What Nico Iamaleava’s Holdout Means For The Future Of NIL Contracts

When Tennessee took the field for its spring game on Saturday, it did so without quarterback Nico Iamaleava. What started as a buzz on social media on Thursday about Iamaleava attempting to renegotiate his NIL contract with the school’s collective quickly became a much larger story over the next 48 hours. Tennessee publicly parted ways with him and he entered the spring transfer portal.

Iamaleava made news in 2022 when he signed a four-year deal worth $8 million with Spyre Sports Group, the NIL collective for Tennessee. At the time, it was believed to be the largest NIL deal for an individual athlete.

However, values have escalated since then, with CBS Sports reporting Darian Mensah signed with Duke for $8 million over two years, a $4 million average annual salary that set the new high-water mark for an individual deal in college football.

On Friday, Iamaleava failed to attend the team’s final workout before the spring game on Saturday. The Athletic reported that when head coach Josh Heupel left practice and learned there had been no communication from Iamaleava, he decided it was time for the program to move on.

Former Tennessee coach and athletic director Phillip Fulmer is confident the Vols made the right decision.

“I’m proud of the stand we took as a university.”

Regardless of whether Tennessee looks back on this as a smart decision—on and off the field—in the future, one thing is for sure: the outcome of this situation will have a profound impact on contractual relationships between athletes and programs going forward.

Although the contract was between Iamaleava and the school’s NIL collective, future contracts may involve schools as revenue sharing is implemented, assuming the House settlement is approved or new rules are adopted.

How Schools Protect Themselves Going Forward

Darren Heitner, an attorney who’s been involved in NIL since the beginning, drafting and reviewing contracts for both sides, says schools are going to need safeguards going forward.

“Collectives and schools need to implement more robust contractual safeguards while maintaining compliance with NCAA regulations,” he advised.

His recommendations include:

1. Graduated buyout clauses that decrease over time but remain substantial enough to deter early departures, and
2. Mediation clauses requiring good-faith discussions before any party can terminate the agreement.

“The key is creating mutual accountability without crossing into pay-for-play territory. Schools and collectives should also consider requiring college athletes to carry professional liability insurance as an added protection.”

Mit Winter, another attorney who’s been actively engaged in the space since the beginning, says schools are already including buyouts or liquidated damages clauses but skilled counsel are either negotiating them out or they have no real teeth.

“Most schools view it as a recruiting killer if they or their collective sue a player. The only way schools can really keep players from leaving is through employment contracts,” said Winter. “Schools and collectives also sometimes use payment schedules to try and serve as deterrents to leaving. Bigger payments will be due after the portal closes. But again, good representation is aware of this strategy and will make changes in favor of the athletes.”

Asked when we might see schools take a tougher stance and seek enforcement of these contract provisions meant to protect them, Heitner says he thinks we’re reaching an inflection point where it’s inevitable.

He believes the most likely scenarios would be a high-profile athlete who’s receiving substantial compensation and not fulfilling his contract obligations (for example, required personal appearances), an athlete who transfers after receiving significant upfront payments clearly tied to performance not yet delivered, or a case where there’s documented evidence of misrepresentation during negotiations.

“Practically speaking, the monetary threshold matters significantly,” said Heitner. “Pursuing legal action for smaller deals lacks financial viability. But as we’re seeing multi-million dollar agreements become common, the calculus changes dramatically.

Winter doesn’t expect schools to fully enforce agreements.

“The potential consequences of being known as a school that will sue its own athletes probably outweighs any financial considerations at play with a buyout.”

However, Heitner thinks it’s only a matter of time. In fact, we may already be there.

“What’s holding collectives back currently is primarily the reputational risk. No one wants to be first to litigate against a college athlete. It would also open the collective up to discovery and reveal practices that may not always be above board. However, as the market matures and these relationships become more businesslike, enforcement will follow. It’s a necessity for the terms in the agreements to contain any deterrent factor. The Iamaleava situation may be precisely the catalyst that forces this evolution.”

Ryan Mulvaney, also an attorney in the NIL space who has negotiated contracts for athletes, says although it’s a difficult business decision for schools, some options for resolution may be better than others.

“Cure periods, clawing back of funds or fines may be the better approach particularly for optics. In most cases, they are issues that can be resolved outside of the public eye.”

How Athletes Protect Themselves Going Forward

Athletic programs aren’t the only ones that need to protect themselves moving forward. Athletes also need to take precautions. Both Heitner and Winter have some suggestions for athletes as they consider future contracts.

