Per Front Office Sports, the Pac-12 has made the decision to become the first Power Five conference to allow student-athletes to license highlights.[1] The licensing will be done through Veritone, the media licensing partner for the conference, and will open up another avenue through which student-athletes can seek to benefit from and profit off their name, image, and likeness (“NIL”).[2] President of Pac-12 Networks, Mark Shuken, stated in the conference’s press release that:
As part of a network built to showcase the Pac-12 Conference, its student-athletes and programs, the Pac-12 Networks NIL Licensing Program is an important step in recognizing and celebrating the new opportunities available to student-athletes[.] . . . We are proud to provide this new, streamlined process for student-athletes and their NIL partners to easily access and make the most of Pac-12 Networks footage in this new landscape.[3]
A license, for anyone unfamiliar, is a limited right in property granted by the property owner to a third-party that allows the third-party to use the property in a certain defined way. In this case, intellectual property is the property at issue and the licensing program will allow student-athletes the limited right (i.e., license) to use highlights, the intellectual property of which is owned by Pac-12 Networks, for certain NIL-related endeavors, subject to any restrictions or stipulations imposed by Pac-12 Networks.
Before getting into the broader ramifications of this decision, it is important to acknowledge who the program will be available to: student-athletes and their NIL partners.
In practice, assuming there will be a cost associated with licensing, it is possible that in many instances it will be the NIL partners licensing the highlights directly from the Pac-12 Networks, rather than the student-athlete themselves, because of the up-front costs associated with obtaining a license for highlights. (At this point, no statement has been made about the costs associated with licensing highlights or other content from Pac-12 Networks). It will be interesting to see, as more details of the program come out, how Pac-12 Networks will handle working with NIL partners directly as opposed to working with student-athletes. Working with student-athletes directly illustrates the commitment to celebrating new opportunities for student-athletes that Mark Shuken mentioned in his statement while ensuring that the network can still keep some cut of the profits; working with NIL partners directly furthers the profitability of the Pac-12 Networks while potentially limiting how much of that profit student-athletes are able to tap into.
But student-athletes will have several different options for structuring licensing deals. Student-athletes could enter into agreements i) where the student-athlete will require the NIL partner to make an initial payment to allow the student-athlete to pay the licensing fee, if any, to Pac-12 Networks and then license that right out to the NIL partner; ii) where the student-athlete grants the NIL partner the right to procure a license for specific highlights involving the student-athlete directly from Pac-12 Networks; or iii) assuming student-athletes are able to license their own highlights for free, or elect to pay for the license, where, after the student-athlete licenses highlights from Pac-12 Networks, the student-athlete then further licenses the license to highlights to an NIL partner.
In either case, the student-athlete will want to ensure that the NIL partner only has the right to use a specific highlight, or set of highlights, and that the highlight(s) can only be used in the exact manner that the student-athlete determines best for profiting from and protecting its NIL (and that does not in any way violate the terms of the original license with Pac-12 Networks).
This decision by Pac-12 Networks will not expand the NIL market for student-athletes on its own, but it will allow student-athletes to have better access to the highlights and footage that make their NIL profitable, which may attract new businesses and sponsors into considering NIL deals with student-athletes. By choosing to license its highlights and footage, Pac-12 Networks has made the decision to insert itself into the NIL market and take advantage of the money available in the market; it has positioned itself as a sort of middle-man that controls and owns a highly valuable aspect in the NIL market – student-athlete highlights.
The question yet to be answered is whether other conferences will follow suit. The argument could be made that conferences are better off keeping student-athletes out of the equation and maintaining the rights to all highlights and footage on their own so that it can be sold directly to businesses, cutting out the student-athlete, at the highest price. But the argument could just as easily be made that adding student-athletes into the equation will help grow the market for the highlights and footage that the conference owns, and therefore the conferences could expect increased profits even with student-athletes getting paid in that scenario.
Another issue to keep in mind is how mass-licensing will work under the Pac-12 Networks program. If, for example, EA Sports decided to revive its wildly popular NCAA Football video game with the actual names, images, and likenesses of every single Pac-12 college football student-athlete, is there a mechanism in place for the conference to make the decision to license the Nil on behalf of all student-athletes? Would higher profile athletes be able to holdout for better deals than the conference and EA Sports might initially have on the table? Or would the student-athletes be in a position where they can now profit from their NIL in a potential video game, but would not actually have a seat at the table in deciding how their NIL was used and how they were compensated for such use? EA Sports showed interest in the past in licensing the NIL of all college football players, before the NIL era was even on the horizon, but there has been little indication of how such an arrangement might work, especially if different conferences begin to take different approaches on how to license conference-owned content to its student-athletes.
