity – If a brand prevents athletes from signing future NIL deals, it could limit earning potential.
🚩 Ownership of Likeness – Some contracts attempt to own an athlete’s image beyond the deal’s expiration.
🚩 Indefinite Commitments – If there’s no clear end date, the athlete might be locked into a bad deal for too long.
How to Negotiate a Better NIL Contract
1. Consult a Lawyer or NIL Agent
- Never sign a contract without professional advice.
- A lawyer or NIL agent can spot bad clauses and negotiate better terms.
2. Compare Offers
- If multiple brands are interested, use one offer to negotiate a better deal elsewhere.
3. Ask for More Than Just Money
- Negotiate additional benefits like free gear, travel stipends, or long-term incentives.
4. Ensure Flexibility
- Avoid long-term exclusivity that prevents future NIL opportunities.
Who Creates NIL Contracts?
NIL contracts are usually created by:
✔️ Brands & Companies – Businesses looking for athlete endorsements.
✔️ NIL Collectives – Donor-backed groups offering compensation.
✔️ Social Media & Marketing Agencies – Helping athletes secure sponsorships.
✔️ Universities (Indirectly) – Some schools provide resources to help athletes understand contracts.
Top NIL Contracts in College Sports
| Athlete | School | Estimated NIL Deal | Notable Brands |
|---|---|---|---|
| Bronny James | USC | $7.5 million | Nike, Beats by Dre |
| Caitlin Clark | Iowa | $3.4 million | Nike, Gatorade, State Farm |
| Shedeur Sanders | Colorado | $4.5 million | Mercedes-Benz, Gatorade |
| Angel Reese | LSU | $1.8 million | Coach, Reebok |
| Arch Manning | Texas | $3.8 million | Panini, Nike |
The Future of NIL Contracts
As NIL continues to evolve, we can expect:
✔️ More structured contracts to protect athletes.
✔️ Universities providing more NIL education for players.
✔️ Stronger NCAA oversight on NIL deals to prevent recruiting violations.
Some experts believe NIL contracts could eventually resemble professional endorsement deals, with agents, long-term agreements, and revenue-sharing models.
Final Thoughts: Protect Yourself in NIL Contracts
NIL contracts present life-changing financial opportunities, but they also come with risks. Before signing any deal, athletes should:
✔️ Read the entire contract carefully.
✔️ Consult with an NIL lawyer or agent.
✔️ Negotiate for better terms.
✔️ Avoid signing unfair exclusivity clauses.
With the right approach, athletes can secure great NIL deals while protecting their financial future and NCAA eligibility.