Eric Fishman and Nicholas Saady recently authored an article titled, "Navigating the New Playing Field: What Athletes Need to Know when Monetizing NIL" in the Sports Business Journal. They explain that advances in technology have transformed the manner in which players can capitalize on their star power — giving them both additional revenue streams as well as a great way to control and protect their valuable intellectual property. From NFTs and the metaverse to unique licensing and partnership deals and even the tokenization of traditional contracts — the increasingly digital and interconnected global marketplace has presented vast opportunities. It has also obliterated market barriers, as athletes can instantly reach their fans in every corner of the globe by simply posting on Instagram or TikTok.

Fishman and Saady go on to discuss the risks that this capability has brought; and explain that many of the rules surrounding tokenization, NFTs and the metaverse remain unclear, leaving many to draw comparisons between exploring these new methods and venturing into the "Wild West." They go on to note:

Social media is, remarkably, now a “mainstream” form of monetization. Athletes engaging with platforms like Instagram and TikTok to generate revenue must be aware of the concomitant risks. When promoting products or services on social media, care must be taken to ensure that statements are not misleading, deceptive, defamatory, or might implicate other tortious actions. Athletes should also be conscious of peculiar laws. For example, certain jurisdictions may prohibit influencers from posting testimonials about certain health products and cosmetics.

Traditional business partnerships remain common and profitable for athletes, though the partnership opportunities have evolved into new areas. Think of Conor McGregor’s momentous success with Proper Whiskey, Coinbase’s deal with Kevin Durant, and Giannis Antetokounmpo’s partnership with WhatsApp. Regardless of the deal size, it is essential that the terms of the relevant contracts are carefully and clearly drafted. This is particularly so for terms dealing with the exploitation of athletes’ IP — including the definition of that property, the manner in which it may be exploited, and the duration of exploitation rights. Athletes should also be attentive to exclusivity provisions, so that they have sufficient flexibility to utilize other avenues of monetization. Many athletes may seek compensation in cryptocurrency. While there are benefits to cryptocurrency, it is important for athletes to understand the risks and legal implications: volatility, tax uncertainties, and cybersecurity issues, among others."

The article can be viewed in its entirety here.