By John F. Nagle & Matthew C. Welnicki

Over the past several years, the landscape of college athletics has changed dramatically, and it has created significant confusion and uncertainty for institutions, coaches, student-athletes, and their families. We have been keeping a close eye on these developments, and are ready and well-informed to help with navigating this challenging environment.

The recent House v. NCAA settlement, along with an executive order from the Trump Administration, have added several new wrinkles to the already confusing Name, Image and Likeness (NIL) system. Those changes provide a good opportunity to provide an overview of sources of athlete “compensation” that schools can use as a recruiting tool. Not every school will be impacted by the settlement and not every impacted school will address the issues the same way. It is important that athletes remain vigilant and look for help in navigating these complex issues.

The first type of “compensation” an athlete can receive is a scholarship. There are NCAA rules regarding the amounts that can be offered, the total number of scholarships awarded, and how funds can be used. This is the traditional recruitment tool, and most schools and athletes are familiar with how scholarships work.

The second type of “compensation” will be payments from schools to athletes from a percentage of revenue. This “salary cap” will allow individual schools to pay approximately $20 million to athletes this year. Each school will make decisions about what athletes and programs receive these funds; but payments to a particular athlete do not have to come from revenue generated from that athlete’s sport. The cap will increase as time goes on and the so-called Power Four Conferences (ACC, Big 10, Big 12, SEC) will likely have more funds to allocate. It is unclear how things like Title IX will impact the allocation and many questions will need to be answered. The Power Four Conferences will regulate and enforce direct player compensation issues through the College Sports Commission (CSC).

The third type of “compensation” will be the NIL agreements with third parties. With the settlement, the CSC and Deloitte will have roles in monitoring, and potentially enforcing, aspects of these agreements. These entities will look for instances where NIL agreements are used to circumvent the caps, including where a NIL agreement does not represent “fair market value” or the funding comes from “Associated Entities or Individuals” (for example, alumni or other individuals with connections and rooting interests in the schools, aka “boosters”.

In this context, it is important to understand the basics of NIL agreements. NIL stands for “name, image, and likeness.” This means that an athlete is licensing the use of his or her name, image, and likeness in exchange for money. The licensee (buyer) is not the school and cannot be the school. The licensee can be a business that wants to use the athlete in advertising, including social media promotion. The licensees have also included “collectives” loosely, or not so loosely, affiliated with a school or particular sport’s program. The consideration received by the licensee is the right to use the athlete’s name, image, and likeness either generally or for a specific use. This is where there needs to be clarity in a good NIL agreement. Some athletes are well known for their athletic accomplishments as well as being a social influencer in other ways. Some athletes might want to promote only specific products or have their names and images used through particular platforms. Some athletes are willing to actively market themselves and the licensee; others would prefer to remain passive and let the licensee do the work. Some athletes come into the arrangement with a robust social media presence; others have never started any type of account before.

Then there are things that can impact the NIL relationship after the agreement is signed. Transferring from one school to another can trigger an end to payments pursuant to a NIL agreement (although payments should not be tied to performance). “Moral turpitude” clauses can provide for consequences from public scandals or ill-considered social media posts. Terms regarding these types of things will need to be considered on a case-by-case basis. A NIL agreement between a small school athlete and a local shop might be viewed differently than a high-profile football player with a national deal.

Beginning July 1, 2025, any third-party deal over $600 must be approved by a clearinghouse called NIL Go, which requires that the agreement be for a “valid business purpose,” and within a fair-market “range of compensation.”  After initial guidance from the CSC in summer 2025 suggested that agreements with booster-driven collectives founded to provide money to student-athletes were likely to be found non-compliant, later statements suggested that restrictions on deals with collectives will not be any greater than with any other entity.

To add even more confusion, a recent Executive Order from the White House titled “Saving College Sports” has a section aimed at NIL which states, in relevant part, that “third party, pay-for-play payments to collegiate athletes are improper and should not be permitted by universities.” Although the Executive Order notes that it does not apply to fair market value compensation, such as a brand endorsement, it does direct the Secretary of Education and other Executive branch offices to develop plans for advancing that policy, suggesting that universities may face restrictions on federal funding if they are found to be out of compliance.

With all the uncertainty, athletes will need to weigh carefully the pros and cons of the length of NIL deals. Longer deals can provide certainty, but can later prove restrictive. Athletes should remember that they have been attracted to a school for certain reasons, but recruitment itself is a sales pitch with no real guarantees about their later experience.

Below are some basic tips for athletes considering NIL agreements:

  • Put the NIL deal in context with all of the other recruiting information. This includes scholarship (or revenue share) money. Don’t forget about academics and student life. If turning pro is a realistic consideration, exposure and future salary can be more important than short-term college deals.
  • Seek professional advice. NIL agreements are legally binding contracts that should almost always be reviewed by an attorney. Depending on the amounts at stake, review by an accountant might be appropriate.
  • Break out the specific terms of the agreement (preferably with an attorney) and make sure you understand each one as it stands alone and as it fits into the entire agreement. It is very important that you understand everything you will need to do under the agreement and any rights that you are giving up. Write out in simple terms (preferably with an attorney) everything that you have to do. Use this as a cheat sheet, but refer back to the actual agreement for any questions.
  • Make sure you are getting, and giving, “fair market value.” Think about how many hours you might put in and how much influence you might have. Talk with others about this. This could be subject to review under the new rules.
  • NIL agreements with collectives or other school-related entities are seemingly still permitted, but must be for a “valid business purpose,” which means that they must require you to do something more than simply participate in the sport. Examples might include selling merchandise, signing autographs, or making appearances at events.
  • Protect your “asset” at all times. Pause before posting. Act professionally and respectfully in public at all times. Things that you might not believe are controversial can create conflicts. Others might not agree with your idea of a joke. Beware of infringing on copyrights and trademarks.
  • Add value in positive ways. Post your successes and be a role model. Young players look up to established athletes. Posts that offer free tips for kids can gain views and help build your reputation.
  • Protect your athletic eligibility. Understand the NCAA rules and any rules specific to your school and sport.

Most student-athletes are not playing in a bowl game or planning on a being a draft pick. The typical athlete might want to set the following priorities: scholarship, revenue share payment (likely small), and then an NIL agreement. As for the NIL deal, they probably would want to test the waters with modest terms.

The NIL window should not be closed to athletes in limited-revenue sports. Ask the school about opportunities and talk to current athletes.

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This alert is for informational purposes only and may be considered advertising. It does not constitute the rendering of legal, tax, or professional advice or services.  You should seek specific detailed legal advice prior to taking any definitive actions.