Overview
The legal architecture governing college sports' name, image, and likeness (NIL) economy continues to take shape. On August 4, a federal court issued a decision about who can be investigated under the enforcement system created by the House settlement and who gets to oversee those investigations.[1] Judge Claudia Wilken of the US District Court for the Northern District of California ruled that certain companies that work with colleges and athletes cannot automatically be exempted from scrutiny under the settlement's NIL rules. In doing so, the court declined to overturn a special master's earlier decision refusing to categorically exclude multimedia rights companies and third-party brand sponsors from the definition of "Associated Entities or Individuals" under the House settlement's injunctive relief framework. At the same time, however, the court opened the door to further scrutiny of how the College Sports Commission (CSC) investigates those entities and affirmed class counsel's right to obtain information necessary to monitor compliance with the settlement.
The ruling does not decide whether any particular company violated the NIL rules. Instead, it addresses who may fall within the CSC enforcement framework and how challenges to that framework will be handled going forward. Specifically, the court made clear that the enforcement process itself remains subject to judicial oversight under the terms of the House settlement.
While the court's order does not resolve questions about the scope of CSC authority, it underscores a larger point: the next phase of NIL litigation may be less about whether CSC enforcement power exists and more about how CSC exercises that power.
The Terms of CSC's Enforcement Scope Under the House Settlement
The House settlement created an enforcement system to review certain NIL arrangements and ensure they comply with the settlement's rules. The College Sports Commission (CSC) is responsible for administering that system.
The settlement also discusses "Associated Entities or Individuals," which it defines as follows:
a. An entity that is or was known (or should have been known) to the athletics department staff of a Member Institution, to exist, in significant part, for the purpose of (1) promoting or supporting a particular Member Institution's intercollegiate athletics program or student-athletes; and/or (2) creating or identifying NIL opportunities solely for a particular Member Institution's student-athletes;
b. An individual who is or was a member, employee, director, officer, owner, or agent of an entity described in …(a) above;
c. An individual who directly or indirectly (including contributions by an affiliated entity or family member) has contributed more than $50,000 over their lifetime to a particular Member Institution or to an entity described in …(a) above;
d. An individual or entity that (1) has been directed or requested by a Member Institution's athletics department staff to assist in the recruitment or retention of prospective or current student-athletes, or (2) otherwise has assisted in the recruitment or retention of prospective or current student-athletes; or,
e. Any entity owned, controlled, or operated by, or otherwise affiliated with, the individuals or entities described in …(a)-(d) above other than a publicly traded corporation.
In the In re NIL Litigation decision, the dispute centered on two types of organizations:
- Multimedia rights companies (MMRs): Companies that often manage a university's media, sponsorship, advertising, and related commercial rights.
- Third-party brand sponsors: Businesses that enter into endorsement, marketing, sponsorship, or similar commercial deals involving college athletes.
The Special Master's Challenged Decision
The issue of whether all MMRs and third-party brand sponsors qualify as "Associated Entities or Individuals" gained prominence after CSC's recent scrutiny of certain NIL arrangements involving a university and its multimedia rights partner. The plaintiffs argued that MMRs and third-party sponsors should generally be treated as independent businesses rather than as entities associated with a university and therefore should not be subject to CSC review solely because of those relationships.
On June 25, the special master rejected the plaintiffs' request for a blanket ruling declaring that all MMRs and third-party brand sponsors are not "Associated Entities or Individuals." The Special Master concluded that neither MMRs nor brand sponsors could be universally excluded because the definition depends on the specific facts, including the nature of a company's relationship with a particular institution and its involvement in NIL activities.
The plaintiffs then filed objections to that ruling and requested that Judge Wilken: (1) reverse the special master's order; (2) order the CCS to stop investigating and regulating third-party NIL agreements with MMRs and third-party brand sponsors "absent a specific basis to do so"; and (3) order defendants[2] to produce the documents and information concerning the CSC's investigations or, alternatively, remand to the special master.
Judge Wilken's Ruling
The court declined to reverse the special master's decision in any respect, effectively holding that there is no one-size-fits-all answer to whether an MMR or third-party sponsor qualifies as an associated entity under the settlement. Some third parties may fall within the definition and others may not, depending on their relationships, conduct, facts, and circumstances.
