The Price of the Transfer Portal: What Happens to an NIL Deal When a Student-Athlete Transfers?

Key Takeaways

• NIL agreements may carry enforceable exit costs despite transfer rights. The University of Georgia Athletic Association’s action against former linebacker Damon Wilson II shows that NIL contracts may impose liquidated damages when student-athletes transfer, even though NCAA rules permit mobility.
• Liquidated damages clauses are becoming a central NIL risk factor. UGAA’s demand for approximately $390,000 emphasizes how termination provisions tied to transfer, withdrawal from a team, or unenrollment can expose student-athletes to substantial financial liability.
• Athletes and advisors must reassess transfer and contract strategy. As NIL enforcement increases, student-athletes should carefully evaluate timing, dispute-resolution terms, and potential exit costs, as well as negotiate protections that preserve transfer flexibility before entering NIL agreements.

The University of Georgia Athletic Association (“UGAA”) is drawing a line in the sand: contracts between athletic departments and student-athletes are binding and enforceable, even when players exercise their right to transfer. This move could set a powerful precedent for how NIL agreements are enforced across college sports.

UGAA v. Wilson

UGAA recently filed an Application to Compel Arbitration against former linebacker Damon Wilson II in the Superior Court of Athens-Clarke County. In its Application, UGAA alleges that Wilson breached an agreement between UGAA’s predecessor-in-interest, Classic City Collective, Inc., and Wilson (the “Agreement”) for a license to use Wilson’s name, image, and likeness (“NIL”) in exchange for the payment of fees to Wilson.

Wilson played for UGA during the 2023 and 2024 football seasons. Wilson and Classic City Collective executed the Agreement on December 21, 2024, a few weeks before UGA appeared in the 2024 College Football Playoff. On December 25, 2024, Classic City Collective paid Wilson $30,000 as the first installment under the Agreement. Subsequently, on January 6, 2025, Wilson notified UGA of his intention to enter the NCAA Transfer Portal, and later that month, withdrew from the football team and from the University. Classic City Collective assigned its rights under the Agreement to UGAA.

UGAA alleges that Wilson breached the Agreement when he notified UGAA of his intention to transfer, withdrew from the football team, and withdrew his enrollment at UGA. Under the terms of the Agreement, any one of these actions entitled UGAA to terminate the Agreement and seek liquidated damages equal to all remaining licensing fees. That adds up to $390,000, the remaining fees under the Agreement after the initial payment of $30,000 to Wilson.

Moving Forward

On its face, this case is a straightforward breach‑of‑contract dispute. But beneath the surface, this case could impact NIL deals across collegiate sports — players can move freely, but deals may carry real financial consequences when they do.

Student-athletes at power-conference schools now benefit from three money streams, including school revenue sharing, NIL deals, and scholarships. Although these revenue streams expand student-athletes’ opportunities to monetize their NIL, they concurrently increase exposure to legal liability for breaches of NIL agreements.

Now that UGAA has set this precedent, more cases of this nature will surface. With that forecast in mind, student-athletes and their advisors should weigh the student-athlete’s exposure before entering the transfer portal, factoring in potential exit costs, timing, and dispute-resolution terms embedded in their contracts. Even more, advisors should counsel student-athletes in the negotiations of their NIL agreements to ensure the student-athlete’s interests in freely transferring are protected.