Photo via Golfweek – USA Today
Jack Nicklaus, the world’s greatest golfer, and arguably one of the best course designers, finds himself in litigation against his old business partner, Howard Milstein. In 2007, Milstein bought Nicklaus’s intellectual property and golf course design services for $145 million. Milstein’s business, Nicklaus Companies LLC, sued Nicklaus in May, alleging the he improperly went out on his own, and is now directly competing for golf course design projects and personally negotiating to reup his endorsement deal with Rolex SA. This may seem reasonable, given Nicklaus’s noncompete agreement with the company expired in 2017, but the new world of name, image and likeness (NIL) makes this increasingly more complex.
The argument is not if Nicklaus can challenge Nicklaus Companies for design projects because the noncompete has run its course. Rather, the challenge for Nicklaus lies with the fact the judge ruled that there is no such end date for the transfer of Nicklaus’s NIL. Justice Cohen stated, “Whatever might be true under the noncompetition agreements, the plaintiffs own this intellectual property, and that isn’t something that expires. The exploitative value of his name as an endorser of products and the like is where the line is drawn.”
The way this case is determined will likely have long term effects on all athletes when it comes to their NIL. Although the company may own Nicklaus’s NIL rights, that does not mean they can do much with them without his willingness. This situation is tricky, and ultimately the only positive solution would be if the two sides were to come to a mutually collaborative resolution. Nicklaus is still heavily involved in the golf world and he seems to have the passion and drive to continue working to grow the sport.
An important quote from the hearings was Nicklaus talking about the deal where he signed away his intellectual property rights. He stated, “he left the specifics up to his then-counsel Latham & Watkins LLP” and “To be honest with you, I didn’t read it, I was just told something I should do.” It should be noted that NIL was not relevant at the time, and it would have been challenging to foresee so much as to put a provision within a contract protecting this.
This suit should act as a lesson for athletes, institutions, lawyers and anyone involved in these contracts moving forward. This is an emerging landscape that has long-term ramifications unseen yet. Young athletes need to be mindful of the deals they are engaging in and the details involved. In Nicklaus’s case, he already went through a full professional career as an athlete and a businessman, but in the case of college athletes a deal like this could keep them from earning money from their NIL that would change the dynamic of their lives and their careers. Any professional who is or intends to engage in the NIL landscape should follow this suit to see how the court acts on a dispute over one of the world’s greatest golfers NIL and the precedent it sets for future athletes’ NIL.
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