Heitner says athletes should prioritize the following:

1. Exit clauses triggered by coaching changes or significant program alterations
2. Proportional buyout structures that decrease substantially each year
3. Intellectual property protections that clearly define ownership of content created
4. Non-exclusivity provisions allowing multiple NIL partnerships
5. Flexibility to renegotiate terms if the athlete’s brand value increases significantly

Winter says athletes need to pay particular attention to term length, termination clauses and the grant of rights provisions.

“Some of the grant of rights provisions are very broad and if athletes aren’t carefully reviewing the language they can end up giving away a significant portion, or even sometimes all, of their NIL rights in school agreements. And some agreements I see still give schools the right to terminate at any time for any reason. With term length, athletes want to make sure they give themselves easy ability to enter the transfer portal if that’s what they want to do.”

Revenue Sharing Contracts

Mulvaney, who has negotiated contracts being offered to athletes over the last few months as programs gear up for revenue sharing, told me for my upcoming book, The Athlete’s NIL Playbook, that he’s increasingly seeing efforts to limit the temptation to enter the transfer portal.

“College athletes are entitled to exercise their discretion to enter the NCAA Transfer Portal,” Mulvaney said. “Correspondingly, some [Memorandums of Understanding] that do not attempt to restrict college athletes from entering the NCAA Transfer Portal nevertheless attempt to claw back monies paid to college athletes if those athletes enter the portal. Language should be included to strategically structure the payments due to the athlete or to limit the extent of the claw back of monies.”

Those contracts also require certain performance from each party, such as an athlete remaining academically and athletically eligible in exchange for revenue sharing payments.

“The MOUs also contain provisions that I call ‘Coach’s Discretion,’ meaning that the coaching staff has complete discretion to run the team including, but not limited to, the discretion to decide if, and to what extent, the athlete is a member of the team and participates in games (i.e., playing time).”

Mulvaney says if an athlete fails to satisfy his obligations, then the school may try to fine or deduct payments. They also could demand curing of the breach of contract.

“Even the NFL has players every season who refuse to report for camp. The difference there is that the NFL–the players and the teams–is governed by a collective bargaining agreement that provides for collectively bargained and agreed upon ramifications for a player’s failure to report to minicamp or participate in off-the-field team activities.”

Because college athletes are not classified as employees, they are not able to collectively bargain.

Representation Considerations

In order for athletes to ensure they are getting the best deal they can—with as few limitations as possible—it’s imperative they have experienced representation for negotiations.

“In Iamaleava’s case specifically, having his father as his representative might have limited his ability to receive truly independent guidance during negotiations,” said Heitner. “Professional representatives often bring valuable market knowledge and negotiating leverage that family members simply cannot replicate.”

Iamaleava’s father may have also created a public relations issue for his son by attacking on social media the reporter who first shared rumors that his son was holding out for more money and potentially entering the transfer portal.

“More games being played off the field than on the field,” the senior Iamaleava shared on X. “Bi7ch Nakos from On3 Sports called and asked me directly, I told him I had no idea on what he’s talking about. He said his ‘close source’ that he trusts with his life from the University of Tennessee staff gave him this information. So y’all can ask them what’s going on, cuz it ain’t from us!”

Heitner had his own thoughts on the situation he posted to X:

Heitner says the college market is particularly challenging for parents who aren’t agents or attorneys regularly engaged in this space for a number of reasons. The regulatory landscape is unsettled, and long-term implications of provisions in the contract may be difficult to discern. Factor in the emotion involved and the power imbalance between sophisticated collective representatives and the family members, and athletes might not be getting the best deal they can.

“This isn’t to suggest impropriety, ” said Heitner. “Many parents act with absolute integrity, but the complexity of these arrangements increasingly demands specialized expertise. As NIL continues evolving toward a pure business model, we’ll likely see fewer family representation arrangements at the highest financial tiers.”

Mulvaney says he values the input from families, but there have to be limits.

“I advise parents that, once I am retained as the lawyer for their son or daughter, I will reach out to the schools and/or NIL collectives directly and instruct them that, going forward, all communication concerning the players must now go through me. I also urge the parents and players to not communicate anything about the negotiations of their contracts to the media or post about it on social media. If the media is to be engaged, then the engagement must be strategic and come from only me. Once the negotiations have concluded and the agreements are fully executed, then we can conduct all the interviews we want.”

He admits that it’s difficult for parents to entrust their child’s future to someone else, but ultimately that may be the best thing they could do for them.

“Parents obviously want the best for their children. I also suggest that, part of that, includes hiring the right lawyer or agent to work in the best interests of their children.”