*Zachary Seidel
I. Introduction
For years, the National Collegiate Athletic Association (NCAA) and its universities have yielded huge revenues through their sports programs.[1] However, the student-athletes who generate this revenue with persistent and strenuous hard work make nothing.[2] Until July 1, 2021, college athletes never had the opportunity to monetarily profit from their name, image, and likeness (NIL).[3] In NCAA v. Alston, the Supreme Court upheld the district court’s injunction, enjoining the NCAA from limiting education-related benefits for student-athletes.[4] The district court noted that the “NCAA uses its monopsony power to cap artificially the compensation offered to recruits.”[5] Therefore, without “viable substitutes” in the market, the Court determined that the NCAA violated the antitrust principles of the Sherman Act as its restrictions were an improper restraint on trade that impeded the labor market from functioning.[6]
After the Court’s decision, the NCAA voted to loosen restrictions further, allowing college athletes to benefit from NIL opportunities.[7] The NCAA clarified that “[t]he temporary policy will remain in place until federal legislation or new NCAA rules are adopted.”[8] The interim policy vaguely and simply “prohibit[s] a school or its employees from paying an athlete directly for his or her NIL rights.”[9] The NIL policy induced an immediate domino effect, as student-athletes quickly took advantage of this new policy and signed sponsorship deals with large companies.[10] With little guidance from the NCAA or their affiliate schools, “companies large and small have wasted no time finding college athletes for sponsorship deals.”[11]
II. Companies v. Athletes: Unequal Bargaining Power
Several widely-known companies took advantage of the undeveloped NIL guidelines and contracted exceedingly one-sided deals with student-athletes.[12] The digital media sports behemoth, Barstool Sports, Inc. (Barstool), leads the charge on these seemingly unfair deals.[13] Shortly after the NCAA policy change, Dave Portnoy, Barstool’s founder, posted a video on Instagram offering athletes the opportunity to become a “Barstool Athlete” by applying through its website for free and offering exclusive Barstool branded merchandise.[14] Within one week of this announcement, Barstool had signed over 100,000 student-athletes.[15]
Barstool’s application requires accepted applicants to add “Barstool Athlete” to their social media bios.[16] In exchange, student-athletes provide “Barstool the right to use and post [a picture of the student-athletes in uniform] on any Barstool platform or channel and confirm[] that [the student-athletes] have the rights required to allow us to use it.”[17]This language, however, does not provide a timetable for the agreement, which implies the agreement could last indefinitely.[18] Without any clear indication of the benefits provided to student-athletes through these deals, such as compensation, Barstool essentially holds the right to use the student-athletes’ NIL at no cost.[19]
The prominent video gaming platform, YOKE Global, Inc. (YOKE Gaming), makes deals similar to those made by Barstool.[20] YOKE Gaming’s entrance into the student-athlete endorsement market left a strong impact; it signed more than 10,000 athletes in the first eighteen hours following the NCAA’s announcement.[21] For twenty dollars, YOKE athletes are required to post a sponsored social media advertisement on their profiles.[22] The language in the YOKE Gaming agreements is even more alarming than that of Barstool:
You also hereby grant YOKE the worldwide, perpetual, transferable, sublicensable, royalty-free and irrevocable right to store, broadcast, modify or make derivative works of, make copies of, distribute, publicly perform and publicly display the Video Game Experiences and your likeness, voice image, comments, content, music and performance as contained in the Video Game Experiences in any and all media and format, whether now known or created in the future. You acknowledge and agree that each Video Game Experience may be edited or modified . . . and each recording of a Video Game Experience or derivative thereof may be included in a compilation with content from or featuring others. In addition, you agree to not capture, record, use, publish, reproduce, distribute, display, post, or share any portion of the Video Game Experiences.[23]
In other words, these agreements give YOKE Gaming the exclusive right to perpetual and royalty-free use of the student-athletes’ NIL.[24] If some of these student-athletes sign lucrative professional contracts in the future, they might still be bound to YOKE Gaming or similar companies that offered arguably unconscionable deals to these impressionable student-athletes.
