Educational resources created for college athletes have been extensive in the Name, Image, and Likeness (NIL) era. There have been materials developed to help athletes understand NIL laws, NIL contracts, intellectual property, taxes, and more. One area where college athletes have expressed a lack of sufficient educational material is in evaluating professional service providers. Because college athletes can sign NIL deals worth thousands or even millions of dollars, there is a significant need for professional services. Athletes can (and often should) work with attorneys, marketing agents, tax professionals, accountants, financial advisors, and branding experts. Here are 5 questions that all high school, college, and professional athletes should ask professional service providers before working with them:
Are you properly licensed to provide this service?
There is a lot that can be at play here, like state athlete-agent laws and state bar licensing and ethics rules. The important thing is to make sure that agents are appropriately registered as athlete-agents, lawyers are barred in the state where they are practicing, and financial service providers are CPAs or CFPs.
It is particularly important to ask this question of athlete-agents. There has been some confusion about the need for NIL agents to register as athlete-agents with appropriate state bodies. Even though they may not be negotiating professional playing contracts, NIL agents that negotiate endorsement deals still must be registered.
What is your experience working with athletes?
Just because someone hasn’t worked with athletes in the past doesn’t necessarily mean that they can’t in the future. But athletes have unique legal and financial needs. It is important that anyone representing you is appropriately equipped to do so. Professionals with experience working for athletes will generally be better suited to assist you.
What did you do before the NIL era?
This question goes hand-in-hand with the last question, and can be very telling. You should be cautious if you hear something like personal injury or criminal defense attorney. Just because someone has “NIL Agent” or “NIL Attorney” in their Twitter biography doesn’t mean that they have ever actually negotiated an endorsement deal. It would be best to work with professionals that have experience working in the sports industry or working with athletes. Some background working with the NCAA bylaws is helpful too!
Do you have any other relevant experience or education that qualifies you to represent me?
If you are hiring a service provider, you are paying for their expertise. Make sure they have it! Experience in the sports industry or college athletics is great. Experience negotiating contracts or having a law degree can be very helpful for agents as well.
What fees do you charge and how does that compare to other service providers in your industry?
We’ve all heard about NIL marketing agents charging a 30% commission to negotiate NIL deals. That is much more than the industry standard. Do your diligence and ask multiple service providers to get a better idea of what is fair. While each industry is different, there are some standard ranges for rates. Agents will typically charge about 10-20% of each deal, while financial advisors will typically charge about 1% of your portfolio per year. If someone is looking for substantially more than that, ask why, and consider hiring someone else.
The bottom line is this: ask as many questions as you need to until you are confident that a professional service provider is qualified to work for you. If you aren’t confident, look elsewhere. Moreover, if you are signing a contract for professional services, consider hiring an attorney to review the contract. Many professional service contracts (including agency contracts) are extremely one-sided in favor of the service provider. It is important to have a fair contract that does not limit your long-term rights.
