College athletics has been in a state of constant regulatory change since the NCAA’s decision to permit athletes to monetize their name, image, and likeness (NIL) nearly three years ago. In addition to several rounds of NCAA NIL guidance, there have been legislative changes at the state level, introduced federal legislation, and multiple lawsuits that continue to impact intercollegiate athletics. While the NCAA and its autonomy conferences have agreed to a settlement in the House case, all involved parties are hoping for more stability in the legal landscape. As universities, conferences, and the NCAA are waiting for more definitiveness, two top players are now engaged in NIL litigation.
Although college athletes have been able to receive compensation for their NIL and are set to receive a portion of conference media revenue after the House settlement goes into effect, there have been various legal challenges that have come with the increased opportunities. Two high-profile football stars, Marvin Harrison Jr. and Jaden Rashada, are currently involved in legal disputes centered around NIL contracts.
Fanatics’ Lawsuit Against Marvin Harrison Jr.
Apparel manufacturer Fanatics has filed a lawsuit against first-round NFL draft pick and former Ohio State star Marvin Harrison Jr., alleging that Harrison Jr. breached his licensing and promotions contract. Fanatics is seeking actual and punitive damages in addition to equitable relief. According to the complaint, Fanatics and Harrison Jr. entered into an initial contract in March 2023 that was set to last one year and expire before Harrison Jr. entered the NFL draft. Upon realizing that Harrison Jr. had more potential, Fanatics approached Harrison Jr. regarding a long-term, more substantive agreement.
According to Fanatics, the parties formalized their negotiations in the form of the “Binding Term Sheet,” which it claims Harrison Jr. signed on May 16, 2023. Fanatics signed the Binding Term Sheet two days later, on May 18. Subsequently, Harrison Jr. refused to fulfill his obligations of the alleged contract, eventually publicly rejecting the contract. Harrison Jr. stated publicly that he never had a trading card deal with Fanatics and that when Fanatics approached him, he said “we’re not taking that deal, we’re not signing that deal.” Harrison Jr. then told Fanatics if they would like to continue any business relationship with him, they must match competing offers that he had allegedly received.
The facts in the case are disputed—more information may come to light through discovery and other steps in the litigation—with Fanatics saying there is a signed binding contract, while Harrison Jr. saying he never signed an agreement. This litigation will hinge on the question of whether Harrison Jr. agreed to the contract, thereby assenting to the terms of the Binding Term Sheet. If he did so, Harrison Jr. may be on the hook for the damages Fanatics is seeking.
Probable Next Steps in the NIL Litigation Process
Marvin Harrison Jr. is going to have an uphill battle in defending this lawsuit. While it remains to be seen what arguments he chooses to pursue, the argument that he did not enter into a binding contract with Fanatics has one major hurdle—Harrison Jr. accepted payments from Fanatics. Regardless of the arguments he chooses to make, it is possible that the litigation could be moved to a different venue, such as federal court. Likewise, depending on the language contained in the disputed Binding Term Sheet, the parties could move the dispute to mediation or arbitration.
Jaden Rashada’s Lawsuit Against UF Head Coach and Boosters
Harrison Jr. is not the only athlete engaged in an NIL-related legal dispute. Former University of Florida (UF) football recruit Jaden Rashada is suing head coach Billy Napier, Marcus Castro-Walker, the former UF Director of NIL, and Hugh Hathcock, a UF athletics booster, for fraud, fraudulent inducement, tortious interference, and negligent misrepresentation. Rashada originally had committed to the University of Miami with a promised NIL contract of $9.5 million but was convinced to flip his commitment to Florida by Napier and Hathcock. According to the complaint, Napier, Hathcock, and other individuals with ties to the UF-affiliated NIL collective gave Rashada various promises and assertions to induce Rashada to flip his commitment to UF. This “pressure campaign” included besting Miami’s $9.5 million NIL offer by more than $4 million, with one of $13.85 million, including a $500,000 signing bonus.
After successfully convincing Rashada to decommit from Miami, the complaint alleges that the defendants failed to honor their financial commitments to Jaden, continuing to promise that the money was coming, stringing Jaden along while making sure he kept his commitment to Florida. After there was some hesitation from Rashada on signing day, Napier allegedly personally called Rashada and promised that $1 million of the promised money would be given to him once he signed his National Letter of Intent with UF. Relying on Napier’s promise, Jaden was induced to sign the Letter of Intent, yet in the weeks afterward no payment was made, and more false promises were given. Rashada eventually grew tired of the empty promises, decommitting from Florida a month later. He ultimately attended Arizona State University for his freshman year of college and transferred to UF’s SEC rival, Georgia, this past NCAA transfer window.
Rashada’s Claims
Rashada’s claims against Napier and the UF boosters are for fraud and fraudulent inducement. He claims that the UF-affiliated individuals fraudulently induced him to abandon his NIL opportunities with Miami-affiliated boosters. Furthermore, by promising dollar figures to Rashada that the UF-affiliated individuals allegedly knew they could not meet, Rashada claims they defrauded him.
Notably, Rashada did not file a suit for breach of contract—otherwise, his claims are limited to fraud, fraudulent inducement, and tortious interference. Napier and the UF-affiliated individuals are likely to move to dismiss Rashada’s suit. There are a variety of arguments that they could make. It is likely that they will argue that the facts do not meet the elements of fraud and fraudulent inducement. Specifically, that there was no knowledge on the parties that they would not be paying Rashada and that they did not intend to deceive him.
Key Takeaways:
Despite the uncertainties in both cases, there are clear takeaways for all collegiate athletes.
Competent Representation is Critical
Particularly under the facts of the Fanatics agreement with Marvin Harrison Jr., it is apparent that he did not understand what he may have been agreeing to. Throughout his negotiations with Fanatics, he was represented by his father, NFL Hall of Famer Marvin Harrison Sr. While Harrison Sr. had a prolific collegiate and NFL career in his own right, his skills negotiating and understanding NIL contracts may not be as refined as his ability to catch a football. Unfortunately, choosing not to retain legal counsel for these contract negotiations seems to be to Harrison Jr.’s detriment.
All Contracts Should be in Writing
As an NCAA athlete, oral promises and assertions should not be sufficient for committing to a particular college. If coaches, boosters, or others promise you something, it is best to have a written, signed, compliant, and enforceable contract. While the allure of an NIL contract or other lucrative promises may be enticing for an amateur athlete who has likely not received substantial compensation before, it is important to protect yourself with a well-drafted contract.
Understanding the Bargained for Exchange
Likewise, athletes should be aware that contracts work in both ways and that your signature is a tool that may bind you to contractual obligations as well. When two parties agree to a contract, they each owe the other something. For NIL contracts, it is typically a payment (from sponsors) and a license to use the athlete’s NIL or sponsored social media posts (from the athlete). Once a contract is signed and consideration is paid to the athlete, the athlete has the obligation to fulfill their commitments—whether that be allowing the sponsor to utilize their NIL or by posting specific content on their social media accounts.
Long-Term Effects of NIL Contracts
As demonstrated by Fanatics’ lawsuit against Marvin Harrison Jr., NIL contracts signed by collegiate athletes can potentially adversely affect them at the next level. NIL agreements made in college are often for terms that last beyond an athlete’s collegiate eligibility.
For complex, high-value, and long-term NIL contracts, it is advisable to have an experienced attorney review any agreements to notify and advise you of the legal obligations and ramifications that may lie within. Moreover, it is recommended to work with counsel in conjunction with an NIL agent, as both are equipped to provide different services.
