Who You Gonna Call? UNM Student-Athletes May Need Lawyers, But Lawyers Don’t Need Them
Most people hate lawyers.
Until they need one.
In a time where colleges universities require student-athletes to sign contracts to receive name, image and likeness (NIL) compensation, these 18- to 23-year-olds may need a lawyer to explain what they are signing.
Many of these NIL contracts have complex legal terms that most people would not understand, let alone college-students eager to receive a check.
These contracts are often one-sided agreements drafted by the university’s legal counsel.
Darren Heitner is a well-respected sports law attorney who currently represents many college athletes in negotiating and signing NIL deals. He writes in his newsletter that many of these university revenue-sharing contracts "read like employee handbooks complete with buyout clauses, liquidated damages clauses, claw back clauses, termination provisions tied to injury status and academic performance requirements.”
Recently, CBSSports.com’s Chris Hummer reported that many of these NIL licensing agreements include monetary fines imposed on the student-athlete if a player loses team equipment or if the student-athlete tests positive for drugs or alcohol. Hummer also reported that Florida State University’s revenue sharing contract contains a term that allows FSU to stop paying the student-athlete if he or she suffers an illness or injury “which is serious enough to affect the value of rights granted to the school.”
Another example of a one-sided NIL contract is the Big Ten’s form Memorandum of Understanding Licensing Agreement, parts of which are believed to be used by some Big Ten schools in the actual licensing agreements student-athletes sign.
This termination clause states that if the contract is terminated, the college or university has no obligation to pay the athlete. However, the athlete may be required to repay some of their NIL compensation earned within 30 days. Do they really think a 19 year-old, (even with some basic financial literacy courses) will put their NIL earnings in trust and then later pay the university back if they breach the contract?
I guess we’ll find out.
To be fair, it’s not known whether the University of New Mexico’s NIL contracts contain similar one-sided terms.
UNM has produced 13 pages of completely redacted contracts.
The University of New Mexico NIL Licensing Agreement is 10 pages long. All 10 pages look like this. These were produced to The Pit Press on June 26 in response to public records requests submitted to UNM on June 11.
Who Is Explaining NIL Contracts to Student-Athletes?
Some student-athletes in Power 4 schools, particularly the top earners in NIL, get legal representation, such as Heitner, in negotiating an NIL deal.
But the number of student-athletes with representation at Group of 6 schools like UNM is believed to be very small.
“I think it’s very few of them,” Dr. Sam Ehrlich, a professor at Boise State University and expert commentator on sports law said when he joined The Pit Press Live! last week. “Especially at the mid-majors. You’re only seeing agent representation for a lot of the top-level players. From an agent’s perspective, if you’re going to be signing an athlete who’s only going to get a few hundred dollars in NIL money, it’s not worth your time.”
In April, Kurt Roth said most UNM men’s basketball players who signed NIL deals with the 505 Sports Venture Foundation last season did not have representation when signing an NIL deal with 505 SVF.
“We paid kids $100,000 or $50,000,” Roth said. “For the most part, they said, ‘OK, where do I sign?’”
University Educational Programs Are Substitutes for Agent Representation
College universities are helping student-athletes find other NIL deals for additional compensation beyond their revenue sharing contracts.
“You’re seeing at some schools where the schools are taking the role of acting as marketing agents for a lot of these athletes in finding NIL deals,” Ehrlich said.
UNM is one of the schools that has early plans to facilitate third-party NIL deals for its student-athletes.
“Since we’re not up against that cap, if we have a partner that wants to support a student athlete, we can facilitate how that works and help with that, whether its through the university or just connecting the parties” said UNM Deputy Athletic Director Ryan Berryman when he joined The Pit Press Live! on June 19.
In addition to helping athletes look for NIL deals, UNM has developed the Lobo Institute for Excellence (LIFE) program, a tool designed to provide student-athletes with education about NIL deals that also includes creation of a marketing plan to help UNM student-athletes find additional NIL compensation.
“I sense an immense amount of obligation to educate our student-athletes on financial literacy, on tax implications, on how to leverage their brand,” UNM Athletic Director Fernando Lovo said when he joined The Big Mountain Podcast in June and described the LIFE Program. “We have the opportunity right now to be very hands-on with our student-athletes because the process is all in-house. It’s all transparent.”
Some details about the LIFE Program are available in the Draft Meeting Minutes from UNM’s March 6 Athletic Council Meeting.
According to the Draft Meeting Minutes, the program gives student-athletes support and resources on several topics, including “financial literacy, compliance reporting, contract vetting and tax implications.”
The LIFE Program also appears to include a component where students from the UNM Anderson School of Management help student-athletes further promote and market their names, images and likenesses. Finally, the LIFE Program also features an opportunity for UNM student-athlete to have a one-on-one meeting with an NIL Agent.
New Mexico is a state with no major professional sports teams. The market for licensed sports agents is almost non-existent.
According to State Bar of New Mexico Membership Demographics, there are 5,418 active attorneys in New Mexico, but only 42 of them reported practicing primarily in the area of sports law.
If UNM student-athletes cannot get legal representation in NIL deals, whom can they call– Lobo Louie, perhaps?
While there may be a shortage of agents interested in helping student-athletes in NIL negotiations, UNM is ahead of the game in providing its athletes with tools and resources through the LIFE Program.
