Athletics Veritas is a weekly series aimed at helping higher education executives, faculty, and other stakeholders stay tuned in on trending national issues impacting college athletics, especially NCAA Division I.
What do College Sports and the NIL World have in common with LIV Golf Tour Player Contracts?
More than you might think.
Executive Summary
Draft LIV contracts include a variety of provisions that have common ground with the NIL world.
NCAA, University and Athletic Department policies govern branding and use of logos, media relations, where and when the athletes can compete -- similar themes addressed in LIV tour player contracts.
Incentivizing LIV tour players to recruit other golf pros to join the LIV tour has a similar vibe as NIL agents’ intent to sign one student-athlete to do their inside-sales job to recruit their teammates.
NCAA schools are tasked with managing, monitoring, and educating hundreds of athletes on the NIL front whereas LIV Tour—and its abundance of resources—only monitors a few dozen golf professionals.
Although permissible in LIV player contracts, NIL contracts can’t include financial incentives for on-field achievement.
The rise of the LIV Tour in relation to the PGA Tour may portend a similar fate for the current NCAA governance structure—the rise of a new governing body.
According to an article published last month, the Wall Street Journal staff “…reviewed a draft contract that LIV, the Saudi backed golf tour, has offered players. The terms shed new light on both the courtroom battle and the requirements that players agreed to when they signed on with the Saudi-backed upstart. It isn’t clear whether such terms are included in all LIV contracts or can be negotiated by individual players.”
The contract reportedly includes several provisions that may be novel for the professional golf ranks. These same provisions, though, may echo the same issues and provisions addressed in NIL contracts or reflect the types of activities and details addressed by NCAA rules, university policies, and athletic department handbooks.
In terms of the LIV Golf Tour player contracts, The Wall Street Journal reported the following provisions in the draft LIV player contract:
Players are supposed to wear LIV apparel, even when playing in non-LIV events.
Players are instructed to refrain from giving interviews without approval and sign away their media rights tied to LIV events.
Players agree to assist in recruiting other players to LIV, when requested.
Players can play in non-LIV events but can’t miss LIV events.
Players need approval for most of the logos they wear and branded products, “like coffee mugs,” that they use at events.
Players are awarded a $1 million bonus for winning any of golf’s four major championships.
The LIV players’ apparel requirements are noted multiple times throughout the contract reviewed by The Journal. It says during any “League Activity, Team Promotional Activity or any other Covered Golf Activity” the player shall only wear appropriate “Team Apparel” and not display badges or logos without obtaining approval. There is an exception that the player can wear the brand of a third-party supplier of golf equipment on the right side of their hat. The contract also said that during events the player is to “refrain from using or otherwise appearing with or using any product (e.g., any hard goods like a coffee mug) containing a logo without approval.”
In terms of the NIL landscape, college athletes are beginning to land apparel-specific deals—sometimes with their school’s primary apparel partner and, in other cases, with the rival of the university’s apparel partner. The regulatory lines drawn around NIL continue to evolve but institutions have long held that their college athletes are expected to wear---during official team activities – the apparel of the university’s apparel partner. Schools have also spelled out that student-athletes could wear the competing brand, as part of an NIL deal, outside of official team activities.
Apparel companies’ influence in college sports is well chronicled and now elite high school athletes that may have their own NIL apparel deal coming out of high school may be guiding their recruitment, in part, with a better understanding on if, when, and where they could wear their apparel partner’s gear at a particular school. The LIV tour clearly has apparel usage and branding top of mind with its tour players and NIL is entering that space more and more.
“The Player agrees to wear LIV Golf branding (or other branding supplied by the League Operator) at each Tournament and each other golf tournament you participate in anywhere in the world,” the LIV contract states. At the 2022 British Open, where LIV golfers were allowed to participate because it is overseen by the R&A, most did not appear to wear LIV paraphernalia. The exception was Patrick Reed, who wore several LIV Golf logos.
The LIV contract provision that dictates whether LIV players may provide exclusive interviews or commentaries or entering into agreements involving exclusive interviews presents a far more restrictive landscape than what media outreach college athletes may pursue. College athletes are using the NIL space to leverage their brand with media---by agreeing to exclusive interview, radio and tv show appearances in exchange for NIL compensation.
