NIL Update: NCAA D1 Council To Review Impact Of NIL On Student-Athletes

The NCAA Division 1 Board of Directors have instructed the Division 1 Council to prepare an extensive review on the impacts student-athletes are facing due to the new name, image, and likeness (NIL) landscape in college sports. Specifically, the Board of Directors are concerned with the influence of school choice, transfer opportunities, academics, and mental health. The preliminary report is to be finished this month with final recommendations in June. 

ADDRESSING THE BOARD OF DIRECTORS CONCERNS

The NCAA’s Announcement of the review alludes to the scrutiny drawn from multiple schools and coaches surrounding the NCAA’s policy changes. Board chair and President of the University of Georgia, Jere Morehead, said “We are concerned that some activity in the [NIL] space may not only be violating NCAA recruiting rules, particularly those prohibiting booster involvement, but may be impacting the student-athlete experience negatively in some ways… We want to preserve the positive aspects of the new policy while reviewing whether anything can be done to mitigate the negative ones.” 

Without specifically saying it, Morehead is referring to the influx of “whole-team deals” that are funded by boosters. See NIL Update: BYU, Miami Being Investigated For NIL Violations – Gjording Fouser (gfidaholaw.com). Further, Morehead’s comments seem to refer to the NCAA’s policy change that allows student-athletes to transfer schools and immediately be eligible to play—a departure from the NCAA’s earlier rule that required transferring student-athletes to sit out for a full year. 

As the NCAA has tried, often in vain, to maintain some level of amateurism in college sports over the years, it’s no wonder that the Board of Directors have called for an extensive review of its policy changes. A preliminary report is expected to be provided to the NCAA by April and a final report – with recommendations for possible future action – is expected in June. 

The NCAA will have to walk a fine line if it wants to introduce any sort of meaningful regulation. As Nicole Auerbach of The Athletic put it: “not only [is the NCAA] trying to put the toothpaste back in the tube here in general, but they’re also trying to do this without getting sued. Look for the NCAA to try to regulate the schools, not the athletes themselves due to this.”

One mechanism that the NCAA is likely looking at is precluding schools from facilitating NIL deals in any way for their players. Such a mechanism would, if structured appropriately, prevent schools from facilitating deals like BYU did with Built Bar. As we have previously written, BYU’s Built Bar deal almost certainly violates the NCAA’s prohibition on pay for play policy. The deal also effectively allows BYU to flaunt the NCAA’s 85-scholarship limit for FBS Football. If the NCAA cannot prevent schools from structuring deals like BYU did with Built Bar, it will mean that the NCAA has been almost completely defanged. 

Student-athletes should consider the rapidly changing nature of NCAA regulation when negotiating NIL deals. Student-athletes should ensure that they are able to exit or modify an NIL deal in the event that future NCAA regulation makes the NIL arrangement contrary to NCAA policy.

IS THERE “FREE AGENCY” IN COLLEGE SPORTS?

Many commenters believe that the NCAA’s policy changes have created year-round free agency for student-athletes through the transfer portal. By way of statistics, more than 3,400 DI, DII, and DIII student-athletes have entered the transfer portal over the last four months. 

Ole Miss Football head coach Lane Kiffin gave his opinion on the transfer portal, saying “[L]et’s not make a mistake: We have free agency in college football… The kids a lot of the times go to where they’re going to get paid the most. No one else is saying that, maybe. But the kids say, ‘This is what I’m getting here for NIL.’” 

Earlier this year, Coach Kiffin became a direct beneficiary of what he described as free agency after University of Southern California (USC) quarterback Jaxson Dart entered the transfer portal and shortly thereafter committed to Ole Miss. Dart, a former 5-star recruit, and seemingly the next man up at starting quarterback at USC, was forced out after USC poached Lincoln Riley away from Oklahoma. Coach Riley was able to bring Oklahoma star quarterback Caleb Williams with him through the transfer portal. 

NIL and the transfer portal are now thoroughly intertwined. Student-athletes should consider the potential implications of entering the transfer portal when negotiating NIL deals.

INSIGHTS FOR GF CLIENTS

Gjording Fouser will continue to track any announcements from the NCAA and keep you apprised of the preliminary report once it is published later this month. 

Please contact a Gjording Fouser lawyer at 208.336.9777 if you would like any additional information about this topic or any other issues facing your company.

1 Though it is beyond the scope of this blog post, schools would be wise to distance themselves from all NIL deals, regardless of whether the NCAA is able to adopt effective regulation. Arranging de-facto scholarships for male football players without doing the same thing for female student-athletes, like BYU appears to have done, raises serious Title IX questions. For a thorough analysis of the interplay between Title IX and NIL, see Alicia Jessop & Joe Sabin, The Sky Is Not Falling: Why Name, Image, and Likeness Legislation Does Not Violate Title IX and Could Narrow the Publicity Gap Between Men’s Sport and Women’s Sport Athletes, 31 J. Legal Aspects Sport 253 (2021) (“Related to acting as agents for or helping procure endorsements for intercollegiate athletes, an athletics department’s engagement in this practice could pose Title IX risks. That is because, if the athletics department secured greater endorsement compensation for one gender’s athletes over the other gender’s athletes, a violation of Title IX’s equal athletic benefits and opportunities standard could be triggered.”).