Power Conferences Forge Ahead with Sweeping NIL Regulations Amidst Settlement Approvals
Even as a federal judge’s final approval hangs in the balance for the proposed multi-billion-dollar settlements resolving three athlete-compensation antitrust cases against the NCAA and the Power Five conferences, leading conference officials are actively developing a comprehensive blueprint for implementing and enforcing what promises to be a monumental overhaul of existing rules impacting schools and athletes. These changes, while integrated into the NCAA’s existing Division I rulebook, would be primarily managed by the power conferences themselves, signaling a significant shift in governance.
Sources familiar with the conferences’ intentions reveal the creation of a new regulatory and enforcement entity, led by a chief executive officer mirroring the role of a commissioner in professional sports leagues. This independent body would focus exclusively on matters related to athlete compensation, name, image, and likeness (NIL) regulations.
U.S. District Judge Claudia Wilken has granted preliminary approval to the proposed settlements, with a final-approval hearing scheduled for April 7. The agreements encompass nearly $2.8 billion in damages earmarked for current and former athletes over a ten-year period. Furthermore, they would empower Division I schools to directly compensate athletes for the use of their NIL, beginning in the 2025-26 academic year, subject to a per-school cap that would gradually increase based on a percentage of specific athletics revenues.
Beyond direct payments from schools, the settlement also seeks to establish enforceable guidelines for NIL payments sourced from entities outside the schools. Under the proposed agreement, all Division I athletes, regardless of their school’s decision to offer NIL payments, would be obligated to report non-school NIL deals exceeding $600 to a newly established clearinghouse. These deals would then be subjected to review, with the aim of preventing pay-for-play arrangements and agreements that provide compensation exceeding market value.
Currently, the NCAA has regulations prohibiting athletes from receiving pay for play and from entering into NIL deals that serve as an inducement to enroll or remain enrolled at a particular institution. However, enforcing these rules has proven extremely difficult. This stems from the increasing prevalence of school-specific collectives, which are donor groups dedicated to pooling resources for NIL payments. These collectives are often loosely based on the genuine value of an athlete’s NIL rights or their promotional contributions.
The challenging task of enforcing the cap on NIL payments from schools and establishing reporting and evaluation protocols for athletes’ non-school NIL deals has been delegated to the Settlement Implementation Committee. This committee comprises ten athletics directors, with two representatives from each of the five conference defendants. The committee collaborates with legal and compliance officers from the conferences and the NCAA.
The committee faces a complex array of procedures and processes. To address these complexities, the committee has established four distinct working groups. The committee is also partnering with LBi Software to develop a cap tracking system. LBi Software has worked with professional leagues like MLB, NBA, and NWSL. They are also working with Deloitte Consulting LLP to create a system for assessing athletes’ third-party NIL deals.
Among the critical issues being addressed are:
- Tracking and Enforcement of School NIL Payments: The procedures for entering and tracking schools’ NIL payments to athletes, as well as strategies for addressing attempts by schools or boosters to circumvent the cap, are being meticulously examined. Significant penalties are being considered for non-compliance, sending a clear message of accountability.
- Evaluation of Third-Party NIL Deals: The processes for handling and evaluating athletes’ third-party deals are under review, including the repercussions of a deal not being approved. Athletes would bear the responsibility for submitting their agreements for evaluation. While "fair market value" has been mentioned as a potential benchmark, the assessment may focus on whether the arrangement involves the use of an athlete’s NIL to advance a legitimate business purpose and whether the compensation falls within an acceptable range for similarly situated individuals. The data gathered would hopefully create a more clear range over time.
- Appeals Process: The committee is working to establish clear communication channels with athletes, who would have the right to appeal deals that are initially rejected to neutral arbitrators. These arbitrators would be selected by lawyers representing the plaintiffs and the conferences/NCAA.
The ten athletics directors serving on the implementation committee are Trev Alberts (Texas A&M), Scott Barnes (Oregon State), Mitch Barnhart (Kentucky), J Batt (Georgia Tech), Ross Bjork (Ohio State), Pat Chun (Washington), John Cunningham (Cincinnati), Graham Neff (Clemson), Anne McCoy (Washington State), and Desiree Reed-Francois (Arizona). Their collective experience and expertise are essential for navigating the intricacies of implementing and enforcing these transformative regulations.
The proposed settlements and the ensuing implementation efforts represent a critical juncture for college athletics. The Power Five conferences are taking proactive steps to establish a new framework for athlete compensation, signaling a potential shift in the power dynamic within the NCAA. While challenges undoubtedly lie ahead, these initiatives underscore a commitment to adapting to the evolving landscape of college sports and ensuring a more equitable and sustainable future for student-athletes. The coming months will be crucial in shaping the final form of these regulations and determining their long-term impact on the NCAA and the world of college athletics.
