Big Ten Athlete Revenue Sharing Reveals Complexity of Xavier Lucas NIL Dispute

Big Ten school shares athlete revenue agreement that outlines NCAA pitfalls for NIL and player movement rights amid Xavier Lucas transfer dispute.

Mark Hoffman / Milwaukee Journal Sentinel / USA TODAY NETWORK via Imagn Images

As the dispute over Xavier Lucas transferring from the Wisconsin Badgers to the Miami Hurricanes unfolds, it’s put the enforcement of NIL agreements and the conformities of the NCAA transfer portal under the spotlight.

The case has centered around what Wisconsin officially cited as a “binding two-year NIL agreement” with Lucas, implying future legal action.

The proceedings will likely alter the future of college sports and player movement rights.

While the Big Ten issued a public statement in support of Wisconsin and their efforts, one of their institutions shared a copy of an athlete revenue-sharing agreement exclusively with Sportico that illuminates the rights players are asked to surrender.

Big Ten schools are reportedly asking athletes to sign over NIL rights, permit them to sublicense those rights to “any and all third parties,” and relinquish their legal claim to employee status under the planned revenue-sharing structure.

A source, who requested anonymity for the specific program, provided Sportico with the document from another Big Ten institution.

It’s not tangibly clear how substantially similar the agreement is with the one signed between Lucas and the Badgers, with Lucas’ lawyer and a Big Ten representative declining to give comment to Sportico. They reported that two attorneys familiar with similar agreements say they’re consistent in language.

The seven-page document is a memorandum of understanding (MOU), which is an agreement between two or more parties that is not expressly legally binding. Similar to signing a letter of intent, MOUs document the expectations or intentions in a mutually reached agreement and imply both parties’ willingness to imminently move forward with a contract.

If an athlete transfers or even just enters the portal, Sportico reports language that requires schools to reimburse them for a portion of the revenue.

A more ominous clause is the adjustment of payment to reflect the athlete’s performance, despite expressly including the agreement is not “pay-for-play” for freedom to terminate deals and future payments if laws change.

The MOU underscores the implications of the proposed House v. NCAA settlement involving revenue-sharing.

It allows athletes to monetarily benefit from the funds they generate, but without expressly defining what rights they’ll concede in return.

It’s clear the shared agreement aims to protect schools from lawsuits, license and use athletes’ NIL rights with various parties, and provide financial recourse should athletes transfer.

Legal drafters of these MOUs are walking a razor-thin line that handles intellectual property rights and arguably dabbles in “pay-for-play” without establishing employment-type relationships with athletes.

The parties are established to be signing an enforceable business contract with consideration and a set of "representations, warranties, and covenants" — all distinct legal terms in business contracts.

This entire discussion underscores the need for athlete representation and legal counsel in negotiating any form of verbal or written agreements with universities.

The MOU reportedly does not call them “student-athletes.” It deals with their intellectual property rights and is a licensing agreement for schools to use their athlete’s NIL and invoke third-party sublicensing. Sublicenses would not allow athletes to gain rights to royalties or additional payments.

It provides schools with a license for all of the athlete’s NIL rights, including jersey numbers and social media handles, and grants them sublicenses to the Big Ten, NCAA, or any third party. This can continue after an athlete is no longer at the school, excluding selling goods or services.

There is a clause aggressively titled “No Employment” that states a lack of a fiduciary relationship, and the athlete must forever agree to not sue their school, the NCAA, or their conference on the basis of being an employee due to the MOU.

The clause on transferring only requires schools to take “reasonable steps not to actively use the athlete’s NIL” after the athlete plays for another team. However, they can “sell off” products and reserve NIL rights for “archival purposes and historical signage.”

Relevant to the dispute with Lucas, the MOU states a school can demand reimbursement from the athlete for prorated portions of NIL payments, conditioned on when the athlete transfers.

It further outlines broadcast NIL or BNIL rights for broadcast revenue. 

While the MOU uses language that explicitly tries to avoid an employment relationship, the terms and control relinquished by the athlete present a conundrum that Lucas has now put a spotlight on.