Power, Paychecks, and Pressure
The amateur era is over. With the NCAA's $2.8 billion settlement now approved, student-athletes are no longer playing only for scholarships. Real money is on the table, and so are real legal consequences.
This shift isn't just about opportunity. It's about risk. Athletes are signing contracts that look more like professional agreements than college paperwork. These deals control payment, performance, image rights, and mobility. Without legal support, what looks like a win today could quietly lock down your future.
Shifting the Landscape
Starting in the 2025–26 season, schools in the Power Five conferences can pay athletes up to $20.5 million per year. This revenue sharing is capped at 22% of a school's average athletic income. By 2034, that number rises to $33 million.
The deal also includes back pay, but only for those who claim it. Athletes who played between 2016 and 2024 must file a valid eligibility form to receive their share. The process isn't automatic. Legal help can ensure claims are filed correctly and on time.
To manage all of this, a new College Sports Commission has been created. It's responsible for enforcing NIL rules, overseeing compliance, and reviewing third-party deals. That includes evaluating fairness and market value, possibly using AI.
Meanwhile, big questions remain. Some experts argue that athletes should now be considered employees under labor law. Others warn that unequal pay structures could trigger Title IX lawsuits if gender equity isn't addressed. As the legal structure evolves, athletes must stay alert to how these debates may impact their rights.
Clauses Redefining the Game
NIL agreements are changing fast, and the fine print is getting heavier. For many athletes, these contracts now mirror employment deals more than simple endorsement paperwork. The language used by schools and collectives can affect how and whether you get paid, who you can work with, and how much control you have over your name, image, and movement.
Each clause matters. Understanding the key terms can protect your value on and off the field.
Performance-Based Triggers
As compensation is no longer guaranteed, many NIL contracts tie payment directly to playing time, starting status, or medical eligibility. If you're benched, redshirted without approval, or held out by staff, even for non-performance reasons, your pay may stop. These terms are often buried deep in the agreement.
Sponsorship Limitations
Some contracts limit your ability to work with brands that compete with school sponsors. That could mean passing on major opportunities. Even if a brand aligns with your values or audience, you might be forced to turn it down if the school already has a deal in place. These clauses can stay in effect year-round, even off-season.
Conduct Requirements
Many agreements now include morality or conduct clauses. These sections restrict the types of products you can promote, such as alcohol, gambling, or political causes, and may even limit what you say online. If the school believes your content hurts its reputation, you could face financial penalties or removal from the program.
Control of Identity and Persona
Athletes are being asked to license more than just their names. Some contracts include rights to your tattoos, nickname, voice, or even digital likeness. In some cases, these rights extend well beyond graduation. Without clear limits, you may lose control over how your image is used—and who profits from it.
Transfer Barriers
Schools are now using buyout clauses and payment termination provisions to discourage transfers. You might be required to repay a portion of your NIL earnings if you enter the transfer portal or accept an offer from another program. In some cases, payments stop the moment transfer discussions begin.
NIL contracts aren't just legal documents; they shape careers, brands, and life after college. In this short segment, CBS highlights how one college athlete turned her NIL deal into a strategic business opportunity and why guidance matters more than ever.
Leverage Lost Without Legal Review
Most NIL contracts are drafted by institutions with one goal in mind: protecting their interests. Athletes who sign without review often take on all the risk without realizing it. These deals may seem standard, but the details can create long-term traps, especially if you plan to transfer, build a brand, or keep control of your image.
This indicates that a legal review isn't just helpful, but very essential.
Buyouts and Liquidated Damages
Some NIL deals include steep financial penalties for transferring. These buyout clauses can require athletes to repay up to 50% of what they've earned, or more. In some cases, the repayment kicks in even if you're forced to leave due to injury, coaching changes, or limited playing time. Without clear terms, one decision could cost thousands.
Indefinite Licensing of NIL Rights
Contracts may grant schools the right to use your image, voice, name, or tattoos forever. This isn't just about promotional posters. It can include merchandise, digital content, and AI-generated likenesses. If the contract doesn't set clear limits, you may lose control of your identity long after you've left campus.
Termination Power Imbalances
Schools often build in broad rights to cancel NIL agreements "for cause" but keep athletes locked in on their side. This means they can end the deal if they think you've violated a vague rule, while you may be stuck with no exit path. Some contracts even allow payment to stop immediately after a minor dispute.
Automated Gatekeeping
All third-party NIL deals over $600 now go through a system called NIL Go. This clearinghouse checks if the deal is "legitimate" and meets market value standards. Behind the scenes, AI could flag or block deals unfairly. If your offer is delayed or denied due to flawed data or hidden bias, there may be little recourse unless you know how to challenge it.
Roles That Protect or Overpromise
Having support in your corner is critical, but not all support offers the same protection. NIL deals are legally binding, and trusting the wrong person can lead to long-term consequences. Athletes often rely on agents for guidance, but legal protection requires a licensed attorney. The difference matters.
Agents
Agents help athletes grow their brand and secure deals. They often manage endorsements, public image, and sponsorship negotiations. But unless they're also licensed attorneys, agents can't offer legal advice. That means they can't interpret contract clauses, spot hidden risks, or represent you in disputes.
Some agents act like they handle everything, but reviewing legal terms isn't part of their job. If they overstep, you may be the one left exposed.
Lawyers
Sports lawyers are trained to do what agents can't. They review, revise, and negotiate contracts. They know how to structure deals to protect your rights, limit school control, and ensure you stay compliant with NCAA, state, and federal regulations. They're also the only ones who can defend you in arbitration or legal proceedings if things go wrong.
A lawyer won't replace your agent. But without one, your NIL team isn't complete.
Agreement Pitfalls
Some collectives and booster organizations are offering NIL representation agreements with vague language and restrictive terms. These documents may lock you into long-term commitments or give away rights you didn't mean to surrender. Even worse, some promise guaranteed payments that come with strings attached in fine print.
Always have an attorney review any representation contract before you sign, no matter how friendly or "standard" it seems.
Securing More Than Just a Deal
The NIL era has transformed what it means to be a college athlete. You're no longer just competing; you're contracting. And every term you sign carries weight far beyond your playing days.
This moment is powerful, but also personal. It's about your name, your voice, and your freedom to grow. Contracts that look like opportunities today can become liabilities tomorrow. You must ask the right questions, get every term in writing, and push back on vague morality clauses, aggressive buyout penalties, or open-ended rights to your image.
Before signing anything, make sure you've had the contract reviewed by a qualified attorney. Understand who controls your NIL, what happens if you transfer, and whether the agreement limits your ability to build your brand beyond school walls. Verbal promises won't protect you; clear, written terms will.
Every athlete deserves more than a seat at the table. You deserve leverage, protection, and a deal that works for your present and the future. Traverse Legal helps athletes take control of their contracts and protect what matters most.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
