Introduction: Your NIL Contract Says You'll Get Paid Even If You're Injured. Read the Fine Print—You Probably Won't.

You sign a $100,000 NIL deal with a collective. The contract says you'll receive monthly payments for appearances, social media posts, and community engagement. Then, during fall camp, you tear your ACL making a non-contact cut at practice.

The collective stops paying you.

When you question it, they point to a clause buried on page 7: "Athlete is eligible to receive a deduction in payments if athlete's marketability is impaired."

Injured? That's impairment. Payments stopped. Case closed.

Welcome to the injury loophole, the vague contract language that's allowing NIL partners to withhold payments from injured athletes, despite NCAA rules explicitly prohibiting compensation tied to athletic participation or achievement.

With revenue sharing now in play as of July 2025, the financial stakes of injury have never been higher. Athletes face a complex web of NIL deals, revenue share payments, scholarships, and insurance policies and understanding how injury affects each is critical to protecting your financial future.

In this article, we'll break down:

• How NIL contracts legally (and illegally) handle injury
• The "impairment" loophole companies use to stop paying you
• How revenue sharing is protected differently than NIL deals
• Insurance products that can protect your income
• Contract red flags every athlete should watch for
• How to negotiate injury protections before you sign

What NCAA Rules Actually Say About Injury and NIL

Let's start with what's supposed to protect you.

Current NCAA rules prohibit NIL contracts from including compensation tied to "athletic participation or achievement." This means an athlete's performance cannot be considered for NIL compensation which, in theory, should protect you if you're injured.

As protection for athletes, it is against current NCAA NIL rules for contracts to include stipulations that would decrease compensation or dissolve an agreement if a player is injured.

Clear, right? If you get hurt, your NIL deal should keep paying you.

But here's the problem: However, the extent of the athlete's protection may be based on the actual language of the contract itself. Companies and collectives attempt to protect themselves by using vague language.

And this is where things get dangerous.

The "Impairment" Loophole: How Contracts Work Around NCAA Rules

The most common workaround? The marketability impairment clause.

If an athlete's marketability is "impaired," payment could be stopped. One could argue a lot of things could fall into the bucket of impairment, including injury.

Think about that. Your "marketability" is impaired if:

• You're injured and can't play
• You're injured and aren't in the media
• You're injured and social engagement drops
• You're injured and lose followers
• You're injured and can't make appearances

Essentially, injury = impaired marketability = no payment.

Here's actual language from a Power Four collective contract shared with CBS Sports:

"Athlete is eligible to receive a deduction in payments if injured off campus, regardless of fault, or legal action that took place. Athlete is held responsible for any and all damages that may occur off campus, and will be expected to maintain good standing with university and NCAA policies and procedures barring a medical condition that prohibits the athlete from doing so."

Notice the phrases:

• "eligible to receive a deduction" (not "will," but "eligible" giving them discretion)
• "injured off campus, regardless of fault" (broad enough to include almost anything)
• "maintain good standing...barring a medical condition" (your injury could prevent you from fulfilling obligations)

This language doesn't explicitly say "we won't pay you if you're injured." But it creates enough ambiguity that the collective could argue non-payment is justified.

The Off-Campus Injury Clause

Perhaps even more insidious is the off-campus injury provision.

The logic: if you get hurt during official team activities (practice, games, training), that's part of your role as a student-athlete. But if you tear your ACL playing pickup basketball at the rec center? That's off-campus. Payments stopped.

Direct language about injuries that occur 'off-campus' may be utilized to withhold revenue.

Think about how broad "off-campus" can be interpreted:

• Working out at a private gym during summer break
• Training with a personal coach
• Playing in a summer league
• Even just...living your life and getting hurt

One NIL agent put it bluntly when reviewing these clauses: "If I'm representing an athlete, and I see [a clause like that] in there, the first thing I'm doing is I'm asking to have it removed, because I'm not having my athlete waive their payments on the off chance that they happen to get hurt in a contact sport, that's just kind of silly to me."

Would Collectives Actually Enforce These Clauses?

Here's where it gets interesting: Whether a collective would ever try to enforce such a clause is another thing entirely. It would be horrific public relations and overall recruiting strategy for a collective to withhold payments because a player got injured.

So in theory, collectives have leverage to withhold payment...but might not use it because of the PR nightmare.

But do you really want to bet your financial security on a collective's concern about bad publicity?

Consider this: One former Power 4 collective official told CBS Sports the most popular plan to handle injuries in the industry is to not have a plan at all, "which continues to shock me."

Translation: most collectives haven't thought through what happens when you get injured. They're making it up as they go.

How Revenue Sharing Is Different (And Better Protected)

Here's the good news: revenue sharing payments work differently than NIL deals.

Revenue sharing—the direct school-to-athlete payments that started July 1, 2025, allowing schools to distribute up to $20.5 million annually operates under different rules than third-party NIL contracts.

While NIL deals are private contracts between you and a company/collective (and thus subject to whatever terms you agree to), revenue sharing is governed by the House settlement and NCAA regulations.

The key difference: revenue sharing payments are structured more like scholarships than endorsement deals. They're based on your status as a rostered athlete, not your performance or marketability.

This means:

• Revenue share payments typically continue if you're injured
• They're tied to your roster spot, not your playing time
• They're more predictable and protected

However, and this is crucial, if injury causes you to lose your roster spot entirely (medical retirement, for example), you could lose both NIL deals AND revenue sharing.