III. Student-Athletes’ NCAA Eligibility Risks
Many colleges have not publicly clarified their position on these endorsements.[25] However, in almost all current student-athlete handbooks, colleges prohibit the use of their team logos for any purpose without written permission from the school.[26] For example, in the University of Maryland’s most recent edition of their student-athlete handbook, the University provides for sanctions for the use of “University of Maryland or Maryland Athletics word marks, logos, or images without written permission.”[27] Almost all the endorsements thus far give the contracting companies the right to post pictures to social media of their recently signed student-athletes in uniform, sporting their school logos or names, which violates school policies and could result in sanctions, suspension, or similar consequences.[28]
These deals could result in other repercussions for student-athletes.[29] Some states and individual colleges have already placed restrictions on the type of endorsements that student-athletes can sign.[30] For example, the University of Florida prohibits student-athletes from “enter[ing] into NIL agreements with gambling/sports wagering vendors.”[31] The University of Alabama prohibits its athletes from receiving compensation from any brands that “sponsor or promote gambling activities . . . [or] alcoholic beverage[s].”[32] The Texas state legislature similarly bars student-athletes from “entering into contracts with particular industries, including alcohol, tobacco products, casino gambling . . . [and] sexually oriented” businesses.[33]
However, these provisions do not specify what makes a company fall within one of these prohibited categories. For example, Penn National Gaming, a prominent online gambling and brick-and-mortar casino company, owns thirty-six percent of Barstool.[34] In addition, Barstool has a multitude of sponsorship deals with alcohol brands and offers a wide array of sexually oriented content and products.[35] These associations can put Barstool Athletes at risk for disciplinary action under state legislation, NCAA rules, and university policies.[36] As a result, the endorsement contracts with Barstool, YOKE Gaming, and similar brands may jeopardize student-athletes’ eligibility to continue playing.[37]
IV. Conclusion
Large corporations have quickly taken advantage of student-athletes by signing them to one-sided deals.[38] Many student-athletes are between the ages of eighteen and twenty-one and lack the requisite knowledge for contract negotiation. Ideally, these student-athletes should obtain legal counsel before signing their endorsement contracts.[39] However, many athletes lack this option without the means to do so. Alternatively, it would benefit student-athletes to form a players’ association or union.[40] Such an organization could advise student-athletes on the contractual intricacies and the financial ramifications of their endorsements.[41] Unionization might require some companies to alter their contracts or allow student-athletes to negotiate their pay. Either way, disproportionality and inequity are inevitable in an undeveloped market with large, savvy corporations and impressionable student-athletes. Student-athletes must be vigilant, conduct proper research, and ensure the protection of their futures. While the NIL policy presents a novel and special opportunity for student-athletes to monetize their hard work, student-athletes should take advantage of this opportunity with caution.
*Zachary Seidel is a second-year day student at the University Of Baltimore School of Law, where he is a Staff Editor for Law Review, a member of the Royal Graham Shannonhouse III Honor Society, and the Treasurer of the Jewish Law Student Association. In Spring 2022, Zach will be externing at Evans Law in Annapolis, Maryland, where he will be working on various real estate matters.
[1] See Parker Reed, College Athletes Continuing Financial Struggles Without Representation, The Spectator (April 12, 2017), https://www.spectatornews.com/sports/2017/04/college-athletes-continuing-financial-struggles-without-representation/.
[2] See id.
[3] See Dan Murphy, Everything You Need to Know About the NCAA’s NIL Debate, ESPN (Sept. 1, 2021), https://www.espn.com/college-sports/story/_/id/31086019/everything-need-know-ncaa-nil-debate.
[4] NCAA v. Alston, 141 S. Ct. 2141, 2144 (2021).
[5] Id. at 2152.
[6] Id. The NCAA even admitted that it “enjoy[s] monopsony power in the market for student-athlete services, such that its restraints can (and in fact do) harm competition.” Id. at 2156.
[7] See Press Release, Michelle Brutlag Hosick, Dir. of Commc’ns, NCAA, NCAA Adopts Interim Name, Image and Likeness Policy (June 30, 2021), https://www.ncaa.org/about/resources/media-center/news/ncaa-adopts-interim-name-image-and-likeness-policy.
[8] Id.
[9] Murphy, supra note 3.
