Hours after University of Arkansas incoming freshman quarterback Madden Iamaleava entered the transfer portal Tuesday, Razorback athletic director Hunter Yurachek encouraged Arkansas Edge, the athletic department's collective, to enforce the buyout clause in Iamaleava's NIL contract.
"I have spoken with the leadership team at Arkansas Edge and expressed my support in their pursuit to enforce their rights under any agreement violated by our student-athletes moving forward," Yurachek said on social media, as reported by CBS Sports. "We appreciate Edge's investment in our student-athletes and acknowledge the enforcement of these agreements is vital in our new world of college athletics."
Players who cashed NIL checks, only to enter the transfer portal and leave a school before ever playing a game there, may now face legal issues. "At schools like Arkansas, buyout language in NIL deals is now common," Brandon Marcello wrote for CBS Sports. "Though the NIL era is only a few years old, players reneging on deals may soon lead to legal battles pitting schools against athletes."
Hundreds of players have ignored buyout language in their NIL contracts, according to Marcello.
"In the past, programs were reluctant to pursue legal remedies due to negative headlines, but multiple schools and collectives are now exploring legal action against players who do not honor their contracts, sources in the NIL industry told CBS Sports on Tuesday," he wrote.
Multiple sources told Front Office Sports that collectives are increasingly trying to recoup revenue from players who are utilizing new NCAA rules that allow athletes to transfer schools multiple times without penalty. “Buyouts are fairly common, especially with high-value athletes,” Russell White, president of The Collective Association, told FOS. “They are now being included in more agreements.”
The key question is whether buyouts are enforceable, wrote Amanda Christovich of FOS.
"Usually, a collective will include a buyout clause requiring the player to either pay or return a certain amount of money to the collective if the player violates the terms of the agreement — usually if they leave schools before the lifetime of the contract ends, and therefore can’t complete all the requisite NIL activities," wrote Christovich, adding that buyouts included in the one-year deals at Arkansas require athletes to pay 50 percent of the contract's remaining earnings.
Enforcability may hinge on contract language.
Attorney Darren Heitner, who represents dozens of college athletes, none of whom have had to pay buyouts so far, told FOS that buyouts framed as “penalties” are often less enforceable legally than buyouts framed as “damages.”
“I’m not willing to generalize and state that all buyouts are unenforceable,” Heitner said. “However, on the rare occasion that there has been a claim for repayment for one of my clients, that has been my conclusion based on the language of the agreement at issue, as well as the specific facts of the situation at hand.”
Most disputes have avoided the courts, with settlements reached behind closed doors, Christovich reported. But that may change.
"The next step for the industry: to see how a buyout clause fares in court," she wrote. "For now, one thing is clear: Collectives are no longer accepting being left high and dry in the era of unrestricted free agency."
