NIL Agents: The Good, the Bad, and the Unregulated 

We live in a world where college athletics and commercial interests are more connected than ever thanks to the NCAA lifting its restriction on Name, Image, and Likeness (NIL). By navigating and capitalizing on these new unique opportunities on behalf of student-athletes, NIL agents have played a critical role in the growth that we’ve seen in this space. However, not all NIL agents are equal, and some may not have the necessary experience to represent these student-athletes adequately.

Recent examples highlight how NIL agreements can become complicated for student-athletes, underscoring the need for clear communication and structed guidelines. Arizona Cardinals Wide Receiver, Marvin Harrison Jr.’s NIL dispute with Fanatics, which occurred when he was a student at Ohio State, led to a lawsuit over an alleged breach of contract. It illustrates the challenges athletes face when navigating agreements without traditional representation. The case of quarterback Matt Sluka’s NIL-related  departure from UNLV also raises questions about the clarity and execution of these deals.

Without a thorough understanding of contract negotiation, financial management, brand strategy, and more, NIL agents may lock athletes into exploitative contracts, mismanage funds, or even damage the student-athlete’s brand through poor representation choices. These potential outcomes underscore the need for qualified, trustworthy representation in the NIL space to safeguard athletes’ rights and long-term interests.

There is a patchwork of regulations governing how NIL agents can operate. Some states have specific licensing and qualification standards, whereas others impose minimal requirements or have no regulatory measures, leaving universities to regulate In Arizona, there are no fees for registration and no surety bond required by the state for individuals to represent student-athletes.

Furthermore, universities in Arizona have different requirements for NIL agents seeking to work with their student-athletes. At Arizona State University and Grand Canyon University, the Athletic Departments provide forms specifically mentioning NIL representation, indicating that these institutions require NIL agents to register before engaging with student athletes. However, the University of Arizona only provides a registration form for “Athlete Agents” and “Financial Advisors,” with no specific mention of NIL agents, suggesting less oversight in this area. Northern Arizona University does not have a publicly available NIL agent registration process, leaving it unclear whether any formal requirements exist for interacting with student athletes in the NIL space.

By comparison, California operates under the Miller-Ayala Athlete Agents Act, which mandates agents registering with the California Secretary of State. This law broadly defines “Athlete Agent” and  “Endorsement Contracts” in ways that strongly suggest NIL agents must be registered. This law requires the filing of a California Athlete Agent Disclosure Statement, pay a registration fee, and secure a $100,000 surety bond to ensure ethical conduct. While California universities like University of Southern California  and the University of California, Los Angeles do not have separate registration procedures for NIL agents, they require agents to submit proof of registration with the California Secretary of State, including the completed disclosure form, before engaging with student-athletes.

Unlike the fragmented approach seen at the collegiate level, professional leagues such as the National Basketball Association (NBA) and the National Football League have established rigorous agent registration processes. To represent athletes in these leagues, agents must meet strict requirements, including holding a college degree, passing a league-specific exam, undergoing background checks, and attending compliance seminars overseen by the respective Players Associations. Designed to protect the athletes, these regulations ensure that agents meet high ethical and professional standards before negotiating agreements on behalf of athletes.

In stark contrast, Arizona’s lack of uniform NIL agent regulations leaves student athletes more vulnerable. Without a standardized registration process or protective measures like surety bonds, athletes risk entering agreements with underqualified or unethical representatives. Safeguarding students’ rights and long-term interests is essential; therefore student-athletes and families should consider the following when evaluating prospective NIL agents:

Verify Credentials and Experience: If applicable, confirm that the NIL agent is registered in your state or your institution. However, registration alone does not guarantee expertise. Seek NIL agents with proven negotiation, marketing, or financial management backgrounds.

Understand Fee Structures: Ensure you fully understand the NIL agent’s fee arrangements. Do they charge a flat fee, a percentage of earnings, or a combination? This is important to know prior to signing into an NIL representation agreement.

Beware & Ask for Help: Be wary of NIL agents that guarantee deals, pressure you into signing quickly, or lack a clear strategy for finding and managing NIL opportunities. Have a qualified attorney review any representation agreements or NIL contracts before signing to protect your rights.

Scalability: Assess whether the NIL agent can help guide long-term aspirations in sports or beyond. An effective agent should not only secure short-term deals but help the student athlete build a sustainable brand to extent into a professional career or post-athletic endeavors.

As for the businesses involved or looking to get involved in NIL, successfully navigating the space requires more than just cutting the check. Establishing a meaningful partnership with a student athlete demands careful consideration of brand alignment, contract transparency, and legal compliance. And let’s face it, not all student athletes are also good at marketing.

Without proper diligence, businesses may subject themselves to reputational harm, contract disputes, or ineffective marketing strategies. The lack of standardized NIL agent regulations in states like Arizona further complicates this landscape. Partnering with athletes represented by inexperienced or unethical agents can lead to financial losses, missed opportunities, and legal pitfalls that could tarnish a company’s brand.

To ensure a successful NIL strategy, businesses should consider the following:

Vet NIL Agents & Athletes Carefully: Research the agent’s past deals and professional background. Just as athletes must evaluate agents, businesses should confirm that the athlete’s representation is reputable.

Understand the Contract & Compliance Risks: Ensure that the NIL agreement includes clear terms outlining the deliverables, payment structure, exclusivity clauses, and termination conditions.

Consult with a Legal Expert: This will help mitigate risks involved. Make sure that the legal expert is familiar with the relevant NIL regulations and practices.

Monitor Performance & ROI: Establish key performance indicators (KPIs) to measure the success of the partnership. Whether through social media engagement, brand awareness, or direct sales, tracking impact ensures that partnership deliver tangible business value.

By prioritizing clear communication and ethical engagement, businesses can build a mutually beneficial relationship with student-athletes that bolster their brand and supports the athletes’ success. As the NIL landscape continues to evolve, the businesses that act decisively and strategically will position themselves at the forefront of this emerging market.

K.J. Russell is an associate attorney in Fennemore’s Business & Finance practice group. His practice spans multiple industries, including technology, real estate, as well as sports and entertainment. K.J also counsels clients in the evolving space of collegiate athletics name, image, and likeness (NIL). His work involves advising collectives, athletes, and agencies on eligibility compliance and the negotiation of branding, sponsorship, and marketing agreements. K.J. is a registered NIL agent.

David McCarville is a legal technologist and partner at Fennemore, the fastest-growing AM Law 200 law firm in the country. He Chairs Fennemore Labs, the firm’s technology committee and leads groundbreaking initiatives to integrate advanced legal technologies, particularly AI, into the practice of law. His expertise extends to blockchain and cryptocurrency and he is an adjunct professor at the Sandra Day O’Connor College of Law at Arizona State University where he teaches a course on blockchain and cryptocurrency law. Photo is courtesy of Fennemore.