NIL Doesn’t Open The Door To Agents Offering Marketing Advances To College Athletes
It takes less than two months for five states to begin allowing athletes in their respective jurisdictions to monetize their names, images, and similarities for commercial purposes. These athletes can hire agents to assist them with the procurement and negotiation of marketing and advertising contracts. Agents begin to wonder what this graph will look like and whether they can use a tool commonly known as “Marketing Progress”.
What is a Marketing Advancement?
A marketing advance is a sum of money that a sports agent offers to an athlete for the stated purpose and is made available to be repaid by the player to the agent when the player earns advertising and marketing revenue. Often times the player off the field either never makes enough money to fully refund the agent the full amount of the advance, or as long as the player remains a customer, the agent chooses not to enforce the refund clause in a contract that includes marketing -Progress. Occasionally, such a contract stipulates that the player must reimburse the agent in full if the player ends the player-agent relationship.
Why NFLPA Contract Advisors Shouldn’t Provide Marketing Benefits To College Athletes
Many sports agents, especially those representing NFL players, have asked me if they should be comfortable offering college athletes marketing advances that they can make up for against future NIL activity. The answer is that they would be wise to stay away from such activities.
One #NIL question many NFL agents have asked is, “Can we provide marketing advances to college athletes?”
Aside from state / fed laws + NCAA regs, the answer is likely no.
It appears to be an incentive for the player to enter into an SRA with the agent later.
– Darren Heitner (@DarrenHeitner), May 8, 2021
If such activity were intended to jeopardize a player’s eligibility, it would surely be in violation of the NFL Players Association’s policy on contracting agents. At the very least, such a payment would likely be viewed as an incentive payment for the player to enter into a standard agency agreement at a later date, which the regulations prohibit.
Section 3 (B) (2) of the Terms prohibits Contracting Agents from “providing or offering money or other objects of value to a player or prospective player in order to induce or encourage such player to use his services”.
Section 3 (B) (3) of the Terms prohibits Contract Advisors from “providing or offering money or other valuables to any member of the player’s or prospective player’s family or any other person in order to induce or encourage such person to recommend the Services of the contract advisor. “
How did NFLPA contractors get away with marketing advances to professional athletes?
Marketing advances have been upheld in NFLPA arbitration and are not per se deemed to be inappropriate incentives in violation of NFLPA regulations. However, timing is usually of penultimate importance when it comes to classifying marketing progress as something other than an incentive.
A marketing advance has not been interpreted as an unreasonable inducement under the rules for an agent to enter into a standard agency agreement with a player if the advance is provided at the same time as the parties enter into the standard agency agreement. An NFLPA contracting advisor is not known to have been disciplined for providing a marketing advance while it was provided when the Standard Agency Agreement was signed or thereafter.
If an agent were to give a college athlete a marketing advance, it would be good to do before entering a standard agency agreement, thereby exposing the agent to risk of exposure. For example, under Florida’s Name, Image, and Likeness Law, a university must not prevent an athlete from obtaining professional representation by a sports agent to provide compensation for use of the athlete’s name image or likeness. However, agents are not permitted to enter into broader representation agreements with college athletes, such as the standard NFLPA Representation Agreement, or the college athletes’ remaining eligibility to participate in intercollegiate track and field competitions will be forfeited.
That is where the friction lies. A marketing advance must be offered to the college athlete at the same time or after the player signs a standard agency agreement. Hence, an agent who offers such a marketing advance to a college athlete runs the risk of being disciplined by the NFLPA.
This should be sufficient reason to discourage the agents from offering and providing marketing advances to college athletes. However, agents may also violate state athlete agent laws, as well as federal law on the responsibility and trust of sports agents, by engaging in such activities.
Darren Heitner is the founder of Heitner Legal. He is the author of How to Play the Game: What Every Sports Lawyer Needs to Know, published by the American Bar Association, and is an associate professor at Levin College of Law, University of Florida. You can reach him by email at [email protected] and follow him on Twitter @DarrenHeitner.