Insurance: Your Real Protection Against Income Loss

Given the unreliability of NIL contract protections, insurance becomes critical.

There are two main types of insurance products athletes should understand:

1. Disability Insurance

This protects against career-ending injuries that prevent you from ever playing professionally.

• Covers loss of future professional earnings
• Typically purchased by top NFL/NBA prospects
• Can be expensive (premiums often $10K-50K+ per year)
• Payout only if injury ends your career entirely

2. Loss-of-Value Insurance

This protects against injuries that cause your draft stock to fall.

• Covers the difference between projected and actual draft position
• Example: Projected 1st round pick drops to 3rd round due to injury
• Payout is the salary difference between those positions
• More affordable than disability insurance

Companies like Players Health have emerged to help athletes and collectives get insured in the event of an injury. Players Health works with 40-50 universities across various divisions, including many FBS programs, tracking and managing player health data, injury reporting and compliance with safety protocols.

Some collectives are now purchasing insurance on their athletes, essentially protecting their own investment if you get hurt. But importantly, this protects them, not necessarily you.

Contract Red Flags: What to Watch For Before You Sign

Here are the specific clauses that should make you pause (or hire a lawyer):

🚩 "Marketability impairment" language → Too vague; can be used to justify withholding payment for almost any reason

🚩 "Off-campus injury" provisions → Gives them an out if you're hurt anywhere except official team activities

🚩 "At collective's discretion" payment language → Means they can decide whether to pay you or not

🚩 No defined "injury" terms → If the contract doesn't clearly define what constitutes an injury that wouldn't affect payment, assume the worst

🚩 Performance-based payment triggers → "If athlete starts X games" or "maintains playing time" = you won't get paid if injured

🚩 Broad "conduct" clauses → "Failure to maintain good standing" could include being unable to fulfill obligations due to injury

🚩 No injury exception for deliverables → If you're required to make 10 appearances but can't because you're injured, do you still get paid?

🚩 Immediate termination rights → Collective can end the deal "for any reason" = they can cut you when injured

How to Negotiate Injury Protections Into Your NIL Deal

If you're in a position to negotiate (and you should always try), here's what to push for:

1. Explicit Injury Protection Clause

Add language like: "Athlete shall continue to receive full compensation in the event of injury sustained during athletic participation, whether on-campus or off-campus, for the duration of this agreement."

2. Define "Impairment" Narrowly

If they insist on an impairment clause, define it: "Impairment shall mean only: (a) criminal conviction, (b) NCAA eligibility loss due to athlete's actions, or (c) voluntary withdrawal from athletic participation."

Notice what's NOT included: injury.

3. Injury Accommodation for Deliverables

"In the event athlete is unable to fulfill deliverables due to injury, parties will work in good faith to modify deliverables to accommodate athlete's physical limitations while maintaining compensation."

This means if you can't make in-person appearances, maybe you do social media content instead.

4. Guaranteed Payment Period

"Compensation shall be guaranteed for a minimum of [X months] following any injury, regardless of athlete's ability to participate in athletics or fulfill original deliverables."

This gives you a financial runway while you recover.

5. Remove Off-Campus Injury Language Entirely

Just strike it. If they won't, walk away. Any injury should be treated the same, whether it happens at practice or at home.

6. Insurance Requirements

"Company/Collective shall maintain loss-of-value insurance on athlete with [Company] naming athlete as beneficiary, with coverage of no less than $[X]."

Make them insure you. If they're worried about losing money if you get hurt, let them protect themselves with insurance rather than withholding your payments.

The Bottom Line: Protect Yourself Before You Sign

Here's the harsh reality: Added to the complexity of these issues is whether a company would try to enforce these clauses in a contract. One could imagine a public relations nightmare if a company withheld NIL payments due to a player's injury.

But "one could imagine" isn't good enough when your financial security is on the line.

The truth is this: NIL contracts are being written by lawyers hired by collectives and companies to protect their interests. Every ambiguous clause, every "at our discretion" provision, every vague "impairment" reference, they all tilt the scales away from you.

And in a contact sport where injury is not just possible but probable, you cannot afford to sign a contract that allows your income to disappear the moment you get hurt.

Your Action Plan:

1. Never sign a NIL contract without legal review → This isn't optional anymore; the stakes are too high
2. Specifically ask about injury scenarios → "What happens to my payments if I'm injured?" Get it in writing.
3. Push for explicit injury protections → Use the language above as a starting point
4. Consider insurance products → Especially if you're a high-level prospect
5. Understand your revenue sharing is separate → Don't rely on NIL as your only income source
6. Document everything → Keep copies of all contracts, payment records, and correspondence

The NIL era has created unprecedented opportunities for college athletes to earn money. But with that opportunity comes risk and vague contract language designed to shift that risk entirely onto you.

Read the fine print. Negotiate hard. Protect yourself.

Because when you're lying in that MRI machine with a torn ACL, the last thing you should be worried about is whether your NIL deal is about to evaporate.

Ready to Protect Your NIL Income?

At Courtside Wealth Partners, we work exclusively with athletes and entertainers to navigate complex contracts, protect your income streams, and build lasting financial security. We review NIL contracts, structure insurance strategies, and ensure you're protected when injury strikes.

Schedule a consultation with Courtside Wealth Partners today and let's make sure your contracts work for you, not against you.