New Florida NIL Legislation Capping Agent Fees Could Hurt Athletes

Florida's proposed 5% NIL agent fee cap may limit athlete representation, particularly for smaller schools and high-value influencers

Noah Henderson | Feb 27, 2025

Jan 7, 2025; Gainesville, Florida, USA; Florida Gators mascot Albert the Alligator holds a sign after a game against the Tennessee Volunteers at Exactech Arena at the Stephen C. O'Connell Center. Mandatory Credit: Matt Pendleton-Imagn Images / Matt Pendleton-Imagn Images

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This week, the state of Florida introduced legislation with the intention of becoming the first state to cap agent fees in NIL deals.

House Bill 981, sponsored by Rep. Yvette Benarroch (R-Marco Island), would limit agent compensation to 5% of Florida student athletes’ total earnings from their name, image and likeness.

Direct language from the bill reads:

468.454 Contracts. — (12) An agent contract may not allow an athlete agent to receive more than 5 percent of a student athlete's total compensation, whether monetary or otherwise, derived from an endorsement deal, a promotional activity, or any other opportunity in which the student athlete uses his or her name, image, or likeness.

While the bill is intended to shield athletes from predatory agent behavior, the result may deviate from its positive intentions.

If passed, the fee cap would make it less desirable for agents to represent athletes at some of the nation’s most prominent athletic institutions, such as the University of Florida, Florida State, UCF and the University of Miami.

At a 5% commission rate on all NIL engagements, many agents may opt to back out of the representation of college athletes altogether.

Revenue athletes at Power 4 schools can command significant NIL compensation capable of enticing agents at a 5% commission rate and the added benifit of forming a relationship with an athlete before a potential pro career where they could continue their representation.

Ultimately, athletes at smaller schools in Florida may suffer the most from this provision.

For the nine Division I universities in Florida that do not sponsor FBS football, the compensation to their athletes is much lower. At a 5% commission rate, the value proposition to sports agents is greatly diminished, and the ability to secure competent representation will be significantly reduced for athletes at schools like North Florida, South Florida, Florida Atlantic, Florida Gulf Coast, Florida International, and several others.

Compared to regulations surrounding the representation of professional athletes, little regulatory oversight is placed on anyone assisting student athletes with NIL representation. A patchwork of NIL state laws implement different requirements for engaging in an agency relationship with a student-athlete, all of which fall well short of accreditation standards from professional sports leagues.

All major professional sports leagues in the United States require agents to be certified by the respective player’s union to negotiate player contracts. Background checks, certification exams, and licensing mandates are commonplace to ensure agents are competent in representation and do not have a history of illegal or predatory behavior.

In addition to certification, player associations, with the exception of the MLBPA, impose fee caps on what agents can charge for player contracts.

Depending on the league, these upper limits fluctuate between 3% and 5%.

Anecdotal reports from sources inside college basketball have indicated that in certain instances, some agents have charged beyond 25% for representation in negotiations with NIL collectives — a fee structure more than six times the maximum agent commission for NBA contracts.

Due to regulatory restrictions, college athletes are compensated for their athletic compensation through illusory endorsement contracts via NIL collectives. While the language of the contract in a collective deal states the athlete is compensated for token endorsement activations, the value of the agreement is entirely predicated on the athlete’s value on the field.

From a player and agent’s perspective, there is little difference in negotiating a NIL collective contract than a professional player contract. Implementing a commission cap is understandable for collective deals, and calls for regulating commission rates on these contracts have rung loud since the first days of NIL.

The days of illusory collective payments are likely to end soon.

Starting July 1, schools are preparing to begin directly compensating athletes’ NIL funds in a revenue-sharing agreement, following the preliminary approval of the House v. NCAA settlement. Several states have enshrined revenue-sharing by law in the event the House v. NCAA settlement does not receive final approval.

In addition, the settlement provides for an NCAA-run arbitration panel to disaffirm any collective-based contract not predicated on an athlete’s fair market value as an influencer, effectively ending the ability for NIL collectives to act as a payment arm for athletic services.

Effectively, the House v. NCAA settlement acts as a collective bargaining agreement (CBA) for college sports. The document introduces many professional concepts to college sports, such as salary caps, roster limits and anti-salary cap manipulation tools.

However, agent regulation is one element missing from the settlement found in all professional CBAs.

Florida has stepped in to bridge the gap in the new professional rules of college sports and implement guardrails typically afforded by professional CBAs — a noble pursuit, in my opinion.

The bill, however, is inherently flawed.

While the 5% fee cap mimics the upper end of professional representation agreements, Florida’s blanket provision is much more expansive than those implemented by the respective professional players’ associations.

In professional sports, fee caps only pertain to player contracts and do not encompass outside endorsement deals like the Florida bill. When professional athletes appear in commercials, make in-store appearances, or participate in any form of endorsement-based activation, the agents facilitating these deals often earn between 15% and 20% of the engagements.

Endorsement deals typically require higher fees than player contracts due to the increased workload in sourcing opportunities, negotiating terms, and managing ongoing promotional efforts.

Most revenue-athletes generate the majority of their earnings through pay-for-play contracts.

In the current system, these contracts are structured as NIL collective deals; next year, they will be structured as direct NIL revenue-share payments.

Regardless of structure, imposing fee caps on deals tied to athletic performance is appropriate.

However, many prominent college athletes and college athlete influencers earn significant compensation through endorsement activations and brand deals that leverage their fame for legitimate marketing purposes. Athletes like Livvy Dunne, Arch Manning and Cooper Flagg can annually command seven-figure compensation from product endorsements.

Under Florida’s proposed laws NIL endorsment deals would be subject to the same 5% cap as the payment for student-athletes' athletic services. Players with immense value as influencers will find it the most challenging to secure competent representation. Agents can only earn a fraction from Florida student-athletes compared to what they could charge professional clients for genuine endorsement engagements – deals that often require significantly more investment.

The Florida bill is not a flawed concept; greater regulation of athlete agents in the NIL space is a pressing issue. However, to avoid harming in-state athletes' ability to secure representation, it must be more narrowly constructed to regulate only revenue-sharing deals.

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