Given the potential value of NIL Licensing Agreements and the high-stakes nature of recruiting, crafting a well-structured agreement is essential to protect the institution and ensure long-term competitiveness for the athletics program. Below are examples of several key terms to consider when drafting and refining your NIL Licensing Agreement.

NIL Grant of Rights

Explicitly define what the student-athlete’s “NIL Rights” entail and how the institution may use those NIL Rights. Similarly, define the “Materials” the institution owns that incorporate any of the student-athlete’s NIL Rights. Some questions to consider regarding the student-athlete’s grant of NIL Rights:

• May the institution sub-license the NIL Rights to third parties?
• Is the student-athlete’s grant of NIL Rights exclusive to the institution?
• How long, and in what capacity, may the institution use the Materials created from the NIL Rights (e.g., jerseys, arena wraps, promotional videos) after the agreement expires/terminates?
• Will the institution request a free, limited NIL release for use on the website/roster? Will the institution request an NIL release for student-athletes not signed to an NIL licensing agreement?

Services Performed by Athlete

In addition to a grant of NIL Rights, determine whether there are any services the student-athlete will need to perform pursuant to the agreement. Services may include anything from recording in-game promotional videos to making public appearances. When considering services, remember:

• If the student-athlete is an international student on an F-1 visa, include language in the NIL licensing agreement making clear that under no circumstances will the institution request or require the performance of services in the United States.
• The more control the institution exerts over the student-athlete, the more likely the relationship looks like employer-employee as opposed to licensor-licensee.

NIL Payments

NIL Payments will likely be the first thing negotiated, so having a consistent starting point for all NIL Licensing Agreements will help guide that process. Some questions to consider regarding NIL Payments:

• Does the institution plan on paying a lump sum or several payments pursuant to a payment schedule? Will these payments be structured strategically around NCAA Transfer Portal and enrollment windows?
• Does the institution plan on offering in-kind benefits or other material benefits in addition to a monetary amount?
• Does the institution want to incorporate any sort of “Achievement Bonus” as the value of the student-athlete’s NIL Rights may be impacted by individual or team success?
• How will these payments be executed on campus; specifically, which department will make these payments and are they prepared for the additional responsibility?

Conditions and Termination

Three NIL Licensing Agreement terms—Conditions to Payment, Representations & Warranties, and Termination—all interplay and should be drafted in concert. The institution may want to condition its NIL Payments in order to protect itself in the event the student-athlete does not fulfill the requirements laid out in the Agreement. Failing to meet these requirements could result in a breach of contract that ultimately terminates the Agreement or constitutes grounds for the institution to withhold payments. Some conditions worth considering include but are not limited to:

• Remaining enrolled at the institution;
• Remaining academically and athletically eligible;
• Complying with NCAA, conference, and institutional rules and requirements;
• Morality clauses including but not limited to inappropriate behavior that would bring the institution into public disrepute;
• Refraining from the commission of criminal acts; and
• Participation in team activities.

Dispute Resolution

Institutions may want to create an informal dispute resolution process in the event of a dispute, controversy, or claim related to the NIL Licensing Agreement. In the event the parties are unable resolve such a dispute, the dispute may be resolved though good-faith negotiation, mediation, or binding arbitration. Earlier this year, the American Arbitration Association published Due Process Guidelines for the Arbitration of Disputes over Sports Participation and Name, Image, and Likeness, which is a great resource to refer to when drafting arbitration language.