Founder of HEITNERLEGAL — Sports, Entertainment, Trademarks, Copyrights, Business, Litigation, Arbitration
The Weekly Longer NIL Thought.
It caught my attention when I read part of a Margaret Fleming tweet this week that said, "Diego Pavia claimed a shirt with his name, image, and coined phrase wasn't authorized by him. The company selling the shirt says it was."
How could that possibly happen?
It's not surprising when you dig into the details, which many athletes fail to do before executing written contracts.
Yes, this is another opportunity for me to preach that it is very important for people to read and understand contracts before they execute them.
So, what happened in this particular instance?
According to Fleming's report, apparel company BreakingT released a shirt with Pavia's name and image and included his statement, "Vandy We Turnt," which he uttered after Vanderbilt beat Alabama when Pavia instantly morphed from someone few had even heard about to a quarterback that people were at least temporarily obsessed with.
Pavia discovered BreakingT's efforts to capitalize on Pavia's instant fame and wrote, "This is not me.. WE HAVENT WORKED OUT A DEAL! DO NOT ORDER."
There was one slight problem with his comment that he deleted soon thereafter.
He indirectly did work out a deal; he just was not aware of it.
BreakingT has a relationship with a group licensing company called One Team Partners and, according to BreakingT, Pavia had signed a general licensing agreement with One Team Partners that afforded BreakingT all of the rights and permissions it needed to produce and sell the shirt that pissed off Pavia. In fact, Pavia was entitled to a royalty on those sales, which is explained in the document he previously executed.
In the aftermath, I read a tweet from Ben Chase, Director of NIL Strategy at the University of Florida, shared on the subject, and thought it was insightful. He mainly highlighted the benefits and negatives of entering into a general licensing agreement with a company like One Team Partners.
"For companies like EA Sports, and the shirt companies, they can cut one massive check to the middleman, and keep it moving. For athletes, they're getting their NIL marketed to more licensees, and vendors," wrote Chase. "Our process at Florida when it comes to specialty co-branded (Gators IP and Athlete's IP) NIL apparel, is it goes across our licensing director's desk, my desk, and then if I was not made aware of the designs by either the athlete and/or agent prior to their submission for approval, I confirm with them before approval to go live. There have been many instances, including this week, where submissions or requests for NIL gear have been made that the athlete, or their agent or team, were not comfortable with it being produced."
In the past few years, I have personally counseled some more prominent players to avoid executing general licensing agreements such as the one offered by One Team Partners. In fact, if you try to redline and negotiate their template document, you are likely to be told that they will not accept any changes because they must keep the document standardized across all athletes. I recall attempting to negotiate in what I believed to be a reasonable provision -- "OneTeam shall not authorize any third party to use Athlete’s Identity without the prior written consent of Athlete, which consent shall not be unreasonably withheld or delayed." -- for a prominent athlete only for One Team Partners to reject the modification and the client ultimately determined it was not worth signing the contract.
Furthermore, these middlemen often take a big chunk (30% for One Team Partners) from athletes before you take into consideration the athletes' fees they must pay their agents as well as monies they need to set aside for taxes.
The reality is that someone like Pavia may net out better by having One Team Partners broker a deal with BreakingT and then BreakingT sharing with Pavia whatever small amount of royalties are due to him as opposed to Pavia attempting to handle the entire creation, manufacturing, distribution, and promotional process by himself. But the key here is that he should have known that he signed away these rights. Hopefully, other athletes are taking note.
To read more of the Newsletter, visit: https://www.linkedin.com/pulse/newsletter-image-likeness-vol-102-diego-pavia-provides-darren-heitner-wkk1e/
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