New NCAA NIL Clarifications Expose College Athletes To Risk By Removing Schools From The Process

On October 26, 2022, the Division I Board of Governors voted unanimously to modify the NCAA’s name, image and likeness (NIL) policy with clarifications that significantly restrict the role that schools serve in securing and facilitating NIL deals for their college athletes. By removing schools from the process, college athletes are now left to manage the commercial value for their NIL without any meaningful protection or oversight from either the NCAA or their schools.

There are various issues addressed within the NCAA’s clarifications , but central to the new rules are prohibitions against schools and their athletic departments from participating in the provision of NIL services for their college athletes. This means that schools are no longer permitted to provide college athletes with NIL representation, or to facilitate NIL deals on behalf of their college athletes.

As a result, college athletes are now left on their own in navigating potentially perilous waters because not everyone in the NIL space have the best interests of college athletes at heart. In fact, professional sports is rife with examples of bad actor agents harming the athletes they are supposed to serve. Whereas most professional athletes have some degree of protection in the form of agent certification and the implementation of caps on fees by player associations for professional leagues, no meaningful regulatory agency or process exists to police those who desire to represent college athletes in NIL deals. The NCAA’s new clarifications block schools from providing that type of gatekeeping role, or from participating in the facilitation of NIL deals for athletes.

For example, the new clarifications seemingly prevent the University of South Carolina (USC) from seeing through with their plan to provide free NIL representation via a partnership with Everett Sports Marketing, one of the most reputable sports marketing firms in the industry. USC spent $2 million to bring Everett Sports Marketing in-house and so as to provide their students with free, reputable representation in the management of their NILs.

Granted, at this point and time it is unclear as to whether the NCAA intends to enforce its new clarifications in a way that would prevent USC and Everett from going through with their plans. However, the clarifications point in that direction.

It’s one thing to prevent a school from demanding that their athletes work with an in-house firm, and it’s very much another to prevent schools from providing free in-house services. The NCAA should not be in the business of placing road blocks in front of efforts like those adopted by USC, efforts designed for the benefit and protection of college athletes. The NCAA is unable to spin regulatory roadblocks that deny athletes of free NIL services as serving the interests of college athletes. Quite the opposite is true in fact.

This begs the question—Who is served by these new clarifications?

There is no clear answer to that question found within the NCAA’s clarifications. Still, it doesn’t take a super sleuth to solve the puzzle. The new NIL restrictions are obviously cost-saving measures, likely implemented to provide economic protection for NCAA member institutions that lack the resources needed to provide their college athletes with the same level of NIL services that other programs can afford.

The NCAA is a member-managed association and in this case, the membership has chosen to manage in a way that prioritizes the interests of some under-achieving athletic departments at the expense of the athletes who are in need of both guidance and protection in the NIL process.

These new NIL clarifications have generated criticism on Twitter and are likely to invite more litigation for an already embattled NCAA that has been left bloodied by the Supreme Court’s ruling against it in NCAA v. Alston. In Alston, the Department of Justice (DOJ) argued before the Court on behalf of the college athlete litigants. And in January of 2021, the Department of Justice also sent a letter to the NCAA, warning of potential antitrust violations if the NCAA were to adopt rules that went too far in restricting college athletes in the commercial use of their NIL. It is possible that this new round of clarifications from the NCAA run afoul of the DOJ’s vague warnings, leaving the NCAA vulnerable to litigation that challenges those clarifications.

It is important to note that the Supreme Court in Alston preserved within the NCAA the authority to block schools from providing direct compensation to college athletes. Yet, also found within Alston is Justice Kavanaugh’s concurring opinion in which he questioned the merits of the NCAA’s legal justification for preserving amateurism through rules that prevent direct payments to college athletes. The NCAA’s legal argument posits that its rules are necessary for protecting the amateur status of college athletes and that consumers value that amateur status to the point that they would stop or slow their consumption if college athletes were to be paid like professional athletes.

Unfortunately for the NCAA, that legal justification for its amateurism rules has been undermined both by its own acts and reality. After all, since July 1, 2021, whatever thin veil of amateurism that once covered college athletes has since been lifted. Since that date, the NCAA has looked the other way as schools involved themselves in the NIL process and while college athletes began to earn money for the commercial use of their NIL. And yet, the reality of the situation reflects that consumers still watch games and buy merchandise for their favorite schools. Thus, it seems unlikely that the NCAA will be able to sell the legal argument that reinstating the lost regulatory control over member institutions now is needed to protect consumer interest in what the NCAA produces. For lack of a better analogy, the toothpaste left the tube back on July of 2021.

Still, without any regulatory oversight from the NCAA, or the hands-on guidance provided by member schools, college athletes responding to agent malfeasance will be left to seek protection from state-level sport agent legislation that is so toothless that few have relied on it for help. Perhaps more important to this article, however, is the recognition that when athletes turn to state legislation for help, the harm to them has already occurred.

For these reasons, the NCAA should reconsider its clarifications by permitting schools to participate in the NIL process. Otherwise, the NCAA should step up and fill a regulatory role for the protection of college athletes. Specifically, if schools must be removed from the NIL process, then the NCAA needs step into that process by developing a regulatory body for certifying player agents and restricting agent fee rates.

It’s doubtful that the NCAA will take that direction and implement an expensive and complicated system for regulating player agents in college sports. Accordingly, without any oversight from the NCAA or its membership, college athletes are left vulnerable in the NIL process.