College NIL Dash for Cash Raises a Question: Are the Kids Alright?

Today’s guest columnist is Professor Rick Burton of Syracuse University.

Imagine assigning your name, image and likeness rights (NIL) to someone for just a T-shirt.

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Hard to visualize? Not if you are an NCAA student-athlete and all around you (at home, on social media, in the dorm and throughout the locker room), voices are curious whether you are cashing in.

That interest (or encouragement) is logical because on July 1, approximately 500,000 NCAA athletes became independent business entities. They were told they could leverage their NIL, with few guardrails.

But does the small army of potential entrepreneurs truly understand the concept of assigning intellectual property rights and entering into binding agreements? Can they work out the difference between conditions made on a promise, and a promise?

There’s a 1973 film, The Paper Chase, which centers on a Harvard Law professor (played by Oscar winner John Houseman) and his lectures on contracts, particularly the ones we make in our daily lives. I reference the movie in my leadership class at Syracuse, and hope the growing ranks of intercollegiate entrepreneurs will quickly master just exactly what they are selling and receiving in return.

For many NCAA scholarship recipients, college delivers a series of quid pro quo arrangements. The athletes agree to remain academically eligible and remand themselves to the demands and commands of their coach. In return, almost every imaginable need is addressed through the provision of tuition, housing, feeding, clothing, cost-of-living payments, computers, iPads, books, tutors and transportation (at least to away games).

Now, those same athletes are about to cut agreements with commercial third parties, many of which may not treat them with the comprehensive “care of duty” required of college educators and university administrators. In this competitive business arena, these neophytes will learn that agreeing to appear in person or as an image, whether the deal is written on a pizza shop napkin or fancy laptop, formally binds the athlete in time-consuming ways.

Managing a brand isn’t a part-time thing. It’s really a full-time conservatorship.

That gets tricky if a college athlete is already bound to 40 hours a week of practices and games plus at least 20 hours a week keeping up with 12 credits per semester (the NCAA minimum) and making meaningful progress toward a degree. Can it be done? Of course. But it’s a complex process that takes time and discipline.

In the athlete’s mind, an agreement to receive free cheeseburgers in return for providing a photograph (for the restaurant’s wall of fame) sounds simple. In theory The Shake Shed or Varsity will post their image, and the baller, gymnast or runner eats free all season. Or forever.

The catch comes when the House of Holy Burgers starts making time demands on the athlete or starts limiting the amount of food. “We’ve got a deal,” says the House. “And we need you here this weekend to sign autographs.”

Even scarier than the “Will Work for Food” exchange is when a young athlete, desperate to keep up with peers, does an NIL deal for something as short-sighted as a T-shirt. This may sound unlikely, but for the freshman arriving at State U. with a duffel bag of meager belongings, it won’t take much to incentivize a deal (especially for something as ephemeral as an image or social media shout-outs).

Will the student grasp that giving something away in perpetuity is short-sighted, or know how to stop a usage they don’t like? (“We hung your picture over the urinals after your crappy performance last week.”) Can they break the deal without costly legal representation?

There are legions of examples involving young rockers or even professional athletes who got taken to the bank when it came to signing away rights. And those individuals were “protected” by certified agents or managers. Those same agents won’t bother with 90% of NCAA athletes. The dollars just won’t be there … which means moms, uncles, friends and roommates may handle local deals.

That doesn’t mean I’m against NIL. Far from it. But one thing I’m hoping we’ll see is a commitment from every NCAA school (Syracuse has already put a course on the books) to provide contemporary education on entrepreneurship (i.e., creating an LLC) and legal liability for these start-ups. Especially for the “kids” who might risk their cow (the academic promise of a degree) for magic beans.

The top 1,000 superstars will warrant comprehensive resources and will do well. In fact, a few days ago, Quinn Ewers, a backup quarterback at Ohio State, reportedly signed a three-year, $1.4 million deal with an autograph vendor.

Another subset of athletes will likely rely on sport management majors (some about to start athlete representation businesses) to help them. This group will still finish with degrees and move on to their non-playing careers.

Worry most, though, for those college athletes who sacrifice their schoolwork to make a quick buck. Many of these students already send home their Pell Grant and meal monies. This preexisting financial burden might make them believe a $100 payout is worth more than the $1 million+ a college degree traditionally delivers in career earnings.

Those NCAA athletes might get taken to the cleaners (on their own initiative) and come away from college without the emperor’s dry-cleaned suit. Translation? There are those who will chase small dollars (or T-shirts) and not graduate. All because their time as elite athletes lasts less than four years, and they’ve been told to leverage their NIL now.

Let’s hope these young entrepreneurs study the contracts they create and understand the new caveat emptor—”Athlete Beware.”

Burton is the David B. Falk Professor of Sport Management at Syracuse University and SU’s Faculty Athletics Representative to the NCAA and ACC. The second edition of his co-authored book, 20 Secrets to Success for NCAA Student-Athletes, (with a new chapter on NIL) was released in July by Ohio University Press