[10] See Khristopher Brooks, Endorsement Deals Come Thick and Fast for College Athletes, as NCAA Floodgates Open, CBS News (July 29, 2021, 8:12 AM), https://www.cbsnews.com/news/college-athletes-endorsements-sponsorship-ncaa-nil/.
[11] Id.
[12] See Leah Vann, One Week into NIL, Lawyers Caution Athletes on Barstool, YOKE Gaming and Misinformation that Could Affect Iowa Athletes, The Gazette (Aug. 27, 2021, 1:24 PM), https://www.thegazette.com/iowa-hawkeyes/one-week-into-nil-lawyers-caution-athletes-on-barstool-yoke-gaming-and-misinformation-that-could-a/.
[13] See id.
[14] Barstoolsports (@barstoolsports), Instagram (July 1, 2021), https://www.instagram.com/p/CQ1mjnuhIy1LozVLWLD76PEv4NRsUnftkvJ1_w0/.
[15] See Vann, supra note 12.
[16] Barstool Athlete Application, Barstool Sports, https://www.barstoolsports.com/barstool-athlete (last visited Aug. 25, 2021).
[17] Id.
[18] See id.
[19] See id.
[20] Id.; About Us, Yoke Gaming, https://www.yoketeam.com/about-us (last visited Jan. 12, 2022).
[21] YOKE (@yokegaming), Twitter (July 1, 2021, 7:10PM), https://twitter.com/mickassaf/status/1410737692418080770.
[22] Vann, supra note 12.
[23] Arnaout Athletics & Entertainment Law Firm (@aae.law), Instagram (July 6, 2021) (emphasis added), https://www.instagram.com/p/CQ_gOMlF9JC/.
[24] See Vann, supra note 12.
[25] See Kristi Dosh, With NCAA Stepping Back from NIL Regulations, Colleges Begin Preparing to Adopt Their Own Policies, Forbes (June 24, 2021, 8:40 PM), https://www.forbes.com/sites/kristidosh/2021/06/24/schools-begin-preparing-to-adopt-their-own-nil-policies/.
[26] See, e.g., 2019-2020 Student-Athlete Handbook, University of Maryland (Sep. 3, 2019), https://umterps.com/documents/2019/9/30/SAH_2019_20_FINAL.pdf; 2020-2021 Student-Athlete Handbook, University of Miami (Oct. 19, 2021), https://storage.googleapis.com/hurricanesports-com/2021/10/eb1a6675-2021-student-athlete-handbook-10.19.21.pdf; UNW Athletics Handbook 2020-2021, University of Northwestern (Sep. 21, 2020), https://unweagles.com/documents/2020/9/21/Athletics_Handbook_2021.pdf.
[27] 2019-2020 Student-Athlete Handbook, University of Maryland, supra note 26.
[28] See id.
[29] See Dan Wallach & Dan Lust, Barstool NIL Debate, Trevor Bauer Allegations, Rachel Nichols ESPN Audio, Conduct Detrimental: THE Sports Law Podcast (July 13, 2021), https://podcasts.apple.com/us/podcast/barstool-nil-debate-trevor-bauer-allegations-rachel/id1490287845?i=1000528730705.
[30] See Dan Murphy, NCAA Clears Student-Athletes to Pursue Name, Image and Likeness Deals, ESPN (June 30, 2021), https://www.espn.com/college-sports/story/_/id/31737039/ncaa-clears-student-athletes-pursue-name-image-likeness-deals.
[31] Name, Image, Likeness, University Of Florida Gators (June 24, 2021), https://floridagators.com/sports/2021/6/24/name-image-likeness.aspx.
[32] Name, Image, Likeness, University Of Alabama (June 28, 2021), https://rolltide.com/sports/2021/6/28/name-image-likeness.aspx.
[33] S.B. 1385, 87th Leg. (Tex. 2021).
[34] See Alex Reimer, Barstool Sports’ $450 Million Deal with Penn National Gaming Is Ultimate Win-Win, Forbes (Jan. 29, 2020, 1:01 PM), https://www.forbes.com/sites/alexreimer/2020/01/29/barstool-sports-sale-to-penn-national-gaming-is-ultimate-win-win/.
[35] See Wallach & Lust, supra note 29.
[36] See id.
[37] See id.
[38] See id.
[39] See id.
[40] See id.
[41] See id.
University of Baltimore Law Review 