How would you structure the perfect NIL deal?

#1
clarencepeabody

clarencepeabody

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#1
Let’s say you’re a local/regional business owner, with strong ties to the university. You want exposure for your business, but deep down, your top goal is for the team to succeed. And you get a chance to sign a STUD athlete to a deal. What do you do?

Assuming the typical clauses/contingencies for behavior, etc, could you structure a contract that amortizes over time, in hopes that you can keep a kid from transferring?

In other words, we will pay you $10k per month for your freshman year, $20k per month soph, etc, etc, and then a $500k bonus on senior day? (All hypothetical numbers)

I just see a lot of these deals that are one-time payments (one of my clients did one with JT Daniels at the beginning of this season. I fought hard against it, and lost)—but it just seems like the way to combat the free-agency culture is to structure NIL contracts that include buyouts, contingencies, things like that.

What do you think?
 
#4
#4
Depends on their agent. Their agent is going to work a contract that favors them (the agent).
 
#5
#5
Sense it’s prohibited to tie a NIL deal to playing for any specific team, any multi year deal would still apply if they transferred.

“The following is prohibited under the NCAA’s interim policy and may negatively impact a student-athlete’s intercollegiate athletics eligibility: (1) NIL agreement without quid pro quo (e.g., compensation for work not performed); (2) NIL compensation contingent upon enrollment at a particular school; and (3) Compensation for athletic participation or achievement (this may enhance a student-athlete’s NIL value, but may not be the “consideration” for NIL compensation).”
 
#6
#6
clarencepeabody said:
Let’s say you’re a local/regional business owner, with strong ties to the university. You want exposure for your business, but deep down, your top goal is for the team to succeed. And you get a chance to sign a STUD athlete to a deal. What do you do?

Assuming the typical clauses/contingencies for behavior, etc, could you structure a contract that amortizes over time, in hopes that you can keep a kid from transferring?

In other words, we will pay you $10k per month for your freshman year, $20k per month soph, etc, etc, and then a $500k bonus on senior day? (All hypothetical numbers)

I just see a lot of these deals that are one-time payments (one of my clients did one with JT Daniels at the beginning of this season. I fought hard against it, and lost)—but it just seems like the way to combat the free-agency culture is to structure NIL contracts that include buyouts, contingencies, things like that.

What do you think?
Click to expand...

NIL rules prohibit that type of deal. Can't be contingent on performance.
 
#7
#7
LWSVOL said:
NIL rules prohibit that type of deal. Can't be contingent on performance.
Click to expand...

Just on-field performance? Or behavioral contingencies as well?

Can they do like I was talking about—amortizing the payout to increase every year (to encourage a player to avoid transfer)?
 
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#8
#8
clarencepeabody said:
Let’s say you’re a local/regional business owner, with strong ties to the university. You want exposure for your business, but deep down, your top goal is for the team to succeed. And you get a chance to sign a STUD athlete to a deal. What do you do?

Assuming the typical clauses/contingencies for behavior, etc, could you structure a contract that amortizes over time, in hopes that you can keep a kid from transferring?

In other words, we will pay you $10k per month for your freshman year, $20k per month soph, etc, etc, and then a $500k bonus on senior day? (All hypothetical numbers)

I just see a lot of these deals that are one-time payments (one of my clients did one with JT Daniels at the beginning of this season. I fought hard against it, and lost)—but it just seems like the way to combat the free-agency culture is to structure NIL contracts that include buyouts, contingencies, things like that.

What do you think?
Click to expand...

if you are not familiar with how the NIL is structured, recommend everyone read the information on the Tennessee site regarding NIL. Give you a better understanding of how it works.

Tennessee Athletics Name, Image and Likeness (NIL) Information & Guidance
 
#10
#10
clarencepeabody said:
Just on-field performance? Or behavioral contingencies as well?

Can they do like I was talking about—amortizing the payout to increase every year (to encourage a player to avoid transfer)?
Click to expand...

no. can't have anything to do with future..

to put simply, NIL allows players to use their name to promote products for others and get paid for it. Has nothing to do with how they perform in their chosen athletic events or their future. Just use their name and fame to promote products.

That would be my simple understanding of "what it is". Not incentive based at all.
 
#11
#11
LWSVOL said:
no. can't have anything to do with future..

to put simply, NIL allows players to use their name to promote products for others and get paid for it. Has nothing to do with how they perform in their chosen athletic events or their future. Just use their name and fame to promote products.

That would be my simple understanding of "what it is". Not incentive based at all.
Click to expand...

Ah. Thank you!
 
#12
#12
clarencepeabody said:
Just on-field performance? Or behavioral contingencies as well?

Can they do like I was talking about—amortizing the payout to increase every year (to encourage a player to avoid transfer)?
Click to expand...
Can't be contingent on the team he plays for either.
 
#14
#14
I guess it would depend on the type of business you have. Free meals at a restaurant, pay for signings at a collectors shop, free lease at a car dealership, appearance money at a retail store.

I’m sure there are much more creative ideas out there.
 
#15
#15
I’d include incentives for recruiting great players from other team to transfer here…to be paid under the table of course…
 
#18
#18
If I were Dolly and had spent a life time building my brand, I am going to be very careful who I choose to be the face of any facet of my business. Especially a teenager.

EDIT: Any deal would have strict and enforceable moral and behavior clause.
 
#19
#19
clarencepeabody said:
Let’s say you’re a local/regional business owner, with strong ties to the university. You want exposure for your business, but deep down, your top goal is for the team to succeed. And you get a chance to sign a STUD athlete to a deal. What do you do?

Assuming the typical clauses/contingencies for behavior, etc, could you structure a contract that amortizes over time, in hopes that you can keep a kid from transferring?

In other words, we will pay you $10k per month for your freshman year, $20k per month soph, etc, etc, and then a $500k bonus on senior day? (All hypothetical numbers)

I just see a lot of these deals that are one-time payments (one of my clients did one with JT Daniels at the beginning of this season. I fought hard against it, and lost)—but it just seems like the way to combat the free-agency culture is to structure NIL contracts that include buyouts, contingencies, things like that.

What do you think?
Click to expand...

I think only a few local businesses are going to incur those kind of expenses without the confidence that their business will get a return. And not too many recruits can create $10k per month of new business.
 
#20
#20
Every 5 star that comes to Tennessee gets 1 million dollars a month as long as there here.

Every all American that transfers to Tennessee gets 1 million dollars a month as long as their here.

Perfect…….I think it gets Tennessee most of the 5 stars and many all Americans.
 
#21
#21
GetYouSomeofThat said:
I think only a few local businesses are going to incur those kind of expenses without the confidence that their business will get a return. And not too many recruits can create $10k per month of new business.
Click to expand...
You’d be surprised. One of my clients paid JT Daniels 80k for about 30 minutes of his time to do some social posts and a photo shoot. Of course, it was the early days of NIL, and we were chasing the earned media that came with being the first brand to pick him up. But all the new deals we are doing are structured more like influencer contracts, and not just transactional ROI metrics applied. We will see how it shakes out.

Also (edit), none of my clients are “local businesses”, so you do have a point there.
 
#22
#22
The only thing I care about are wins.

So any deal I hand out would pay more for each win. Do a random radio or TV spot after each game and if it was a win we double it.
 
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