Business and Legal Insights

The NIL marketplace has matured quickly, and the range of representation arrangements available to athletes has grown with it. For many student-athletes, these agreements now involve real money: recurring institutional revenue-share payments, multi-year endorsement commitments, and representation contracts that can run well past a college career. Requirements and industry practices also vary significantly by state and by agency, so there is no single national standard. Given the dollar figures and the duration involved, it is worth consulting a lawyer or other qualified advisor before signing rather than after, when terms are far more difficult to unwind. Below are broad areas worth understanding and, where appropriate, confirming with the specific agent, advisor, and jurisdiction involved.

1. Confirm the agent’s licensing or registration status. Most states regulate athlete agents under a version of the Uniform Athlete Agents Act, commonly referred to as the UAAA, and some now have NIL-specific registration regimes layered on top. Florida, for example, requires athlete agents to register biennially with the Department of Business and Professional Regulation under Chapter 61-24, Florida Administrative Code, which encompasses the obligations set forth in Chapter 468, Part IX, Florida Statutes. Additionally, Louisiana recently created a dedicated online portal for agent registration and training. The agent registration requirements vary considerably by state, and not every jurisdiction has an NIL-specific licensing statute, so athletes should confirm the actual rule that applies. Where a state does require registration, an agent’s registration or license number should be a matter of public record and reasonable to request.

2. Understand that state law follows the athlete, not just the agent. An agent may be validly registered in one state and not another. Many statutes require registration in the athlete’s home state or the state where the school is located. Reciprocity for registration exists in many states but is not universal. Athletes who reside in a state that is different than the state where the institution is located should ask which state’s law governs the relationship. These issues can be further complicated by player movement, including transferring to a new institution located in another state with different registration requirements.  Athletes should inquire how these changes could impact their agreement and be confident that the answers confirm that regulatory issues impacting their agent will not adversely affect their value and marketability.  

 3. Get everything in writing. In states with athlete agent statutes, written contracts typically must contain specific disclosures: that signing may affect NCAA or school eligibility, that the athletic department may need to be notified, and, in some states, a right to cancel the contract within a short window without penalty. The specific disclosures and cancellation period, if any, vary by state, so athletes should confirm which state law will govern the relationship and what that law requires, rather than assume a standard set of terms that applies everywhere.

4. Agent commissions/fees caps.  The U.S. Congress and State legislatures are actively discussing capping agent commissions in response to a few press reports describing agreements with unusually high fee percentages. Currently, there are no limitations on agent fees/commissions, as agent fees are a negotiated contractual term and there is no industry standard, with fees varying widely by agency and market. It is critical that the athlete understands the percentage being charged and the length of the agent/agency agreement. Agreements that extend well past an athlete’s college eligibility, or that lock in long-term revenue splits before the athlete’s market value is established, are worth an independent legal review before signing — not because such terms are improper, but because their long-term impact can be difficult to evaluate at the outset.

 5. Know what you are paying - $$$ - your agent. An athlete’s NIL-related income can come from several places: institutional revenue-share payments made directly by the school under the House settlement framework; deals arranged or facilitated by the institution, a school-affiliated collective, or a designated marketing partner; and opportunities the agent personally identifies and negotiates. Currently there is no legal requirement that commissions be tiered or capped by source, and many agencies charge a flat percentage across all NIL generated income regardless of a deal’s origin. It’s critical to know exactly how the commission fee structure applies to the various sources of NIL income. Athletes or their counsel should negotiate a fair rate that aligns with industry comparables and reflects the value an agent brings to a transaction.  Before signing a representation agreement, Athletes should know what they are agreeing to pay their agent, and this knowledge will minimize subsequent disputes about fees.

6. Watch for conflicts of interest. An agent, marketing company, or collective representative who is simultaneously being paid by the brand, the collective, or the institution has a conflict that should be disclosed in writing. Dual representation without disclosure is one of the most common grounds for discipline under state athlete agent statutes.

