Here’s how Nike’s Phil Knight’s next business could help UO student-athletes cash in on their names and images

Nike co-founder Phil Knight and other prominent University of Oregon donors and alumni announced a few weeks ago the launch of a new company called Division Street. It’s a joint venture between people with ties to the multinational apparel company and UO, focused on helping Duck student-athletes to take advantage of new opportunities to earn money by creating their own personal brands.

Some say this new company and partnership could be a trend in the future of name, image and likeness — or “NIL” — monetization for student-athletes.

Discussions surrounding compensation for collegiate athletes have been growing in recent years as college sports rake in billions of dollars nationally, while student-athletes only see a fraction of that money through scholarships and similar perks.

In April 2020, the National Collegiate Athletic Association announced its support for student-athletes to profit from NIL deals, as long as the institution they attend is not paying them directly. States, like Oregon, continue to pass NIL-related laws asserting the same thing.

The details of the partnership between Division Street and UO are still to be determined, but officials say it will include students working within UO’s School of Journalism and Communication and its Warsaw Sports Marketing Center in a “first-of-its-kind, full-service, student-led marketing and branding collective” called the Oregon Accelerator.

Still, observers call for caution for student-athletes as they contemplate deals before there are federal guidelines in place. They warn athletes of the risk of losing their athletic eligibility if there are any violations of state, institutional or broader rules.

Related: Nike co-founder announces new company focused on helping UO athletes market themselves

Figuring out limitations and protecting student-athletes

As an assistant professor with UO in the Department of Indigenous, Race and Ethnic Studies, a lot of Courtney M. Cox’s work is focused on the intersection between identity and sports. She follows conversations about NIL closely.

Cox said she has been waiting to see what might happen in Oregon after Senate Bill 5 was signed into law this summer, allowing student-athletes to receive compensation for NIL deals.

“It’s not surprising if you look at the University of Oregon that has been really at the forefront of branding … I mean, from the uniforms to the partnership with Nike,” Cox said. “It’s not surprising from a branding and marketing perspective that Oregon would really take this first big step.”

Cox isn’t surprised, but is she encouraged by what it will mean for student-athletes?

“I think that Division Street is a step in a direction. I think there’s a lot that remains to be seen here.”

One of the concerns Cox has is about protection for student-athletes navigating deals.

Related: Oregon Senate passes bill allowing college athletes to receive compensation

“I’m interested in it from a legal and a labor perspective. What do these contracts look like?” Cox asks. She suggests there’s a lot “to gain” for a company like Division Street and for UO.

“So I’m always thinking about my work through an athlete-first perspective. … I want to know are these brands and endorsements in perpetuity? Can they always use the name, image and likeness of these athletes? What will support them after their time at the University of Oregon? These are some of the questions I’m asking.”

Peter Schoenthal tracks these issues from his post as an attorney and CEO of Athliance, a software company that helps student-athletes disclose NIL opportunities to their schools. The company also educates athletes on topics such as financial and tax literacy.

He, like Cox, said protection should be front-of-mind for student-athletes, especially when it comes to protecting their athletic eligibility. He has specific advice for athletes navigating NIL deals.

“The key to the NIL space from a student-athlete perspective is protection, protection, protection,” Schoenthal said. “The best way to protect yourself and to thrive in this space is to disclose all of your opportunities to your institution and put the onus on them to make the determination whether or not you’re doing something that violates your eligibility.”

The question of what limitations student-athletes and universities need to watch for when figuring out NIL-related deals is also a “hot topic,” Schoenthal said, “because they’re really all over the place.” The problem, he suggests, is there are no bright legal lines to stay inside.

“We don’t have any real federal legislation,” Schoenthal said.

The NCAA has given some guidance, he said. Essentially, opportunities for student-athletes to get paid can’t be “pay for play,” so they can’t be paid for scoring a touchdown or making a goal. They can’t can’t be paid for “inducement,” so to come to or stay at a school.

Schoenthal said the money for athletes can’t pay for those things, but it has to be in exchange for something.

“There’s got to be a quid pro quo, which is, ‘I’ve got to pay you to do something,’” Schoenthal said. “I don’t love the phrase NIL, I like the phrase ‘UNIL’ — you’ve got to use your name, image and likeness to get paid.”

Outside of those limited rules, Schoenthal said, the NCAA has told athletes to follow state legislation when possible. If a state does not have a specific law that applies, the NCAA has directed athletes to follow their university’s rules and procedures.

