What to Look for in an NIL Contract: 5 Key Issues for Athletes and Businesses

March 25, 2026 - Ashley Long
Name, Image, and Likeness (NIL) contracts may appear straightforward, with athletes promoting products in exchange for compensation. However, the legal structure behind them is more nuanced. NIL agreements blend intellectual property rights, contract law, brand protection, institutional regulation, and even reputational risk management. As the value of these deals rises and compliance scrutiny intensifies, the enforceability and longevity of NIL agreements depend less on headline compensation and more on how key clauses are structured. Below are five essential NIL contract clauses that every athlete and business should consider.

1.  Scope of Rights 

At its core, every NIL agreement is a license of intellectual property. The primary legal question is not whether rights are granted but rather how broadly those rights are defined. An NIL agreement may include rights relating to an athlete’s name, image, likeness, voice, signature, social media handles, biographical information, catchphrases, or logos and their personal branding marks. Contracts that fail to clearly define these licensed assets create ambiguity.

Athletes should assess whether the license is exclusive or non-exclusive, limited in duration or perpetual, permits derivative works, and allows sublicensing. Overly broad language can restrict future monetization opportunities for athletes.

From a business perspective, the clause must ensure that the athlete has the authority to grant the licensed rights and that no conflicting sponsorships or institutional restrictions undermine the agreement. A nightmare scenario for a business is paying for rights that the athlete cannot legally grant.

2.  Compensation Structure

Compensation provisions are equally significant because they define how financial risk is allocated. NIL agreements may include fixed fees, milestone payments or performance-based incentives tied to deliverables or engagement metrics. Athletes should ensure that there are clear payment timelines, defined performance standards, and objective benchmarks. Athletes should also evaluate whether compensation is contingent upon subjective standards or whether clawback provisions are narrowly tailored.

Businesses, on the other hand, must ensure that payment obligations are tied clearly to defined deliverables and that a mechanism exists to address nonperformance or breach.

Both parties must also ensure that deliverables are not based on the athlete’s athletic performance, as this is prohibited and can void the NIL agreement.

3.  Clear Deliverables

Many NIL deal conflicts arise not from bad faith but from ambiguity. NIL agreements should specify the requirements for each deliverable. For example, if a student-athlete is asked to post content on social media, a well-drafted agreement should specify the number of posts to be made, the platforms to be used (e.g., TikTok, Instagram, Twitter), deadlines, and content format. Open-ended language regarding expectations is a red flag for athletes. Additionally, businesses can benefit from defining clear deliverables, as this helps protect their investment and ensures brand consistency.

4.  Term and Termination (Including Moral Clauses)

Termination and morals clauses introduce reputational considerations. Businesses typically seek broad rights to terminate if conduct harms their public image. Athletes should understand how broadly that language is written and whether they are entitled to payment for work already completed if the deal ends early. Both sides should also address what happens to content after termination.

5.  Institutional Compliance and Conflict Management

Finally, NIL agreements must account for school and conference rules. Athletes may be required to disclose agreements, avoid conflicts with team sponsors, or comply with state laws. Businesses should confirm that required disclosures have been made and that the athlete remains eligible to compete. Overlooking this layer can create serious complications.

As NIL continues to evolve, thoughtful contract drafting is essential on both sides of the deal. The strongest deals are not just about compensation but are built on clarity, balance, and an understanding of how risk is shared between the parties. For questions or more information on NIL Contracts, please contact Ashley Long.