Sports

NIL Doesn't Open The Door To Agents Offering Marketing Advances To College Athletes

Remember: a marketing advance must be offered to the college athlete at the same time or after the player signs a standard representation agreement.

By  
on

(Image via Getty)

There are less than two months until five states begin allowing athletes within their respective jurisdictions the ability to monetize their names, images, and likenesses for commercial gain. Those athletes will have the ability to hire agents to assist them with procuring and negotiating marketing and endorsement contracts. Agents are starting to question what that representation will look like and whether they will be permitted to use a tool that is commonly referred to as a “marketing advance.”

What Is A Marketing Advance?

A marketing advance is a sum of money that is offered and provided by a sports agent to an athlete with the stated intention that it be paid back by the player to the agent as the player earns endorsement and marketing income. Often, the player either never earns enough money off-the-field to fully reimburse the agent the full amount of the advance, or the agent, as long as the player remains a client, chooses not to enforce the reimbursement provision in a contract containing the marketing advance. Occasionally, such a contract will stipulate that the player must fully reimburse the agent if the player ends the player-agent relationship.

Why NFLPA Contract Advisors Shouldn’t Provide College Athletes With Marketing Advances

Many sports agents, in particular those who represent NFL players, have asked me whether they should feel comfortable providing college athletes with marketing advances to be recouped against future NIL activity. The answer is that they would be wise stay away from such activity.

Sponsored

If such activity would serve to jeopardize a player’s eligibility, then it would certainly violate the NFL Players Association’s Regulations Governing Contract Advisors. At a minimum, such a payment would likely be deemed an inducement payment for the player to enter into a standard representation agreement at a later date, which is prohibited under the regulations.

Section 3(B)(2) of the regulations prohibits contract advisors from “providing or offering money or any other thing of value to any player or prospective player to induce or encourage that player to utilize his/her services.”

Section 3(B)(3) of the regulations prohibits contract advisors from “providing or offering money or any other thing of value to a member of the player’s or prospective player’s family or any other person for the purpose of inducing or encouraging that person to recommend the services of the Contract Advisor.”

How Do NFLPA Contract Advisors Get Away With Providing Marketing Advances To Professional Athletes?

Marketing advances have been upheld in NFLPA arbitration and are not deemed to be, per se, improper inducements in violation of NFLPA regulations. However, timing tends to be of penultimate importance concerning classifying the marketing advance as something other than an inducement.

Sponsored

A marketing advance has not been interpreted as an improper inducement under the regulations for an agent to enter into a standard representation agreement with a player if the advance is provided at the same time that the standard representation agreement is entered into by the parties. No NFLPA contract advisor is known to have been disciplined for providing a marketing advance as long as it was provided when signing the standard representation agreement or afterward.

If an agent were to provide a marketing advance to a college athlete, it would be well before executing a standard representation agreement and thus putting the agent at risk of exposure. For example, under Florida’s name, image, and likeness law, a university may not prevent an athlete from obtaining professional representation by a sports agent strictly to secure compensation for the use of the athlete’s name image or likeness. However, agents are not permitted to enter into more expansive representation agreements, such as the NFLPA’s standard representation agreement, with college athletes or else the college athletes will forfeit their remaining eligibility to participate in intercollegiate athletics competitions.

Therein lies the rub. A marketing advance must be offered to the college athlete at the same time or after the player signs a standard representation agreement, and thus an agent offering such a marketing advance to a college athlete runs the risk of being disciplined by the NFLPA.

This should be enough of a reason to cause agents to keep clear from offering and providing college athletes with marketing advances. That said, agents would also potentially be violating state athlete agent laws as well as the federal Sports Agent Responsibility and Trust Act by engaging in such activity.

Darren Heitner is the founder of Heitner Legal. He is the author of How to Play the Game: What Every Sports Attorney Needs to Know, published by the American Bar Association, and is an adjunct professor at the University of Florida Levin College of Law. You can reach him by email at heitner@gmail.com and follow him on Twitter at @DarrenHeitner.

Topics

, ,