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NIL CONTRACT CONSIDERATIONS: EXCLUSIVITY

By Tay Hawker, Hawker Family Sports & Entertainment

Name, Image & Likeness (NIL) legislation has opened a new world of opportunities to Student-Athletes. However with that, comes great responsibility: Many businesses are sending athletes an initial NIL contract that is at best, severely one-sided, and at worst, taking all the athlete’s NIL rights FOREVER.

As Chief Executive Officer and licensed sports agent with Hawker Family Sports & Entertainment, I have seen a plethora of atrocious NIL contracts come across my desk, and met with many brands that didn’t quite understand this space. Unfortunately, collegiate athletes are putting themselves at risk by blindly signing NIL contracts without thoroughly understanding what they’re agreeing to.

This article looks to educate athletes on when or when not to sign exclusive NIL contracts with agencies, brands, businesses etc.

Why WOULD You Consider Signing an Exclusive NIL Contract?

The Company You’re Signing With Encompasses ALL Of Your Needs

At the end of the day, as a college athlete there are a broad range of opportunities that are available to you with the recent passing of NIL legislation. With your possibilities being endless, this means you need to work with a team that can fulfill them. For example, the only time you should be considering exclusive NIL contracts with representation would be when you ensure they are the people that can do it all. You should take some time to take stock of what you want to achieve in this new space and identify the resources that the particular agency is excelling in. If they do not match your entire list of goals, do not sign an exclusivity agreement. 

The NIL Contract Includes A Fair And Mutual Termination Clause

As a college athlete, you should never sign anything that doesn’t have a bilateral termination clause. This means you could be signing yourself away for a long period of time. Firstly ensure that anything you sign in college doesn’t extend past your eligibility, and ensure you have the ability to leave. The only time you should sign any NIL contract with exclusivity as a college athlete is if you are able to walk away from this relationship if you feel as though it is not serving completely. 

You Feel Comfortable

Finding an agent is similar to finding a good therapist. It has to be a good fit, both ways. Not everyone is going to be a perfect fit for an agent/client relationship. This means that if you are going to sign an exclusive NIL contract with an agency or business, you need to feel extremely comfortable that they are people for you. They genuinely care about your best interest and they aren’t in it to profit from you and drop you when you aren’t of any use to them. This has to be a level of comfortability that you can go to them with anything, complaints included. If you do not feel extremely comfortable that this business is a good fit, you should not sign an exclusivity contract. 

Why WOULDN’T You Sign an Exclusive NIL Contract?

Keep All Of Your Options Open

You have a limited time in college. With the new legislation, while it may lead you to believe you have your freedom it is actually far from the truth. You still have tight parameters on what you can do to generate income. This means you must ensure that you are keeping all of your doors open for additional revenue. This could mean that if you sign an exclusive agreement with ‘X NFT Company’, you won’t be able to start a clothing line without them getting a benefit unless otherwise stated in the contract. You need to have the freedom to explore every opportunity that comes your way and every business idea you might have. Do not sign an exclusivity agreement with anyone that plans to limit the things you can do with your NIL off your own decision making. 

Protect Your Name, Image & Likeness

In some bad cases, I have seen college athletes sign an exclusive deal to a business to make clothing, and they had to provide that business all income earned from their NIL. No time should you be providing commission fees to someone for work they had no part of. This has become prevalent in the NFT space where companies have asked for exclusive rights to your NIL with no stipulation of use. This ties in closely to the above mentioned two way termination clause, but to avoid getting there you should protect yourself by ensuring there is no exclusivity in the contract.

It Limits Your Future Opportunities

Some agencies are good for college, some are good for the pros, many are good at both. But why should you make that decision while you’re in college? In this space, you are not being paid by anyone for your athletic ability. This is a new landscape with numerous and often uncharted opportunities out there. You should not be pigeonholing your opportunities by picking one company to sign everything to. Many agencies are still finding their footing in this new space, and some may have expertise in different areas. Protect your decision making by enabling options to remain open. Your future could change at the drop of a hat, your decisions should act accordingly.

While this might be a new space, there are some incredible people who are committed to ensuring the safety and success of Student – Athletes across the country. Be sure to use the resources around you and make smart choices. 

Follow @hfse.college and reach out if you have any questions. 

Learn More From Hawker Family Sports & Entertainment

Meet the Expert Contributor

Tay Hawker is the Chief Executive Officer at Hawker Family Sports & Entertainment which is a full-service sports agency with a dedicated division to college athletic growth. HFSE looks to ensure college athletes are protected, supported and developing in the most important time in their career. 

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