Moving from media to recruiting, the LIV contract incentivizes players to recruit other professional golfers to the LIV tour. Although the financial incentives tied to that recruitment are unknown, this is another similarity to NIL deals in a way. Student-athletes, especially in the social media influencing realm of NIL, could have financial incentives of signing up their teammates for financial reward.
Interestingly, the incentive for college athletes to recruit teammates to NIL deals can be seen as a workaround for NIL agents. As it stands, the primary exception to the NCAA’s agent rules is specific to NIL agents---individuals who are prospecting NIL deals for college athletes in exchange for a percentage of the revenue from landed deals. However, NIL agents are often the same people or the same agency that represent professional athletes in contract negotiations, draft preparation, pro team tryout coordination, and commercial marketing opportunities at the pro level.
As it stands, NCAA rules continue to forbid its athletes from engaging in athletics for purposes of professionalizing by agreeing to be represented by an agent to represent the athlete for these professional sport services. Herein lies one of the many conundrums of NIL – a lower-in-demand student-athlete might be charmed into signing with an NIL agent only to realize, in hindsight, that the agency signed them to get to a teammate.
Like college athletes’ status with the third-party companies in NIL deals, LIV golf tour players are considered independent contractors with the LIV tour—not employees. Although some believe that college athletes may be legally classified as employees one day, NIL deals, like most branding or endorsement contracts, would have the company treat its “endorser” as an independent contractor.
Another similarity to NCAA and athletic department policies and LIV tour player contracts relates to if and what events---athletic or NIL--- the athlete may participate in. The LIV Tour permits its tour players to play in non-LIV events, provided that they don’t conflict with LIV events, while PGA Tour players have to request a release to compete in conflicting non-Tour events.
But the LIV contract also requires its Tour players to participate in all of its events---which will encompass 14 in 2023 whereas the PGA Tour’s membership rules require tour players to participate in at least 15 tour events among over 40 events annually. In college sports, NCAA rules specify playing and practice rules—including game or event limits by sport—that ultimately guide when, where, and how often a college athlete may compete. Further, NCAA rules dictate if, when, and how many student-athletes from the same college team may compete on an “outside team” or in outside competition separate from the NCAA school’s schedule.
At the campus level, Athletic Department policies applicable to student-athletes may also regulate expectations for student-athletes’ participation and attendance for contests, practices, training, and team travel as well as outline when and where NIL Activities may occur and not conflict with official team activities.
The LIV Tour’s regulation around its Tour players’ branding overlaps in a few respects with the NIL landscape. For starters, universities have had to decide if, and to what extent, it would permit its student-athletes to use university marks and logos in any way in the athletes’ NIL activities. Anecdotally, the regulation around university mark usage ranges from a strict “no” to “feel free.” Further, the use of university logoed apparel in the NIL realm was, and still is, a frequent mini crossroads testing the university’ comfort level with brand erosion through its athletes’ using logos in social media influencing and other NIL related outreach with companies that have no rights to the marks.
The LIV Tour’s policies of restricting and monitoring branding around its Tour players is a far easier undertaking than what NCAA schools are facing purely from a numbers standpoint. The LIV Tour, which has significantly more resources than any single Division I school let alone the entire NCAA membership, oversees only a few dozen professional golfers with respect to all of these Tour activities. By contrast, a single Division I school -- with far less staff available to steward the NIL arena for its athletes--- may be trying to monitor, educate, and guide over 500 student-athletes’ as it pertains to NIL.
Lastly, the LIV Tour provides $1 Million in incentives to any of its Tour players winning one of golf’s four major championships. NCAA amateurism rules continue to restrict any “pay for play” such as winning a marquee championship or individual game---yet NIL, and specifically the companies bringing NIL deals to the student-athletes’ doorstep, may be infusing those NIL contracts with financial incentives that put the student-athletes’ NCAA competition eligibility at risk. This risk is one of several reasons NCAA schools want to screen the NIL contracts of their student-athletes before the student-athlete signs on the dotted line---to prevent and red-line a “pay for play” clause that would jeopardize an athlete’s ability to play for their school.
Athletics Veritas is presented for information purposes only and should not be considered advice or counsel on NCAA compliance matters. For guidance on NCAA rules and processes, always consult your university’s athletics compliance office, conference office, and/or the NCAA.
