Lawyer advises caution with endorsements
College athletes eye deals for use of name, likeness
Hours after the NCAA announced that college athletes can finally start making money off their names and images, deals arrived in a flurry. Famous and obscure jocks alike announced partnerships with cellphone companies, trash haulers and apparel makers, among many others.
In Illinois, which passed a law allowing the deals just before the NCAA’s declaration, University of Illinois shooting guard Trent Frazier made himself available for $45 video chats on the Vidsig app, while Northwestern quarterback Ryan Hilinski offered to do Cameo messages for $50 a pop.
It is, with mind-spinning abruptness, a new day in college sports. But it’s one Dustin Maguire has prepared for since seeing his avatar in a college basketball video game and realizing he wasn’t getting paid.
The former St. Louis University and Northern Kentucky guard became a lawyer, and several years ago, anticipating that college athletes would soon get a chance to do endorsements, made that a specialty of his Edwardsville, Illinois, practice. He even made sure to buy the web domain nameimagelikeness.com.
Maguire said Thursday he’s getting calls from athletes around the country seeking counsel as schools scramble to write their own rules with little guidance from the NCAA. He’s a legal adviser, not a deal-maker, and said athletes must be careful about the details, from tax considerations to the long-term implications of an endorsement.
“A lot of people are trying to take advantage of this chaos for their own benefit and I think athletes certainly are at risk with that,” he said. “… It’s very important that athletes know, before they sign anything, what they’re committing themselves to. Are they going to give exclusive rights to a particular company for their entire college career based on a value that hasn’t yet reached its peak?”
Here is Maguire’s take on how things might play out. The conversation was edited for length and clarity.
Do you expect football and basketball players to gain the most from these changes, or will athletes in all sports benefit?
All sports. There was just a publication from Darren Rovell (saying) 10 out of the top 20 projected highest earners were not football or men’s basketball players. I believe that will be reflected across the board.
Social media is the big X factor here. We have volleyball players, softball players, wrestlers and track and field athletes who have hundreds of thousands of followers, and therefore have a very high value with regard to social media.
Is it clear how much money athletes can expect to make?
No. There are projections for social media followers, formulas that have been used for professional athletes and celebrities because name, image and likeness (rights) are not new. What is new is (college) athletes having access to those earning opportunities.
A provision of the Illinois statute is that a deal has to be commensurate with the market value. I think that’s to be determined because there is not a market for college athletes’ (name and image rights) historically. As a believer in the free market, I believe your market value is what someone’s willing to pay you.
Can athletes make their own shoe deals? Can they get paid to wear Nikes even if their university has a contract with Adidas?
There are restrictions for any clothing, including shoes, that can be worn by the athletes during any games or team activities. Any team-sanctioned activity, you’re going to have to be equipped in the school’s attire. I know that’s part of Illinois’ law.
There’s also a restriction on conflicting contracts. I believe that a contract (for alternate apparel) would not be conflicting if you’re not wearing any of the attire during official team activities. So I very much look forward to the interpretation by the institutions.
If one player gets paid a lot and others get paid nothing, how will that affect the harmony of college teams?
We have a body of work, looking at professional leagues, how team chemistry cannot be an issue when you have different incomes. Obviously, these are college athletes and not professionals. However, I would say that anyone who’s competing at the college level understands the importance of individual accountability for the benefit of the team.
Those expectations from coaches are not going away. You’re not going to get away with not setting a screen for the person who’s making the big (endorsement) deal because you’re going to find yourself on the bench. So I think the competitiveness and the individual responsibility that comes along with being an athlete is really the best deterrent.
Any other wrinkles to watch out for?
I think schools really need to be careful with how much they’re getting involved. One of the topics that’s come up a lot is designing logos for athletes. If athletic departments are getting into that, where they’re essentially giving a design to an athlete to use for their individual profit, I think that’s overstepping, and I know that’s something that has gone on.
Serious intellectual property issues are at stake with athletes’ use of logos for business purposes. Schools should not be providing designs and athletes should not be using school-provided designs without having independent legal advice and registering trademarks with the U.S. Patent and Trademark office. (Failing to do so) could create potential liability for the schools.
In five years, how do you think athletes will be profiting from their name and image rights?
In five years, but hopefully sooner, athletes will have group licensing opportunities for video games, jerseys, trading cards, and other team-related activities. Schools will allow athletes to use their (trademarks) because the patchwork approach we have will motivate schools to allow such use to get an advantage in recruiting. With the NCAA’s … hands-off approach, leaving (name and image) policies to the individual schools will bring about a lot of creative competition.