Hank's IP Brew — Issue #5

Howdy, y'all.

This week: a clever workaround that's letting Nike and Adidas funnel extra money to college athletes — and a lawsuit that puts Google in a position it spent years watching other companies squirm in.

Let's go.

When the University of Tennessee announced it was switching from Nike to Adidas last summer, the announcement buried the real story in a single sentence: the new deal would offer "unprecedented NIL opportunities for student-athletes."

That wasn't marketing language. It was a financial structure.

Here's the setup: the House settlement capped direct revenue sharing between schools and athletes at $20.5 million per school for the 2025-26 year. That's the ceiling. But there's no cap on third-party NIL money — as long as deals are approved by the College Sports Commission.

So apparel companies, which already pay schools tens of millions to outfit their teams, are now baking NIL commitments directly into those contracts. Adidas is allotting money to Tennessee for NIL deals with specific athletes. Nike launched a new NIL collective — "Blue Ribbon Elite" — in connection with its LSU extension. Under Armour's Wisconsin deal includes a minimum NIL commitment of $175,000 per year. And at Texas Tech, the athletic director is asking Adidas and other corporate sponsors to redirect money intended for the athletic department directly to athlete NIL deals.

The effect is exactly what it looks like: above-cap compensation for athletes at Power Four schools, engineered through third-party channels that the revenue-sharing framework was never designed to close. It's not illegal — the College Sports Commission has to approve individual athlete deals, and the framework expressly allows third-party NIL. But it does widen the gap between blue-blood programs with nine-figure apparel deals and everyone else.

For athletes currently navigating this landscape — especially those weighing transfer decisions or negotiating with collectives — two things are worth knowing.

First: the value of your NIL isn't just about your individual deal. It's also about which program you're in and who's writing the checks for that program's athletes. The apparel contract your school signs is now, in a real sense, part of your compensation package.

Second: the structure of these arrangements is getting more complex, not less. An "NIL opportunity" buried in an institutional contract is not the same thing as a direct endorsement deal you control. Know what you're agreeing to — and who can change the terms.

Google has spent the last two years watching Suno and Udio get sued by the major labels over AI music training. Now it's Google's turn.

On March 6th, a group of independent artists, songwriters, and producers filed a copyright infringement lawsuit against Google, alleging that its Lyria 3 model — launched last month through the Gemini app — was trained on music pulled from YouTube without licensing it for AI purposes.

The lawsuit's core argument is blunt: Google didn't need to copy. It already owns YouTube. It has Content ID. It has long-standing relationships with major labels and distributors. It had the infrastructure, the relationships, and the money to license training data properly. It chose not to, "not because licensing was impossible, but because copying was faster and cheaper."

The plaintiffs are six indie acts — singer/songwriters, composers, a folk duo, an R&B group — none of whom had any licensing deal with Google. All of them publish on YouTube. All of them allege their work was swept up into Lyria's training data without their knowledge or compensation.

The case is a proposed class action, and it lands with a specific claim that goes beyond "you used our songs": the lawsuit argues that Lyria 3 generates outputs that directly compete with sync licensing and other work that its training artists would otherwise be hired to do. Not just copying — displacement.

Google's response, so far, is that Lyria trains on content it has "a right to use under our terms of service, partner agreements and applicable law." That's a familiar defense. It's also the same argument Suno and Udio made before Udio settled with two major label groups in late 2025.

For indie creators with music on YouTube — which is essentially everyone — this case matters even if you never sue anyone. It's asking the question that the platform era has mostly avoided: does uploading your music to YouTube, under YouTube's terms of service, mean Google can use it to train an AI that then competes with you? Courts are going to have to answer that eventually. This case may be the vehicle.

In the meantime: if you're building a music career, a production business, or any creative practice that lives primarily on platforms you don't own — read the terms of service. Not because you can necessarily change them. But because you should know what you've already agreed to.

See you next time,

Hank

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