As the tee-off for this year’s Masters Tournament fast approaches, our BL Business Branding entry looks into a recent lawsuit won by golfing legend Jack Nicklaus. The 6-time Masters winner recently prevailed in a convoluted legal journey that ultimately allowed him to use his own name, image, and likeness (NIL) once again.
With multimillion NIL deals for athletes making news across the sports world, it’s never been a more appropriate time to break down exactly what can happen when a NIL deal goes south.
In the mid-1980s, 18-time major winner Jack Nicklaus started a new business, GBI Investors (originally Golden Bear International), to handle the sale of his golf course designs, NIL licensing, and endorsements. In 2007, Nicklaus added a minority share partner to his business when he sold assets to New York banker Howard Milstein for $145 million. This deal and its various agreements led to the creation of Nicklaus Companies, LLC, which bundled all of Nicklaus’ golf course design, trademark, and endorsement ventures, along with a few smaller businesses, and transferred them to the new entity. Nicklaus held a 51% stake in the new company, and Milstein held the remaining 49%.
Over the next decade, the business relationship between Nicklaus and Milstein turned sour. Disputes regarding control of the company, lack of respect, and various he-said, he-said arguments eventually led Nicklaus to terminate his employment in June 2017. As part of his executive employment agreement, Nicklaus had agreed to a five-year noncompete clause that prevented him from designing golf courses and endorsing products. He believed that, once the five years were up, he could complete additional golf course design and licensing under a new company. Milstein disagreed, saying that Nicklaus Companies, LLC owned and had exclusive use of Nicklaus’ name, image, and likeness for the design and sale of golf courses following the 2007 deal. Milstein, via Nicklaus Companies, LLC, sued Nicklaus in 2022, claiming his attempts to design commercial gold courses under a new company resulted in a breach of contract, tortious interference with contract, and breach of fiduciary duty.
Following a convoluted legal battle that involved various layers of agreements, an AI version of Jack Nicklaus, allegations of backing the Saudi LIV golf league, and a separate, ongoing defamation lawsuit, the verdict is in. The 2007 deal where GBI’s assets, including intellectual property, were acquired by Nicklaus Companies, LLC included the specific trademarks GBI owned. It did not include exclusive use of Nicklaus’ NIL rights because the company was the vehicle he used to license them, not the owner.
Exclusive is the keyword here. Under the summary judgment granted, both Jack Nicklaus and Nicklaus Companies, LLC both have some use of Nicklaus’ brand. Thanks to the trademarks the company acquired in the 2007 purchase, it can continue to sell merchandise and design golf courses under the Nicklaus brand, including commercial use of the “Golden Bear” trademark. Jack Nicklaus can use his own name, image, and likeness (NIL) to continue designing commercial golf courses. However, his ability to use the “Golden Bear” nickname is limited to non-commercial use.
What Can Businesses Learn From This?
NIL deals and licensing agreements can be lucrative business opportunities for companies and highly recognizable individuals looking for a mutually beneficial partnership. However, allowing another entity to use your identity is a slippery slope, and maintaining control of how you are portrayed publicly is difficult to reclaim once business deals start locking pieces down behind contracts and exclusivity agreements. Contracts between parties need to be crafted carefully, and the difference between licensing NIL for use versus a sale of ownership needs to be abundantly clear to avoid future disputes.
Have questions about how crafting NIL deals and corporate transactions can help protect your business? Contact our BL Trademark Team by reaching out to Seth Berenzweig at sberenzweig@berenzweiglaw.com today.