Negotiating NIL Sponsorship Deals with College Athletes: Part Two

Striking an effective NIL (Name, Image and Likeness) deal can be a smart play for a client. NIL deals allow college athletes to earn money from endorsements, sponsorships, social media, autographs and other commercial opportunities. And in turn, the deals are a creative way to help a brand connect more authentically with an athlete’s audience by increasing brand exposure to the fanbase.

But, of course, no deal is completely without risk. The key is to first understand the potential pitfalls associated with your NIL deal, then establish a solid offensive strategy, and finally prepare your defense in case you need it.

Here are 8 potential pitfalls to keep on your radar:

Reputation Era

Pick your players carefully to avoid reputational damage. If a college athlete is involved in controversial or unethical behavior, it can reflect poorly on your brand by association. Brands may face backlash or public scrutiny if the athlete engages in actions that contradict the values or principles of the sponsoring company.

Key Performance Indicators

When things are good, they’re good. But when they’re not… An athlete’s performance on and off the field can be unpredictable. If their performance declines or they face setbacks, it’s not a deal breaker, but your brand may take a hit on the expected return on investment.

Social Norms

College athletes are often active on social media, and any negative posts or actions can impact the brand's reputation. Offensive or inappropriate content shared by the athlete may lead to public relations issues for the sponsoring brand. Do a quick scan before you sign, and keep your finger on the pulse for the duration of your contract.

Rules is Rules

As Dwight Schrute said, “Learn your rules. You better learn your rules.” Failure to adhere to NCAA or other relevant governing body rules can result in penalties for both the athlete and the sponsoring brand. Address any legal issues related to the contract terms, rights, and obligations right away.

Great Value? Brands

If the brand overestimates the athlete's marketability or influence, they may end up paying more than the actual return on investment. Athletes' popularity and marketability can change quickly, so take caution when committing to long-term, high-value deals without considering potential fluctuations.

Too Much of a Good Thing

Sponsoring multiple athletes or engaging in too many endorsement deals within a short period may dilute the brand's message and result in diminishing returns. Consumer fatigue could occur if audiences perceive the brand as overusing athlete endorsements. So find a balance.

The Competition

If competitors secure deals with more popular or successful athletes, the brand may face challenges in standing out and gaining a competitive edge. Association with a less successful or less well-known athlete may not yield the desired impact.

The Other Values

Brands need to carefully consider the values, beliefs, and public image of the athlete because a misalignment with the brand's values or target audience can lead to negative consequences. To mitigate these risks, brands should conduct thorough due diligence on the athletes they are considering for endorsement deals, establish clear contract terms, and continuously monitor the athlete's behavior and public image. Additionally, incorporating flexibility and crisis management strategies into contracts can help brands navigate unforeseen challenges.

 

After striking a deal between our clients at Davis Law Firm and Texas quarterback, Quinn Ewers, our TXC team watched more college football than ever before. We knew that the work didn’t end once the deal was struck.

As we continue to navigate the exciting but nuanced world of NIL deals, it's crucial to remember that foresight and preparation are essential. By understanding the potential risks and taking proactive steps to mitigate them, we can maximize the benefits of these partnerships.

Whether it's through careful contract negotiation, brand alignment, or maintaining a strong public image, a thoughtful approach can turn potential pitfalls into opportunities for growth. With the right strategy in place, an NIL deal can not only boost an athlete's earnings but also create lasting, mutually beneficial relationships between athletes and the brands we serve.

Check out the latest spot and visit TXC's YouTube to see Jeff and Quinn in action!