Legal Defense Strategies | The Legal Edge: NIL
Issue Date: October 17, 2025 | Issue #17
A Quick Welcome from the Founder
Welcome to this week's Legal Defense Strategy deep dive!
This week, we're tackling a foundational, yet frequently misunderstood, legal question: Who truly owns an athlete's likeness, and what are the hidden risks in granting away those rights permanently?
The rush for NIL deals often overlooks the long-term implications of intellectual property ownership. Understanding these nuances is crucial for protecting an athlete's future earning potential.
This newsletter provides educational insights and general information related to the legal side of NIL.
Let's dive in.
Rebekah Ballard, 3L
This Week’s Strategic Insight
The Legal Risk of Granting Perpetual IP Rights
Many NIL contracts, particularly with collectives or large brands, include clauses that can transfer or license an athlete's intellectual property rights (likeness, image, signature) in perpetuity or for excessively long terms. Failure to meticulously review and negotiate these IP clauses can result in an athlete losing control over their own identity and future earning potential long after their collegiate career ends.
The Peril of "Perpetual" Clauses
In the excitement of securing an NIL deal, athletes and their representatives can easily overlook the fine print regarding intellectual property (IP) rights. "Perpetual" or "irrevocable" clauses are particularly dangerous.
What it Means: A perpetual clause grants a company the right to use an athlete's likeness forever, even after the contract term expires, and potentially without further compensation.
The Danger Zone: This means an athlete could find their image, signature, or name used in advertisements, merchandise, or even AI-generated content years or decades later, with no ability to control the usage or demand new payment. It effectively creates a legal zombie contract that outlives the athlete's immediate career.
IP: More Than Just a Face
An athlete's "likeness" isn't just their face. It encompasses a broad range of identifiable attributes that fall under intellectual property law.
Elements of Likeness (IP): This includes their image, voice, signature, distinctive gestures, nicknames, jersey number (if strongly associated), and even catchphrases. Each of these can be monetized.
The Trap: Many NIL contracts are drafted broadly, granting rights to "any and all intellectual property associated with Athlete's likeness." Without specific carve-outs or limitations, this can inadvertently transfer rights an athlete might not even realize they possess or would want to control later.
The Consequences: Lost Control and Future Earnings
Granting overly broad or perpetual IP rights has severe long-term consequences, impacting an athlete's future personal brand and professional career.
Lost Endorsement Opportunities: A brand might be hesitant to sign an athlete if a competitor already holds perpetual rights to their image for a similar product.
Devaluation of Future Self: An athlete's post-sports career (e.g., as a broadcaster, actor, or entrepreneur) relies heavily on their personal brand. Having past affiliations perpetually tied to old deals can dilute their value or create unwanted associations.
No Recourse for Unwanted Use: Imagine an athlete's image from their college days being used decades later in an advertisement for a product they no longer endorse or that goes against their values. Without control, they have no legal standing to object.
Why This Matters?
An athlete's likeness is their most valuable asset. Treating IP rights as mere boilerplate text in a contract is a critical legal oversight that can extinguish future opportunities and control, making astute IP negotiation a core pillar of NIL defense.
A man's work is his bond; his property his testament. Preserve your creations, for they are extensions of yourself into time.
The Athlete Playbook
What You Can Do Today
Demand IP Term Limits: Insist that any IP license be for a defined, limited term (e.g., 1-3 years), never "perpetual" or "irrevocable."
Specify Usage and Mediums: Clearly define how and where your likeness can be used (e.g., "social media posts for X product only," "print ads in Y region"). Avoid broad "any and all media" clauses.
Retain Control Over Approval: Include a clause requiring your explicit written approval for each specific usage of your likeness, giving you ongoing oversight.
Negotiate "Right of Termination" for Cause: Ensure you can terminate the license if the brand's use of your likeness violates your values or damages your reputation.
NIL Quick Hits
SDSU's $5 Million NIL Pledge
The Story: San Diego State University received its largest-ever NIL pledge: $5 million, donated to support athlete development and NIL opportunities, particularly in men’s basketball.
CSC Anonymous Tip Line
The Story: The anonymous tip line for NIL violations, launched by the CSC last week, has led to increased scrutiny.
Read the Full Article Here:
Red Flags in NIL Contracts
The Story: Media and advisory groups are warning student-athletes to closely review NIL contracts to avoid clauses that could limit future earning opportunities or create long-term binding obligations. Education on red flags in endorsement and sponsorship agreements is a mounting priority for athletes and universities.
Read the Full Article Here:
Lawsuits for Pre-2016 Pay Dismissed
The Story: Multiple lawsuits by former college athletes seeking back pay for pre-2016 NIL usage were dismissed by federal judges in Michigan, Ohio, and New York. Courts ruled that the statute of limitations had expired and that these athletes fall outside the window for compensation established by the House v. NCAA settlement, which covers athletes after June 15, 2016.
Read the Full Article Here:
The Breakdown
The Forever Freshman Deal
A promising freshman basketball player signs a 3-year NIL deal with a local car dealership for $10,000/year. The contract contains a clause: "Athlete grants Company a perpetual, irrevocable, worldwide, royalty-free license to use Athlete’s Name, Image, and Likeness for promotional purposes."
The Legal Defense Strategies’ Take
Our analysis highlights this as a high-risk IP transfer. While the initial compensation is fair for a freshman, the perpetual clause means the dealership could use the athlete's image for free, forever, even if the athlete becomes an NBA superstar earning millions. This significantly devalues their future IP, tying them to an old deal without ongoing compensation or control, creating an indefensible long-term position.
Legal Lingo Explained
What is does ‘Intellectual Property (IP) and Licensing’ mean?
Intellectual Property (IP) in the NIL context refers to the legal rights an individual has over their unique personal attributes (image, voice, signature). Licensing is the legal process where the owner (the athlete) grants another party (e.g., a brand) permission to use their IP, usually for a fee and a defined period. Perpetual licenses, however, grant this permission indefinitely (forever).
Why Does This Matters for NIL?
Failing to properly manage IP rights can lead to an athlete losing financial control and creative say over their own image. It transforms what should be a temporary asset rental into a permanent transfer, severely limiting future high-value opportunities and leaving the athlete vulnerable to unwanted associations or uses of their persona without future compensation.
Your Toolkit
Athlete Pro Tip
Before signing, ask your attorney: "Does this contract grant away my likeness forever, or for uses I haven't approved? If so, we need to renegotiate." This question is your ultimate IP defense.
What’s Next?
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Next week, we are covering: The Unaddressed Gaps Post-House v. NCAA
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Disclaimer: This newsletter provides educational insights and general information related to the legal side of Name, Image, and Likeness (NIL). It does not constitute legal, financial, or professional advice, and should not be relied upon as such. This content is for informational purposes only, and you should always consult with a qualified professionals for advice tailored to your specific situation.
NIL laws are constantly evolving, and the information provided might not be the most current at all times.