The NCAA is weighing a rule that would require incoming Division I athletes to disclose name, image and likeness (NIL) deals from high school or junior college to the NIL Go clearinghouse established under the $2.8 billion House settlement.
Athletes would report all non-institutional deals dating to the first day of their junior year. Junior college transfers would report deals from the date of initial enrollment at a two-year college. All reporting of previous deals would be due to the College Sports Commission upon enrollment.
NIL compensation at the high school level has rapidly expanded in recent years. At least 40 states allow high school students to earn money off their celebrity status. Alabama, Michigan and Ohio are among the states that have strict restrictions, including Texas, which prohibits athletes under 17 from pursuing deals.
The proposed rule stems from the House settlement, which allows institutions effective July 1 to share millions with athletes directly but requires reporting of any third-party deal exceeding $600. NIL Go, developed by Deloitte and overseen by the CSC, evaluates whether deals reflect fair market value and serve a valid business purpose, a topic of some controversy.
The potential rule aims to prevent pay-for-play deals between prospective athletes and boosters or school-affiliated entities. The exact consequences of failing to comply are still being determined, but lost eligibility is a possibility.
“It’s unclear what the discipline would be for athletes or third parties that violate these rules, just like it’s just not entirely clear what the discipline will be for current college athletes,” said Gabe Feldman, director of sports law at Tulane University. “The emphasis certainly seems to be on not unduly harming the athlete themselves and the team, whereas in the past, if an athlete had received an improper benefit, there could be significant repercussions.”
A tidal wave of lawsuits could stem from a new rule, but according to Feldman, the NCAA tends to like its odds – a recurring theme leading up to the settlement approval.
“The idea was that given how much money athletes would be making under these new rules, very few athletes would have incentive to sue,” Feldman said. “Even though there is still the risk of antitrust litigation, the risk is much smaller because the athletes are getting such significant compensation. But there is no guarantee that athletes can’t sue.”
Language in the House settlement kept the door open for future rule proposals, including “specifying that the NCAA and/or the conference defendants prohibit NIL payments by associated entities or individuals (individually or collectively) to current or prospective student-athletes..” But that may leave loopholes.
“The question remains, if an athlete is going to be held to these expectations once they are enrolled at a university, does this just incentivize boosters and collectives to pay these athletes before they’re enrolled?” Feldman said.
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