Group Licensing – Now, Later, or Never? The Debate Continues…

Panelists

  • Blake Lawrence, CEO & Co-Founder, Opendorse (Moderator)
  • Bubba Cunningham, Director of Athletics, University of North Carolina at Chapel Hill
  • Eric Winston, Chief Partnerships Officer at OneTeam Partners, Former NFLPA President, 12-year NFL Veteran
  • Tye Gonser, Partner, Weinberg Gonser LLP
  • Gabe Feldman, Professor at Tulane Law School and Director, Tulane Sports Law Program, CAS Arbitrator, Consultant

Webinar Recap

On Monday, LEAD1 Association (“LEAD1”) hosted a virtual forum to discuss one of the hottest issues in the student-athlete name, image, and likeness (NIL) conversation. The pertinent question for college sports is whether a group licensing approach, similar to the models used by the professional sports leagues, may be a viable path in the future. Due to some of the possible legal hurdles, the NCAA’s Federal and State Legislation Working Group seemed to punt on the issue for now, but that does not preclude the association from adopting such a system as soon as next year. Some, like the NCAA, have stated that implementation of group licensing should be delayed because of the need for a player’s association. On the other hand, some have described group licensing as the “low-hanging-fruit” of the NIL debate – that is providing student-athletes with incremental payments, at least initially, for NIL compensation.

The panel, moderated and sponsored by Blake Lawrence (CEO & Co-Founder at Opendorse), included Bubba Cunningham (Director of Athletics at the University of North Carolina at Chapel Hill), Eric Winston (Chief Partnerships Officer at OneTeam Partners), Gabe Feldman (Director at Tulane Sports Law Program), and Tye Gonser (Partner at Weinberg Gonser).

What made this LEAD1 panel so special is that it featured some of the pioneers of the group licensing topic as applied to college sports. In May 2016, Feldman wrote the often cited white paper on student-athlete NIL prepared for the Knight Commission on Intercollegiate Athletics.  Gonser followed about a year later with his 39-page plan on a potential NIL model (written with NFL Quarterback, Josh Rosen; both of these papers are linked in the footnote for your reference).[1] Winston also served as National Football League Players Association (NFLPA) President for six years (up until 2020) and Cunningham has been, perhaps, the most outspoken athletic director on the group licensing topic.

There are, of course, several different meanings, of the term “group licensing.” One definition, for example, alludes to the involvement of institutions in creating a group licensing opportunity for a number of athletes that share NIL revenue. Another definition could involve student-athletes, without assistance from their institutions, forming their own group and marketing their NILs. There are also some misuses of the term, such as “athletic department revenue sharing.” Lawrence opened the panel by clarifying any possible misuses of the term. Winston, for example, stated a clear definition of group licensing as a “group of people coming together…to form a commercial entity…for revenue purposes.” The classic example of group licensing opportunities are video games, jerseys, and trading cards.

Feldman then reiterated the NCAA’s arguments by stating the biggest possible concerns with a group licensing system. According to Feldman, the “use of institutional marks” is one of the biggest obstacles from an NCAA standpoint, because it creates a perceived “joint deal” between the institution and athletes (by pairing student-athlete NIL with institutional marks (such as logos and other trademarks)). In turn, this could lead one step closer to “pay-for-play,” thereby undermining the NCAA’s arguments in the Courts (especially given the association’s current appeal of the Alston case in the Supreme Court).[2]

Cunningham and Gonser spoke more philosophically about the benefits of group licensing. Cunningham stated that group licensing should be the next step to modernizing NCAA rules and Gonser highlighted the importance of having some sort of third party entity to administer the group licensing.[3] Cunningham made a novel point that most institutions already aggregate their rights, in other situations, such as television and equipment contracts.[4] In addition, Winston noted that group licensing may actually mitigate some of the competitive inequities that exist in college sports. Feldman also acknowledged that most student-athletes are more likely to have increased value in a group than in mere individual licensing situations (generally explaining that group licensing is more efficient).[5] Perhaps the biggest point was Cunningham’s comment that individual licensing opportunities could lead to the cutting of more non-revenue sports as companies and individuals choose to spend either for the individual athlete or the athletic department.

All in all, the panel agreed that group licensing would add tremendous value for all stakeholders in college sports, including the fans (largely due to the video games coming back). While some of the perceived legal hurdles have slowed the implementation process, group licensing at the college level is inevitable. The question is just “when,” not “if.”

[2] Feldman also noted the possible recruiting concerns as it relates to competitive equity.
[3] Cunningham stated that a union, for group licensing purposes, is not necessary, and that student-athletes could “opt-out” of any group licensing program, like the professional leagues; Gonser also described his concerns regarding any agent involvement with student-athletes.
[4] Winston, similarly, reiterated that schools already aggregate their rights through television contracts.
[5] According to Feldman, the greatest individual opportunities for student-athletes will be on social media; Gonser seemed optimistic about the possibility of “local” opportunities, like the classic car dealership example, for all student-athletes.