While NCAA athletes have been cleared to profit from their name, image, and likeness (NIL), that doesn't mean that schools have to play ball.
In December 2021, Michigan running back Blake Corum launched an NFT collection hoping to cash-in on national exposure amid the College Football Playoff — but the NFT does not have his team's logo.
Because Corum and the NFT provider, Draftly, didn’t receive clearance from Michigan to use the school's official marks or uniforms, Corum isn’t pictured in an official Michigan uniform on the NFT. Instead, blue is pasted over the signature blue and yellow striped Michigan helmet, and Corum’s jersey appears more generic.
“We've had various conversations with different rights-holders in the space to make sure that for any future drops for Blake or for [Notre Dame quarterback] Jack [Coan] or any of our other athletes, we'll actually be able to use the logos and trademarks directly within our NFTs,” Draftly CEO Nick DeNuzzo told Yahoo Finance (video above). “For our future NFTs, all of our fans and customers should be able to expect the full Michigan logo, the trademarks. And that’s something our team will work very diligently on over the next several months to make sure it’s live.”
Despite the hiccup, Corum’s collection is indicative of a larger movement by college athletes into the NFT space. Heisman Trophy winning Alabama quarterback Bryce Young partnered with New York Times best-selling artist Arturo Torres for an NFT project while Shareef O’Neal, the son of NBA legend Shaquille O’Neal, has NFTs listed for as much as $2 million.
Deloitte predicted that the overall sports media NFT market will reach $2 billion in transactions during 2022.
“What I really see is we’re in the early stages, the early days of NIL rules and laws within the United States, within college sports," DeNuzzo said. "And we're also in the early days of NFTs right now. We all saw the massive NFT wave that started last March, the NFT summer that happened where JPEGs were going for absurd valuations. And now we’re going to move into a phase where these NFTs are going to be associated with utility and value.”
In any case, Draftly’s failure to secure Michigan’s official marks and make an authentic collectible item provided a stark reminder that institutions, not players, still own the keys to unlocking athletes' full earning potential in the NIL era.
'We're not going to necessarily just award a trademark...'
The NCAA’s interim policy that allows players to profit from their NIL went into effect on July 1 — after 24 states passed their own laws — and the organization is still sorting out logistics. In the meantime, an emerging industry has provided college athletes with new revenue streams.
Most universities own the trademarks to their logos and other marks and therefore can decide whether athletes wear team issued gear in an advertisement, NFT project, or any other form of NIL deal. The official NIL page at Michigan states athletes can’t use the school's official marks without appropriate licensing approval.
Individual permission to use Michigan’s official logo hasn’t been granted yet, a university official told Yahoo Finance. While that could change in the future, it’s far easier to gain logo access via a group licensing agreement, which several Michigan football players have utilized to sell jersey tees.
Kurt Svoboda, Michigan’s Associate Athletic Director for External Communications & Public Relations and a member of Michigan’s NIL review committee, told Yahoo Finance that the school expects access to Michigan’s mark will become more widely available as the NIL market matures. Athletes still likely won’t have access to the mark in industries where the university already has brand partners, though.
“We've heard from so many different trading companies, or individuals and companies who want to get into trading cards,” Svoboda said. “Well, the University of Michigan already has existing relationships with trading card companies and so we're not going to necessarily just award a trademark or licensing to a competitor of somebody who's already a partner. That wouldn't make a lot of sense for everybody involved.”
Some schools have been more lenient with approvals. Syracuse University allowed basketball player Buddy Boeheim, son of long-time head coach Jim Boeheim, to use the university’s block “S” logo on merchandise in July. Other players in Syracuse’s ecosystem, including members of the football team, have also listed clothing with the university’s official mark.
Syracuse Associate Athletic Director Mark Wheeler noted that the university isn’t clearing all deals that feature its logos, adding that the goal is to be “as student-athlete friendly as possible."
“It's an opportunity not just to help the student athletes benefit from the university's marks and logos and colors but really it's a way that the institution can benefit as well,” Wheeler told Yahoo Finance. “And potentially the third-party entity, whoever that is, can benefit as well."
Challenges along the way
Even a more lenient NIL policy wouldn't eliminate all potential headwinds, however.
Sports NFTs based on game moments require proper licensing for the photo or video of the player, and schools aren’t always the sole owners of sports multimedia assets surrounding their student athletes. Compound that third-party clearance with more partnership regulations surrounding teams sportswear sponsors, and the path to an NIL project becomes murkier.
The multitude of loops to pass through has held college athletes back from working with some of the top names in the billion-dollar sports NFT industry.
Caty Tedman, the head of partnerships at Dapper Labs, said her company won’t enter an agreement unless it has all the licensing rights it would want from a given player such as the ability to use the team's marks.
“If I was a student athlete I may say, if we work together because you have rights and I have rights, maybe actually we get a better deal or we have a better product, or whatever that looks like,” Tedman said. “It's really hard for a student-athlete to do that. It really has to be the team around them to do that.”
Dapper Labs, which created NBA Topshot and is also working with the NFL, hasn’t yet found the ideal partner at the college level. Those partners would likely be schools and conferences.
“The big question is going to be... What about the rest of the teams or the teams who don't really have social media followings?" Syracuse's Wheeler said, adding: "That’s where you're going to see team-wide deals that are struck, more department-wide deals that happen. And I think you'll see different schools try to be as involved as they possibly can in making those things happen."
Another option for student-athletes is to go at it alone, but most college players don’t have the name recognition or social media following to pull off a large-scale deal without identifying themselves as an athlete for their school.
Consequently, college athletes looking to monetize their personal brands with NFTs find themselves in a familiar position: Looking at the NCAA and schools to give them a larger piece of the profit pie that is collegiate athletics.
Josh is a producer for Yahoo Finance.