Williams signed agreement

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Big Ten schools are asking athletes to sign over their NIL rights, permit universities to sublicense the rights to “any and all third parties,” and surrender any legal claim to employee status as part of the planned revenue-sharing structure, according to a copy of an agreement that was viewed by Sportico.

The seven-page memorandum of understanding includes language that says schools will be reimbursed for some revenue already paid should an athlete transfer to a different school–or even enter the transfer portal–and allows the school to adjust the payment up or down as a reflection of the athlete’s performance.

The MOU contains a morals clause; requires the athlete to be in good academic standing to be eligible to receive payments; and explicitly asserts the agreement is not “pay-for-play,” leaving the door open for the deal to be terminated without further payment should the laws change.

Separately, it establishes a set of “representations, warranties and covenants” that includes the seemingly contradictory promise the athlete “will not make … any similar commitment to enroll at and/or compete in athletics for another college or university.”

In recent days, controversy has swirled around former Wisconsin player Xavier Lucas and his revenue-sharing agreement with the school. Lucas has attempted the unprecedented move of transferring to another institution (Miami) without having first received permission to enter the transfer portal by his previous school.

On Saturday, Wisconsin released a statement confirming the existence of what it called a “binding two-year NIL agreement” it has with Lucas, and suggesting it may take legal action against both the player and Miami for alleged tampering. The Big Ten issued its own public comment saying that it supported Wisconsin’s efforts to enforce its “contractual agreement” in light of “information suggesting tampering and contract interference” by Miami.

To date, schools have consistently rejected public records requests for even blank or redacted versions of these agreements. Just last week, Wisconsin justified its refusal to release its records by claiming such a disclosure would do competitive harm to the university and, by virtue, the state.

The document shown to Sportico was from another Big Ten institution, and was provided by a source under an agreement that the specific school not be publicized. It is not clear how precisely the agreement shared with Sportico matches the one between Lucas and UW; Lucas’ lawyer, Darren Heitner, declined to comment.

However, two other lawyers familiar with revenue-sharing MOUs for Big Ten athletes say the language is consistent with agreements they have reviewed. A representative for the Big Ten did not immediately respond to a request for comment.

The MOU sheds light on the less discussed other side of college sports’ likely new reality, which would come to fruition should the proposed settlement in House vs. NCAA receive final approval by a judge in April. The settlement would allow athletes to share directly in the billions they help generate, a point that has come to define discourse about the deal, but does not define what athletes would give away in return. 

Schools, conferences, athletes and lawyers are all currently navigating that question. The settlement would allow schools to initially share up to $20.5 million per year with their athletes, a number set to grow over the course of that 10-year agreement. In return, Big Ten schools appear to be seeking protection from future lawsuits, open rights to use athlete NIL in a variety of commercial arrangements and financial concessions should athletes leave.

Up until now, licensing and NIL rights have not been part of the grant-in-aid agreements athletes enter into with universities. Drafters of the MOU faced a conceptual challenge: securing essential intellectual property and employment-like rights for a college while avoiding traps for the unwary, such as unwittingly establishing employment relationships with athletes, conceding athletes have broadcasting rights and defying NCAA amateurism rules.

The MOU walks a tightrope in several sections. It establishes that the parties are signing an enforceable business contract, with consideration (which in contract law means a bargained for exchange) and mutual promises as part of a monetary exchange.

The language is in stark contrast to longtime NCAA agreements that eschewed business phraseology for amateurism-coded verbiage, such as the national letter of intent which referred to athletics aid and education records. (Notably, the agreement does not use the term “student-athlete,” which served as the preferred moniker of the NCAA and schools for decades.)

At its core, the MOU is an intellectual property transaction. The school is buying a license to use the athlete’s NIL and the associated right to sublicense the athlete’s NIL to third parties. The athlete accepts they do not gain a right to royalties or additional payments in the event of a sublicense. 

***The main NIL concession gives schools a license to use an athlete’s “name, nickname, pseudonym, voice, signature, caricature, likeness, image, picture, portrait, quotes, statements, writings, identifiable biographical information, other identifiable features, and any other indicia of personal identity” such as jersey number or social media handle, according to the document. ***

Those rights can be sublicensed to the Big Ten, NCAA or any other third party, and continue after an athlete is no longer at the school, though not for use to sell goods and services. (Athletes can continue to enter personal NIL deals outside this agreement, but those deals must comply with the revenue-sharing MOU and must be reported to the school).
 
The MOU aggressively attempts to extinguish the prospect of an athlete arguing the deal reflects an employment agreement. Most directly, one clause is bluntly coined “No Employment.” It states the MOU “does not create a fiduciary relationship,” and that the athlete “acknowledges and agrees” they are not an employee and, further, “waives, “forever discharges” and agrees “not to sue the [college], NCAA [and] Conference” on the basis of them being an employee because of the MOU or by “serving as a marketing agent” as part of the deal. 

Although the MOU is ostensibly not about the athlete’s play, it notes the school reserves the right to “increase or decrease” payments in reflection of their performance. The MOU mentions two illustrations: the player wins a Heisman Trophy or sees their playing time reduced. Although the MOU maintains the relevance of developments concerning the “promotional value of using the Athlete’s NIL,” they are obviously linked to the athlete’s play.

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