This article originally appeared in the August 9 issue of Arkansas Business.
It didn’t take much time for student-athletes to get in on the money — or gift cards or merchandise — once the NCAA removed its regulations against the commercial use of their name, image and likeness.
University officials and legal minds advise caution, but the athletes are signing up in droves to put their NIL to work for them, for once. In Arkansas, student-athletes were set to profit from NIL thanks to a new law that was set to go into effect Jan. 1, 2022. Several other states had similar legislation in place or in the works, so the NCAA Division I Board of Governors rescinded its restrictions nationwide this summer.
The University of Arkansas in Fayetteville had begun preparing for the new system in March by hiring former track and field standout Terry Prentice as the university’s senior associate athletics director for athlete brand development. The university created a webpage in May called Flagship that lists the rules and regulations of NIL and the student-athletes’ requirements for reporting any signed contracts.
Flagship partnered with the Walton College of Business and the university’s Office of Innovation & Entrepreneurship to help the student-athletes maximize their earnings potential and learn about the business world they are now entering. But the Razorbacks athletic department didn’t expect to be dealing with NIL until next year.
“For us it was a surprise because we thought it was going to come a little bit later and we were prepared to start in January,” Prentice said. “I think we were more prepared for this. It doesn’t mean we are perfect. We are going to continue to evolve as we move along. We are going to embrace this and not run from this.”
Arkansas State University in Jonesboro has a webpage called Red Wolves Ventures dedicated to the NIL issue. Red Wolves spokesman Jerry Scott said NIL would be supervised by Josh Daume, the senior athletics director for compliance, but the university may eventually create a specialized position.
“We monitored it and will continue to monitor it,” Scott said.
Sign Me Up
Shortly after the NIL business opened, Razorbacks wide receiver Trey Knox signed with PetSmart and has posted several times on Twitter advertising its products; the star of the posts was really Knox’s dog, Blue.
J.J.’s Grill in Fayetteville has been active, scooping up football, baseball and men’s and women’s basketball standouts, each of whom made short videos on social media. In one, Razorbacks pitcher Connor Noland throws a baseball, emblazoned with J.J.’s logo, that breaks a plane of glass through special effects and, in another, basketball player Amber Ramirez dribbles around in an empty gym.
Men’s basketball player Davonte “Devo” Davis has signed agreements with J.J.’s, Ozark Insurance and Gwatney Chevrolet. (Also see: FAB&T Banks on Devo.)
Davis and other Razorback athletes, such as linebacker Grant Morgan, are working with representatives to help with NIL deals.
No Free Meal
Another notable sponsorship was when Wright’s Barbecue in Johnson (Washington County) announced it was partnering with all the Razorbacks’ offensive linemen.
None of the sponsored players wear Razorbacks paraphernalia, nor are their images recorded at venues associated with the university.
“I think it is a cool thing to do; fun stuff to do with the student-athletes,” said Jordan Wright, the owner of Wright’s Barbecue. “It is just awesome that the kids who work so hard can receive some free benefits. To be able to reward them and help the business and get some publicity is really exciting.”
Wright clarified that the benefits aren’t actually free because NIL sponsorships require the student-athletes to perform a service. But Wright said an athlete making an Instagram post or a tweet isn’t really work.
“That, to me, is something that doesn’t cost them anything,” Wright said. “I say it’s free considering they can do it with their name, image or likeness. They own that. It’s free to them.”
Wright didn’t disclose how much he pays the players he sponsors, other than to say it ranged from $100 to several hundred and also included gift cards. Prentice said the university reviews each contract to make sure each is in compliance with the law, but otherwise the university said contracts are protected by federal privacy laws.
“It is a great opportunity for the student-athletes to grow their brand,” Prentice said. “It is a great opportunity for the business to use people who are at the peak of their careers. In between, we just have to make sure that it is above board.”
Business Perils 101
Few people in Arkansas may know more about sports contracts than Judy Henry, the chair of the Sports Law Practice Group at Wright Lindsey Jennings law firm in Little Rock.
Henry, a former collegiate gymnast, is married to a former UA football player and is the mother of another; additionally, she is Razorback football coach Sam Pittman’s agent. (See Attorney Judy Henry Understands Twists of Fate.)
“My concern is that student-athletes are not prepared for the onslaught of contacts and presentations,” Henry said. “For student-athletes who don’t have representation, I implore them that they need to find an experienced advocate who knows what it is to negotiate a contract.”
Prentice said the university is trying to tie the NIL opportunities with the overall college learning experience. The university is considering starting an NIL class, open to all students, that explains personal publicity rights.
“We are trying to make this as robust as possible,” Prentice said.
There are restrictions with NIL: Athletes can’t advertise guns or alcohol or adult businesses. Otherwise, Prentice said, he and the university don’t have veto power over sponsorships. He does encourage the athletes to put some thought into every potential partnership.
“We educate them on, ‘Hey, make sure that company aligns with your values,’” Prentice said. “We strongly encourage them to do their own homework and really research the companies.
The same goes both ways, because those companies are researching the student-athletes. They have to realize they are in the real world of business now.”
That is part of Henry’s concern. For most student-athletes, whose careers will end after college, getting a few bucks or a gift card can be a passing part of the college experience, but she doesn’t want student-athletes to be shortsighted.
“Most of the student-athletes don’t have a professional career ahead of them; they are not Moses Moody,” said Henry, referring to the former Arkansas star who was selected by the Golden State Warriors in the first round of the NBA draft in July. “They may not have an opportunity to capitalize on the name, image, likeness later. I get that.
“They have to be cautious about NIL for the same reasons a first-rounder needs to be cautious. There is nothing that is free about name, image and likeness.”