Newsletter, Image, Likeness Vol. 105: Should Some Athletes Opt Out Of The House V NCAA Settlement?

The Weekly Longer NIL Thought.

Over the past week, I have received many texts and calls from agents and lawyers asking whether their athlete clients should opt in or out of the House/Hubbard v. NCAA settlement and, if they are opting in, whether it should be for the House claim, the Hubbard claim, or both. If an athlete receives a notice about both cases, he/she is included in both and may be eligible to receive money from both settlements.

As I have discussed in the past, the settlements contemplate paying out more than $2 billion to over 100,000 athletes who participated in college sports since 2016. The payout mainly revolves around the use of athletes' NIL related to broadcasts, video games, and also what is being referred to as "third-party NIL."

That third-party NIL includes marketing opportunities, deals from entities like NIL collectives, and essentially all other forms of NIL dealmaking that fall outside the scope of what would traditionally be covered by group licensing. In speaking with a colleague, the House settlement would only account for this type of "third-party NIL" damages for athletes who "received compensation for use of their NIL after July 21, 2021." Thus, athletes who no longer played college sports as of July 21, 2021 would not be eligible for this important bucket of damages in the settlement. And that may be concerning for prominent athletes who participated in schools within the power conferences from 2016 through 2021.

These athletes may wish to more closely consider whether they should waive their right to opt into the House settlement and instead pursue third-party NIL damages. They could have an option of pursuing those claims through another pending lawsuit -- Fontenot v. NCAA -- which is a pending antitrust case against the NCAA in Colorado federal court. The Fontenot plaintiffs also seek revenue sharing above and beyond the aforementioned third-party NIL damages.

I have spoken with Garrett Broshuis , who is an attorney on the Fontenot matter and he would be happy to share some slides that he put together that further illustrate what is only briefly addressed above. He told me that the NCAA recently agreed that it would not oppose the joined of athletes into the Fontenot matter who opt out of the House settlement.

Projected Revenue Sharing Cap (Assuming Settlement Receives Final Approval) Is Projected To Be $20.5M In 2025.

Do Election Results Make Congressional Action More Likely?

Ted Cruz, who won his Senate race and is expected to have a key role in Congress (including as chair of the Senate Commerce Committee) over the next 4 years, is working on new NIL legislation. The new bill could be introduced in early 2025. The expectation is that such a bill will clarify that college athletes are not employees and preempt all existing state NIL laws.

"We’ve had productive, substantive conversations with members of both parties in recent months and are optimistic an opportunity exists to advance a targeted, bipartisan solution to ensure a stable, equitable, and sustainable future for college sports for years to come," said Tim Buckley, NCAA VP of External Affairs, on the election.

The reality is that the NCAA may not even need a bipartisan solution if the Republicans can organize on this issue in the House and Senate and receive President-elect Trump's support.

As a Democratic staffer on Capitol Hill wrote to Jesse Dougherty , "From a pure business sense, the NCAA should be doing backflips in Indianapolis."

South Carolina Edge Rusher Dylan Stewart In Talks With Collective On A Deal Worth $1 Million-1.5 Million.

Tyreek Smith Leaves Memphis Basketball Over NIL Compensation Discrepancy.

Wyoming Suggests It Will Implement Revenue Sharing Coupled With Support Through Its NIL Collective.

UNCW Hires Assistant Director Of NIL And Revenue Generation.

Final Thoughts.

That is it for Vol. 105 of Newsletter, Image, Likeness. Thanks to the more than 9,305 people who have subscribed to this newsletter thus far, and please feel free to share this free resource with others on LinkedIn or elsewhere.

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