He noted that earlier this month, NCAA and other collegiate athletic leaders met with Congress to stress the importance of explicit federal guidelines. But, Schoenthal said, it’s unclear when that may come to fruition. In the meantime, he stressed that student-athletes should be as careful as possible about the types of deals they take.

Potential brand hesitancy

Likewise, Schoenthal brands and companies may be reluctant to enter into contracts with student-athletes without uniform rules and governance on the federal level.

“It’s too hard to know what you can and can’t do, and no one wants to be the first one to put a student-athlete at risk of violating their eligibility,” Schoenthal said. “I think we’re going to see more of these opportunities and more of these types of announcements in the future, especially once we get uniform laws across the board and once people know exactly what they can and can’t do. I’m hoping sooner rather than later.”

Cox said these new discussions around NIL have created new markets. She anticipates student-athletes seeing smaller deals, like with “a local car dealership” for instance, but also much larger opportunities, with those cautions in place.

Division Street could offer huge opportunities for UO athletes, Cox said, especially keeping in mind who’s heading up the company. Longtime UO donor and Nike co-founder Knight is of course a key player. Others involved include sports agent Rich Paul, through his brand and creative company Adopt. Former UO basketball star Sabrina Ionescu will serve as Chief Athlete Officer, a position in which Ionescu will host seminars with UO athletes and advise the company on how to ensure athlete voices are heard.

“We are going to see these massive, massive connections, these groups where you have Rich Paul, Phil Knight and Sabrina [Ionescu] all teaming up to create this space that will help athletes leverage their brand in this moment and making it university-specific,” Cox said. “It’s just a fantastic piece of the broader sports puzzle that is this space at the University of Oregon.”

Students helping students

In its announcement a few weeks ago, Division Street said it would be collaborating with UO’s journalism and communication school as well as its sports marketing center.

Much like the legal details and business framework, UO officials say the details of the opportunities for students are still being ironed out.

“It’s a still ever-evolving program here as kind of what we understand about NIL, and ultimately what athletics understands about NIL in terms of what is and is not permissible under NCAA rules,” said Craig Leon, MBA Program Manager for UO’s Warsaw Sports Marketing Center.

Leon is working with Troy Elias, an associate professor and director of advertising for UO’s School of Journalism and Communication, and others within the university to plan the side of the Division Street partnership that will bring current students into the fold to work on NIL-related projects for student-athletes.

That could look like students developing best practices and doing research related to NIL or eventually developing logos for athletes.

Leon and Elias said the program is still in the works, but the two said students within UO’s business school and journalism and communication school who participate will be compensated.

“There’s a lot of fluidity here and a lot of things that need to be discussed and fully fleshed out before a 100% launch and anything is set in concrete,” Elias said. “I think what matters for us is making sure we are doing right by all parties involved and not putting our student-athletes in any positions we don’t want them to be in, and the same thing for our students. So, we will proceed with caution.”

Elias and Leon said they expect some projects to pop up later this fall for marketing and communications students to work with Division Street.

As for the goals of this particular collaboration with UO and Division Street, Elias said it’s to help student-athletes and students alike.

“[It’s] supercharging student-athlete visibility, allowing them to be really seen, to be recognized, to be sought after — again, within the boundaries of the rules that exist,” Elias said. “And also creating a program that allows our students that are interested in business and sports and advertising, public relations and communications, in general, to really enhance their skill sets in such a way that they are tremendously marketable once they graduate and set out for their careers.”

UO assistant professor Cox has similar hopes for the collaboration and wants it to serve as a learning opportunity for not only sports marketing and communications students, but for student-athletes themselves.

“I would love for this fantastic educational opportunity for college athletes … if we actually leverage this into something that is fruitful, where it’s not people making decisions for athletes — it’s them being trained, no matter what they do after this,” Cox said.

Elias and Leon said Division Street’s work with UO could make the university more attractive, not only to student-athletes but also to business-minded students interested in working on parts of these NIL deals.

Cox agrees, and she anticipates Division Street’s format will become a trend for other institutions.

“No one has something like Division Street, but I think every school, every major power five school has boosters that in many ways can create something, not a Phil Knight creation per se,” she said. “[But], the recipe of former college athletes plus powerful branding, marketing folks, plus booster alum — that formula will be replicated.”