That finding is important because it rejects a bright-line rule that would have automatically excluded entire categories of companies from the settlement's enforcement framework. Instead, the court preserved a case-by-case analysis.
Notwithstanding the denial of the requested relief, the court did leave the door open for judicial review of this question in future cases by rejecting the defendants' argument that disputes regarding CSC investigations should be resolved in arbitration, rather holding that it has authority to hear challenges involving the interpretation and enforcement of the settlement itself.
The court did not decide whether any particular CSC investigative practice violates the settlement; because that issue had not first been presented to the Special Master, the court referred it back to the Special Master for further consideration.
The order also contains an important ruling on access to information. The court found that plaintiffs are entitled under the House settlement to request documents and information relating to CSC investigations when necessary to monitor and enforce compliance with the settlement's injunctive-relief provisions. Questions regarding the scope of those requests were likewise referred back to the special master.
Why the Decision Matters
Viewed narrowly, the ruling rejects any categorical line-drawing in construing whether a third-party falls within the definition of "Associated Entities or Individuals" and offers no guidance as to where the boundaries of that definition lie. Viewed more broadly, however, the ruling highlights a central challenge in the post-House era: determining if a purportedly independent NIL arrangement is truly independent.
The House settlement was designed to prevent third-party NIL deals from being used to circumvent compensation limits and recruiting restrictions on colleges that have opted into the settlement while still preserving legitimate third-party NIL opportunities. As Judge Wilken's refusal to adopt any categorical rule recognizes, drawing that line is often difficult.
MMRs illustrate the issue particularly well. Many MMRs maintain longstanding commercial relationships with universities, manage sponsorship assets, and help facilitate opportunities involving student-athletes. Because they may operate both as business partners of institutions and as participants in the NIL marketplace, their status under the House settlement is not always clear.
A narrow interpretation of "Associated Entities" could leave open opportunities to move compensation outside established regulatory controls. A broader interpretation could subject independent businesses to increased oversight and review. By declining to adopt a categorical rule, the court left those questions to be resolved through future fact-specific disputes.
The decision also signals two broader trends.
- First, regulators are likely to focus on the substance of NIL relationships rather than the labels attached to them. Organizations with significant institutional connections may face scrutiny even if they characterize transactions as independent commercial arrangements. As a result, universities, MMRs, sponsors, and other participants in the college sports ecosystem may wish to periodically review NIL-related practices, governance structures, and institutional relationships with counsel to assess potential regulatory risk.
- Second, the ruling suggests that the conduct of regulators will itself remain subject to judicial oversight. By allowing plaintiffs to challenge investigative practices and seek information about enforcement activities, the court indicated that the operation of the enforcement system may be reviewed alongside the transactions being investigated.
The practical consequence may be a dual layer of scrutiny: closer review of NIL transactions by regulators and closer review of those regulators' decisions by the courts.
For universities, conferences, MMRs, sponsors, and athletes, the immediate takeaway is that uncertainty persists. The order preserves the CSC's authority to investigate potential issues while also permitting continued challenges as to how that authority is exercised. It is another sign that the future of college sports governance will depend not only on the rules themselves, but also on how those rules are interpreted, enforced, and reviewed.
As the House settlement moves from theory to implementation, that distinction is likely to shape the next chapter of the NIL era.
As colleges, conferences, multimedia rights companies, sponsors, and other stakeholders navigate the evolving NIL landscape, proactive legal guidance is increasingly important. Steptoe's Sports Integrity Team closely monitors developments involving the House settlement, CSC enforcement activity, athlete compensation, and related litigation. We help clients assess NIL structures, evaluate institutional relationships, respond to regulatory inquiries and investigations, and develop compliance strategies that account for a rapidly changing legal environment. As courts, regulators, and industry participants continue to define the contours of NIL governance, Steptoe is positioned to help clients anticipate risk, adapt to new requirements, and pursue their business and athletic objectives with confidence.
[1] In re: College Athlete NIL Litigation, Case No. 4:20-cv-03919 CW ECF 1144 (N.D. Cal. Aug. 4, 2026) (In re NIL Litigation).
[2] Defendants include the NCAA and various college athletic conferences.
