Before You Sign an NIL Agent, Read This
Disclaimer: This information is made available for educational purposes. It provides general information and is not intended to provide specific legal advice. This information should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction. We update the information as often as possible, but you should check with the Secretary of State’s office in each state for the latest information.
Signing with an agent who can help you find and negotiate NIL deals sounds exciting to many student athletes. After all, your time is limited and you probably don’t have much experience reaching out to brands to pitch yourself.
Do you need an agent for NIL deals?
The short answer: it depends. Agents are generally most helpful for well-known “star” athletes and athletes with large social media followings. If you feel overwhelmed by inbound NIL offerings, it may be a good time to search for an agent!
An agent can take pitching, contract negotiation, and chasing payments off your plate. A good agent will even increase your opportunities by finding you more NIL deals. Most of all, you’ll have someone to get you the best deal terms and highest offers.
However, not all agents are created equal. Some agents take excessive percentages of deals, even if you find the deal on your own. Predatory agents may just wait around until you get offered a deal and then swoop in for their revenue share. This is why it’s important to carefully review your contract before signing (5 important contract terms are listed in this post).
To hopefully ensure a positive agent-client relationship, be sure to do your research and talk with your agent before signing an agency contract. If possible, talk to the agent’s other clients to learn about their experience. Most importantly, talk with your agent virtually or face-to-face to see if it feels like a good fit.
Things to look for in your agency contract before you sign
Ideally, get an attorney to look at your agency contract before you sign it to ensure it protects your interests and not just your agent’s. While every contract is different, here are key pieces you absolutely must understand before signing.
- Term: how long does your relationship with the agent last? Does it automatically renew? Do you get to decide on renewal or is it the agent’s sole decision?
- Commission: what percentage of your paid opportunities will they take as a fee? Anything from 10-20% is typical on the marketing side, and 3-5% is what you should expect when it comes to deals with NIL collectives or revenue sharing contracts. If it’s more than that, I’d ask more questions about why it’s higher. It’s also important to note whether they want all monies paid through them first, meaning they’d have the third-party pay them, take out their percentage and then remit to you, or if you’ll get paid directly by the third-party and then remit the agent’s share to them. If you have to remit, how long do you have to do so?
- Scope of Representation: this might be called a number of different things in the contract, but what you’re looking for is what types of opportunities the agent will be taking their commission on. Most importantly, will they take a percentage of deals, autograph signings, speaking gigs, book deals, etc. that come directly to you and don’t involve them at all? About half the contracts I’ve seen take their percentage on any paid opportunity the client is offered. Personally, I wouldn’t sign that kind of deal, but you have to decide for yourself.
- Termination: how can the contract be terminated either you or the agent? It’s important you have the power to terminate, but these clauses are often one-sided. How much notice is required to terminate? What happens to deals you’re in the middle of completing or negotiating? (Spoiler alert: usually you still pay commission on those, which can be painful if it’s a long-term contract with the brand or other third-party.)
- Disputes: how will disputes between you and the agent/agency be handled? Is there a mediation or arbitration clause? Where does it say disputes will be heard? Usually this is wherever the agent/agency is located, which means you’d have to travel if you aren’t in the same city.
Once again, it’s advisable to have an attorney review the contract before you sign it. I have named only a few of the important terms, but there are other important considerations like indemnity clauses and confidentiality clauses. I don’t want to overwhelm you with legal jargon, so I simply encourage you to have an attorney review any contract you sign, including a contract with an agent.
Also, remember that having an agent doesn’t guarantee you will be offered more NIL deals. Every agent’s connections and success is different, as is the time they’ll devote to you and how proactive they will or won’t be in seeking out deals. That’s why it’s important to take the time to ask the right questions so you can make the best decision for you.
For even more on hiring an agent, there’s an entire chapter in The Athlete’s NIL Playbook.