Johnny Loophole?

Johnny Manziel (AKA “Johnny Football”), the reigning Heisman Trophy winner, has been living it up in the off-season.  Social media has documented Manziel at the Super Bowl, Mardi Gras, courtside at NBA games, partying on Spring Break, flashing fistfuls of cash at a casino in Oklahoma, and hanging out with celebrities like Justin Timberlake, LeBron James, Chris Paul, James Harden, and Rob Gronkowski. (In addition to being the first freshman to win the Heisman Trophy, Manziel was the winner of the Davey O’Brien National Quarterback Award, Manning Award, SEC Offensive Player of the Year, Sporting News College Football Player of the Year, SEC Freshman of the Year, and a Consensus First-Team All American). Now, Manziel may have a new accomplishment to add to his laundry list of awards: he could become the first active student athlete to be paid–legally.

Generally, student athletes are forbidden from making any money while they remain in school.  Student athletes that are found to have received any money during their time at school are considered ineligible and their school often receives harsh penalties from the NCAA.  Manziel, however, may have found a legal loop-hole that puts money in his pocket and keeps him on the field.

Early in the season Johnny Manziel became known as “Johnny Football,” and the Manziel family attorney wisely suggested that they trademark the moniker.  The family set up a corporation, called JMAN2 Enterprises, and filed for the trademark with the U.S. Patent and Trademark Office.  The attorney soon found all kinds of people cashing in on “Johnny Football,” and he began suing.  Early in February 2013, JMAN2 filed suit against Eric Vaughn, a man who was selling $20 t-shirts that read “Keep Calm and Johnny Football.”  Even though JMAN2 did not file its trademark with the USPTO until February 2, the trademark may be protectable under both state common law and Section 43(a) of the Lanham Act until the formal registration process is complete.

This is where it gets interesting.  Texas-A&M’s compliance department received a ruling from the NCAA that “a student-athlete can keep financial earnings as a result of legal action.” And not when Manziel finishes or decides to leave school–NOW!  This led some to speculate that boosters of a school might intentionally “infringe” on an athlete’s trademark as an indirect way of paying them.  However, courts would likely see through this fraud and players would not likely be able to profit from this type of sham lawsuit.

The real potential profit for players like Manziel would be to sue Texas A&M, the NCAA, the SEC, the Cotton Bowl, and anyone else who has been profiting from the name “Johnny Football” for the last year without paying Manziel a dime.  A study by Joyce Julius & Associates found that, last season alone, Manziel was worth $37 million in “media exposure” for Texas A&M.  The school bookstore sold out of all 2,500 jerseys it had by December.  The Collegiate Licensing Company has estimated that winning the Heisman increases your sales and royalties 27.5% over five years. (Could you imagine if he wins another?)

So, while Manziel may be able to rake in a fair amount of money from the Eric Vaughn’s of the world (a guy on eBay who claims to have sold 625 “Johnny Football” shirts for $20 apiece), this may only be the tip of the iceberg.

(For further reading on paying student athletes and student athlete’s likeness rights, see the author’s Student Note, Intercepting Licensing Rights: Why College Athletes Need a Federal Right of Publicity.)

–Talor Bearman

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5 Responses to “Johnny Loophole”?

  1. Raymond Rufat says:

    I think the point you draw about fraudulently inducing lawsuits is very important. I think this severely limits the ability of student athletes to profit from this kind of scheme. Even if Johnny Football were to prevail in this instance by suing his school etc…the precedent it would set would likely correct any negative effects. People would simply stop using the trademark on their items and that would be the end of it. It is not as if he could start licensing the trademark because then he would fall outside the “collecting money from lawsuits” provision. Furthermore, the Eric Vaughn’s of the world surely do not want to subject themselves to a lawsuit. That said, there are ways for the courts to avoid the booster fraud, by limiting the damages to injunctive relief or by having extremely high punitive damages for this kind of action, which would severely deter boosters.

  2. Jonathan Hoffmann says:

    Am I the only person who doesn’t have skin in this game? I’ve heard the arguments for and against students receiving payment. I know that this an amateur endeavor and these are students. I know that this is a deep and lucrative business. For me, the intrigue comes from moments like this, where a player tries something entirely new and the NCAA concedes. Thanks for the note Taylor. With any luck, this will keep the debate alive and evolving.

  3. Thomas M. says:

    The school already has the rights to the players name and numbers while they are in school. Players aren’t allowed to profit off of their name while they are in school. A story recently came out about a Minnesota wrestler who lost a year of eligibility because he wrote and produed a rap song under his own name. The song hasn’t even broke even on production costs, but since he used his name the NCAA sanctioned him. The whole point of the “Johnny Loophole” is that its not the player who is technically profitting, its the corporation, JMAN2 enterprises in this case.
    As far as the school drafting a provision in the NLI, that’s a no go as well. I think the NLI is a boilerplate form that comes from the NCAA itself. Each school just fills in its name. So any change to the NLI would have to come from the NCAA itself. I have a feeling the NCAA is trying desperately to find a way to get at Manziel due to his seemingly mocking of the system with all of his social media pictures. However, since the NCAA is facing several suits which have the potential to completely dissolve the NCAA’s “amateur” system. Hopefully, that’s what happens since the NCAA might be the last remaining iron-fist monopoly.

  4. Jacob Schumer says:

    I wonder if this means that Kevin Ware can now sue Louisville and Adidas for that t-shirt debacle?

    Brief summary: After Ware exposed his leg parts on a hard landing in a Tournament game, he became a national object of empathy and admiration. Louisville seized the opportunity and sold some inspirational t-shirts incorporating Ware’s #5, and by association, Ware himself.

    Obviously, this is a different case since Ware clearly did not trademark his number. However, this seems like a very strong right-of-publicity case (which Kentucky does indeed recognize). I doubt the NCAA will take kindly to member schools paying its players for these kinds of breaches.

  5. Ryan Loofbourrow says:

    I wonder what this will do for the provisions of the players’ Letters of Intent to sign with a university? The schools could potentially draft a provision that would require the “Johnny Footballs” of college football to assign their trademark rights to the school for any trademarks associated with them playing college football. This would potentially increase the revenue for the school while taking money away from the student-athlete. The NCAA could potentially do the same thing in order to avoid allowing student athletes to get paid while also increasing revenue. This could be just the beginning of trademark registration for college football players, and the schools and the NCAA will want to cash in on this area as well.