NIL, High School Athletes & Local Market Opportunities

allisonhushek
May 15, 2023
5 min read

NIL, High School Athletes & Local Market Opportunities

A Sports Lawyer’s Perspective for Athletes & Parents

By Allison Hushek on May 15, 2023

As a former UCSD college softball pitcher, the allowance of NIL (Name, Image, Likeness) revenues for student athletes was the best thing to happen in sports in decades. Everyone from athletes at non-Power Five Conference Schools to female athletes to athletes in non-revenue generating sports now has an opportunity to make money from years of dedication and hard work. If you’re a high school or college athlete wondering how to jump into this new market, here’s what you and your parents need to know.

Goal. The goal of your NIL deals shouldn’t be to grab some nominal spending monies at college with a flashy Instagram account. Rather, NIL now provides amateur athletes with the opportunity to develop business relationships that can flourish over the next two or three decades of your life. Athletes spend their entire lives developing their skills, but many feel lost in terms of a career when they graduate. Rather than spending time on studies and internships like other college students, athletes spend their waking minutes improving in their sport and traveling with their team – barely having time to fit in academics, let alone job prospects. NIL deals allow an athlete to learn about the businesses they’re promoting, exhibit professionalism by showing up on time for appearances, and make business connections that can turn into future job opportunities. NIL gigs even allow an athlete to possibly remain working in the sports industry, which for many pre-NIL athletes has become a distant dream.

Deal Types | Trends. If you’re an athlete in a revenue-generating sport at a Power Five school, you already know what to do to land NIL monies. For everyone else – the water polo player, the surfer, beach volleyballer, skimboarder, tennis player, swimmer or golfer, here’s how NIL works… NIL activities consist mainly of endorsements, appearances, instruction (camps, clinics, private instruction) and student athlete merchandise sales. NIL deals can be made directly with businesses by the athlete or an agent, or through a college collective composed of boosters representing local businesses and fans who are eager to donate their money. The most important trend to note in 2022 is that local NIL deals surpassed deals with national brands. Apparel/footwear accounted for 20% of all NIL activity (including co-licensing deals with universities), restaurants accounted for 14%, followed by technology deals primarily in the NFT space, with financial services comprising 8% of NIL activity, and auto deals landing at 4% (Sports Business Journal, January 2023). This means that athletes can and should be making in-roads with businesses in their hometowns during their high school days, as well as local businesses in their college towns during their college years. Everyone from tax & accounting specialists, realtors and law firms to local eateries, fitness centers and clothing stores will put marketing dollars into their favorite local athletes given the value they’ll receive back in publicity. Marketing local businesses can encompass print/radio/TV/social media ads, event appearances, billboards and co-branded merchandise.

Marketing Yourself. According to the Sports Business Journal, 72% of all NIL activity involves social media. Don’t freak out. You don’t have to be a gregarious media marketing guru who posts ingenious videos four times a day on top of being a stellar student athlete. That’s reserved for the top athletes who have 100,000-150,000 social media followers, are represented by agents and will sign five and six figure NIL deals. Instead, build your followers organically using social media accounts solely dedicated to your sport by posting photos and short snippets about playing the sport you love on a somewhat regular basis. Create a brand for yourself around your sport, even if you’re an introvert. Use your sporty nicknames to your advantage, as that may be what shows up on a t-shirt in a few years at your college bookstore. Include your teammates in the fun and help promote each other. If you’re a female athlete deciding whether to post suggestive or sexy photos of yourself to gain followers more quickly, this debate is addressed in the NYT article, “New Endorsements for College Athletes Resurface an Old Concern: Sex Sells” by Kurt Streeter dated November 8, 2022. It’s a personal decision that requires being true to your authentic self.

Regulations. Most people consider NIL deals to be unregulated, but there are some serious regulations to be aware of. It’s true there are too many agencies trying to represent athletes in NIL deals, some without the proper licenses and some that are just plain shady. There will be many consolidations over the next couple of years in this area. Check your state laws to see if there are licensing requirements for a sports agent to procure employment for student athletes. Before you sign with an agent, confirm they have the proper licenses. Research websites like the NIL Network (NILnetwork.com) to see if the agency and the company that wants to sign a NIL deal are reputable. Know that the agent’s role is to procure employment for you, and the lawyer’s role is to review the NIL contract to ensure what you’re signing is fair. Be aware of the state’s NIL laws (if applicable), the NCAA’s NIL compliance regulations if in college, and the school’s NIL rules (e.g., high school or college). If a school already has a sponsorship deal with a brand, it doesn’t necessarily preclude the athlete from making a deal with a competing brand, so long as you work within the school rules about sponsored uniforms at games and team appearances. Consult with your school’s Athletic Director and/or NIL representative to avoid compliance violations. Finally, if you’re a minor under 18 years old, you have a higher standard of data privacy rights, and your legal guardian must co-sign contracts.

Participation in sports comes to an end for everyone, but it’s what you do with your skills and talent after that matters. Athletes tend to hesitate to start a sports-dedicated social media account for fear of not having enough followers at the start, but don’t let that get in your way. Not every video has to go viral. You’ll see numbers rise when you have local press reporting on a great performance you had one time during a season, so be ready for the moment. Meanwhile, practice professionalism with coaches, teammates, school athletic executives, reps, businesses and fans. Use this amazing NIL opportunity that prior generations didn’t have to further yourself financially and professionally.

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This blog is provided for information purposes only and does not constitute legal advice