7. What happens if your agent goes in the transfer portal? Athletes often build a relationship with one specific agent rather than the agency, as a whole; therefore, it is important to understand how the representation agreement handles an agent’s departure. Agencies have a legitimate business interest in retaining client relationships they’ve invested resources to build, and agents themselves are frequently bound by separate non-solicitation or non-compete agreements with their agency, arrangements that are common and often enforceable. Athletes are not automatically entitled to follow a departing agent, and attempting to do so in violation of the agency’s own agreements can expose the athlete to a dispute they didn’t cause. What athletes can do is ask, before signing, how the contract is structured: whether it binds the athlete to the agency regardless of personnel changes, whether there is any mechanism for the athlete’s input if their agent leaves, and whether the contract can be assigned by the agency to a different company or new ownership without the athlete’s consent. Knowing the answer in advance is the goal.

 8. Know the prohibited categories where they apply. Many state statutes bar endorsement deals in certain categories (commonly alcohol, tobacco, gambling, adult entertainment, and controlled substances), though the specific list and its existence vary by state. An agent who pitches a deal in one of these categories without addressing whether it’s permissible under the applicable state law is asking the athlete to take on unreviewed risk.

9. Minors typically need more than a signature. For high school athletes, parental or guardian consent is expressly required in many states, and in others the issue is one of general contract law as to whether a minor athlete can legally enter a binding contract. The age of majority is typically 18 years of age; however, there are a few exceptions, and this can vary from state to state. The specific requirement depends on the state; therefore, it’s worth confirming rather than assuming a single standard applies.

10a. Federal and State law. The federal Sports Agent Responsibility and Trust Act (“SPARTA”) makes it unlawful for an agent to make false or misleading representations to induce a student-athlete to sign, or to fail to disclose that signing may cause loss of eligibility. It also gives institutions a private right of action against agents who cause them harm, a reminder that misconduct toward an athlete can create liability beyond the athlete-agent relationship itself.  New legislation regulating college athletics is currently being debated federally and at the state level.  Athletes need to make sure they know how any changes in the law might apply to an existing or a future NIL agent agreement.

10b. Watch the Protect College Sports Act (“PCSA”) moving through the U.S. Senate. The most significant pending development in this space is the PCSA, introduced in the U.S. Senate as an effort to establish a federal framework governing intercollegiate athletics. The bill is not yet law, has not passed either the Senate or the House of Representatives, and the existing terms could still change before final passage. If enacted in its current form, the PCSA would directly affect several of the topics discussed above:

• Agent registration and fees. The bill would require agents to register with a state and certify to the NCAA that they are registered before they can lawfully represent a student athlete and it would cap agent fees at 5 percent. It would also prohibit agents from making fraudulent statements in their registration and from misrepresenting NIL deals to entice student athletes to enroll or transfer.  The PCSA also gives athletes a private right of action to bring cases in court against agents who violate these rules, which is a more direct enforcement mechanism than exists under most current state regimes.
• Transfer restrictions and in-season coaching changes. The bill would substantially alter the current transfer process and limit student athletes to one transfer without losing athletic eligibility and restrict certain football personnel from becoming the head football coach at a different school under specified conditions (Lane Kiffin Rule). 
• Targeted antitrust exemption. The bill would grant a narrow antitrust exemption to the NCAA and College Sports Commission to enforce eligibility, transfer, and revenue-sharing mandates, and preempt the current patchwork of state NIL laws meaning several of the state-specific points discussed above could ultimately be superseded by a single federal framework if the bill becomes law.

Because the PCSA remains pending and could change before becoming law, athletes, agents, and agencies should treat these provisions as unsettled.

Where do we go from here: The regulatory landscape is still moving. Between the House settlement’s revenue-sharing framework and pending challenges to what constitutes an “affiliated entity”, ongoing federal proposals like the PCSA, and state law changes for agent registration, the rules governing who can represent an athlete, and how, are changing rapidly. A contract that was standard eighteen months ago may not reflect current requirements. NIL agreements are commercial contracts, and the agent relationship underlying them is, in many states, a regulated one. Confirming registration status where required, understanding whatever disclosures apply, and having independent counsel review anything with a long term or a large dollar figure are ordinary due diligence, especially in a market whose rules are still being built in real time. For questions related to NIL Agent Agreements, please reach out to Jordan Clark, a partner in Shutts & Bowen LLP’s Orlando office.

This article is intended for general informational purposes and does not constitute legal advice. Student-athletes and families should consult qualified counsel regarding their specific circumstances and applicable state law.