Are high-profile college football teams and their names, images and collegiate groups simply trying to protect themselves from transfers willy-nilly or are they bullying players into staying put with the threat of lawsuits?
Adding liquidated damage fee clauses to NIL contracts will become common in 2025, a year that will be remembered as the first time players were paid directly by schools. But some experts say such fees cannot be used as a cudgel to punish players who breach the contract and transfer.
Not surprisingly, this issue has led to a lawsuit – before the calendar flips to 2026.
Less than a month after Georgia sued defensive end Damon Wilson II for $390,000 in damages because he transferred to Missouri, Wilson went to court himself, claiming Georgia was abusing the liquidated damages clause to “punish Wilson for entering the gate.”
Wilson’s countersuit in Boone County, Missouri, says he was among a small group of Bulldog stars who were pressured to sign a contract on Dec. 21, 2024. The lawsuit also alleges that Wilson was abused as an elite pass rusher, and that Georgia’s defensive scheme called for him to return to pass coverage. Wilson, who will be a senior next fall, led Missouri with nine sacks this season.
Georgia paid Wilson $30,000, the first monthly installment of his $500,000 deal, before he entered the transfer portal on Jan. 6, four days after Georgia lost to Notre Dame in the quarterfinals of the College Football Playoff.
Bulldog Brass was not happy. Wilson alleges in his lawsuit that Georgia was slow to put his name in the portal and spread misleading information to other schools about him and his contractual obligations.
“When the University of Georgia Athletic Association enters into binding agreements with student-athletes, we honor our obligations and expect student-athletes to do the same,” University of Georgia spokesman Stephen Drummond said in a statement after the school filed the lawsuit.
Wilson’s countersuit turns that comment on its head, claiming it damaged his reputation because it suggested he was dishonest. He is seeking unspecified damages as well as not owing the Bulldogs anything. The lawsuit filed in Georgia requested that the dispute be resolved through arbitration.
A liquidated damages fee is a pre-determined amount of money written into a contract that one party pays to the other for specific violations. These fees are intended to provide a fair estimate of expected losses when actual damages are difficult to calculate, and cannot be used to punish one party for breach of contract.
The Wilson case could have far-reaching implications because it is the first that could determine whether schools can enforce liquidated damages clauses. While it may be understandable that schools would want to protect themselves from players moving on shortly after receiving nothing money, legal experts say liquidated damages fees may not be the appropriate way to do so.