8 hours ago5 min read

Wemby We Turnt : NIL Concerns Over Group Licensing in a Potential Post-House Era

With the House settlement being granted preliminary approval[i] earlier this month, many have begun to speculate about what name, image, and likeness (or NIL) rights will look like in practice for college athletes across the country.[ii] With the proposed settlement poised to shape the future of NIL in college athletics, it still faces several hurdles before becoming official, including a deadline for athletes to object or opt-out in January 2025 and a fairness hearing to be held by Judge Wilken in April 2025.[iii] In the meantime, some unlikely candidates have highlighted areas of concern within the NIL space that could potentially undermine the system as a whole: an NBA superstar and a two-star recruit who became an overnight sensation. While the players’ backgrounds could not be more different, their stories expose a common truth: an NIL system that does not offer athletes significant safeguards and protections is one that fails to adequately empower players.

Just last week, San Antonio Spurs star Victor Wembanyama sued a man in Texas for the unapproved use of his NIL to sell a wide variety of goods.[iv] According to the complaint, the defendant filed trademark applications for “El Wemby” and “Wemby’s World” in August of 2023. The defendant also registered a website in the name of the French talent, which sells items involving Wembanyama’s name, image, and likeness. Wembanyama requested a jury trial and monetary damages that reflect the harm to his NIL as part of his complaint.

These issues are not unique to the NBA, either. Fresh off a stunning upset of Alabama, Vanderbilt quarterback Diego Pavia, a former two-star recruit and juco transfer, took to X to tell potential partners to “hit [his] [a]gent” for NIL inquiries, ending his message with his now-famous line, “Vandy we turnt.”[v] Then, after a company named BreakingT quoted his tweet to promote their shirts, which bear Pavia’s image and viral quote, Pavia responded in a now-deleted tweet that dissuaded fans from ordering merchandise from BreakingT, claiming they did not have a deal in place. The company replied, stating that their shirts were approved and licensed by both Pavia and Vanderbilt via OneTeam Partners. OneTeam offers partner schools (and their players) the ability to enter into “Group Licensing Agreements,” which allow OneTeam to grant other entities and persons the ability to use a player’s NIL, negotiating “directly with brands on behalf of athletes to optimize collective value.”[vi] According to sources close to the situation, Pavia had signed such a deal.[vii]But Pavia is far from alone - OneTeam’s site boasts over 11,000 athlete opt-ins as part of their initiative with EA College Football, which offered players $600 and a copy of the game to sign their NIL rights over to EA Sports.[viii]

Assume for a second that (as in Wembanyama’s suit) Pavia was correct and BreakingT was improperly using his NIL to promote their products. As will likely be shown in the case of the Spurs superstar (should it proceed to trial), the calculation of damages to a celebrity’s NIL primarily involves questions as to the fair market value of their NIL, treating the parties as if they were in a hypothetical negotiation.[ix] However, a jury may also look at similar transactions involving the person in question in order to determine the fair market value of their NIL.[x] This may not be a problem for Wembanyama, who has been viewed as a superstar since entering the NBA and has signed sponsorships accordingly, with his reported total income sitting at over $901 million across 72 deals.

[xi]

But how will it impact lesser-known athletes, especially those who, like Pavia, signed group licensing agreements? It is easy to see how juries could be swayed by smaller group licensing deals (like the $600 EA Sports agreement) in determining the fair market value of a given athlete’s NIL, ultimately leaving players with a smaller amount of recoverable damages if they were to bring a claim of illegal NIL use against a company. This could pose a huge problem for group licensing agreement athletes, as their smaller NIL deals now could serve to dilute the fair market value of damages claims down the line when they have a viral moment that accelerates their fame.

So how do players, particularly college athletes, protect themselves in this unmarked landscape? First and foremost, athletes should meet with an attorney before signing any agreement, particularly a group licensing agreement. Consulting with someone who has contractual expertise will aid players in understanding the rights they are signing away and the potential outcomes of a given agreement.

While some schools check in with their athletes before a given NIL product goes live,[xii] players at other programs may not be so lucky. A lack of clarity around the extent of a player’s NIL licensing leads to situations like Pavia’s, where athletes are unaware that their rights are in use on an item and act to impede its sale, undermining the NIL system entirely. Second, prominent players should seek to negotiate group licensing agreements or avoid them entirely, as opposed to signing them under the assumption that they are fair deals. While group licensing may advantage players who lack name recognition (as they offer a flat rate to all members of a given partner institution), more famous players can spurn these deals in favor of pricier agreements, as was seen when Arch Manning was paid nearly $60,000 to appear in EA’s “College Football 25.”

[xiii] Wembanyama’s case offers further insight into the advantages of athletes holding out for larger NIL deals, as his luxurious sponsorships will help to buoy the Frenchman’s damages claim. Thus, it appears that adequate representation and fierce negotiation will be required for players to successfully traverse the current NIL space. It will be fascinating to see whether a finalized House settlement (or future NIL litigation) chooses to address issues with group licensing agreements or if they continue to leave them up to players to navigate.

Oliver Canning is a 2L at the University of Miami School of Law. He can be followed on Twitter (X) @OCanning and found on LinkedIn.