When a company offers you a Name, Image, and Likeness (NIL) deal, it’s easy to get caught up in the excitement. But before you sign anything, it’s critical to understand the basics of NIL contracts. One overlooked clause could cost you money, your eligibility, or your reputation.

Here’s what every athlete should know before putting pen to paper.

1. Payment Terms

The first thing athletes look for is the number—but how you get paid matters just as much.

• How much will you earn? Is it a flat fee, commission, or performance-based?

• When will payments be made? Immediately, monthly, or after deliverables are completed?

• What method is used? Direct deposit, check, or another system?

Always confirm payment schedules in writing.

2. Scope of Work

Your responsibilities should be clear. The contract should spell out exactly what you’re agreeing to:

• Number of social media posts or appearances

• Deadlines for content

• Brand guidelines you must follow

• Event attendance requirements

Vague obligations can lead to disputes down the line.

3. Use of Your Name, Image, and Likeness

The contract should define how the company can use your NIL:

• Where (local ads, national campaigns, social media, TV, etc.)

• How long (just for one campaign, or indefinitely?)

• In what context (can your image be altered, resold, or reused?)

Make sure you’re not giving away rights forever for a one-time payment.

4. Exclusivity Clauses

Some contracts prevent you from working with competitors. For example, if you sign with one sports drink, you may be prohibited from promoting another. Exclusivity can limit your opportunities, so understand the restrictions before agreeing.

5. Compliance Requirements

Every NIL deal must align with:

• NCAA rules (for college athletes)

• State athletic association policies (for high school athletes)

• School disclosure requirements

Failure to comply can cost you eligibility. Your contract should be reviewed for compliance before signing.

6. Duration of the Agreement

How long does the deal last? Can it be renewed automatically? Long-term contracts can be risky, especially if your marketability changes. Make sure you have a clear exit strategy.

7. Termination Clauses

Both sides should have a way to end the agreement. Look for:

• How much notice is required

• Whether there are penalties for ending early

• What happens to unpaid money or unfinished obligations

This protects you if the partnership doesn’t work out.

8. Dispute Resolution

Contracts should include how disagreements will be handled. Will disputes go to court, arbitration, or mediation? Knowing this upfront saves headaches later.

9. Taxes and Expenses

Remember: NIL income is taxable. Clarify:

• Are you responsible for reporting and paying all taxes? (Usually, yes)

• Will the company reimburse you for travel or production costs?

Plan ahead so you’re not surprised at tax season.

Final Takeaway

NIL contracts are more than a signature and a payday—they’re legal agreements that shape your opportunities, eligibility, and financial future. Before you sign, make sure you understand payment terms, your responsibilities, how your NIL will be used, and your rights if the deal ends.

A trusted NIL agent can help review, negotiate, and protect you in the process. At NIL Agent Directory, our goal is to give athletes and families the knowledge and resources to make smarter choices when navigating NIL contracts.