Group Licensing Might Solve Potential NIL Problems
Many readers have pointed to their fear of intra-team jealousy if the super-star players get the lion’s share of NIL deals. One solution to potential unrest might be group licensing. What is it?
Group licensing deals are typically defined in an agreement in which a licensee (i.e., the party who pays for and receives the license) uses a certain minimum number of player names, images, or likenesses in conjunction with or on products that are sold at retail or used as promotional or premium items, such as trading cards. For example, the NFLPA group licensing program for NFL players is defined as the use of a total of six or more NFL players on or in conjunction with retail or promotional items like EA Sports’ Madden NFL Games. At the same time, each NFL player retains the right to engage in individual NIL deals.
The first reported group license in professional sports was during the 1960s in a deal between Major League Baseball players and Coca-Cola that placed a series of 500 player pictures on the underside of bottle caps. An example of a modern group license deal is Topps Major League Baseball Trading Cards.
It is more efficient for third parties to negotiate one deal for all players’ NIL rights instead of negotiating with each individual athlete for their rights. Group licensing deals provide “one-stop shopping” for companies seeking multi-player product or promotional lines. A group licensing deal also allows revenue to be shared among all athletes in the group. Many athletes lack the popularity and renown to sign individual NIL deals, but their NIL has value as part of a group because the licensee wants to depict an entire team, league, etc. (as might be the case with trading cards and video games).Source: NIL FAQS: GROUP LICENSING
Group licensing has the potential to help players who may not have great recognition get in on the NIL dollars – the offensive line for example. Individually, O-linemen may have a more difficult time getting endorsement deals, but there could be many more opportunities for the O-line as a group. The issue, for now, is that there is no legislation empowering Congress or NCAA to set up a body to oversee group licensing deals:
Group licensing is one of many ways in which college athletes could commercialize their NILs to create team-based products. Two notable examples of group licensing entities – patent pools and performing rights organizations (PROs):
Patent pools encourage market adoption by making it easier to license patented technologies. By aggregating patents into a portfolio, a pro-competitive pool combines complementary inputs, negotiates fair and reasonable royalties, and lowers transaction costs by reducing the need for individual licensing agreements. Patent pools may also enable creation of new products and promote innovation.
PROs generate similar efficiencies via group licensing of copyrighted music. Without a PRO, individual musicians would need to locate each music consumer, negotiate a licensing agreement, and administer royalty payments. PROs reduce the musicians’ burden by aggregating music copyrights into a portfolio, negotiating a portfolio license, collecting royalties from licensees, and distributing royalties to musicians. PROs also play an enforcement role by monitoring consumer use of copyrighted music and resolving disputes via negotiation or litigation.Source: Interview: A Proposal for Group Licensing of College Athlete NILs
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