Overview
The ubiquity of name, image and likeness (NIL) deals being offered to incoming and enrolled college student-athletes by schools and third-party NIL collectives in the wake of the House settlement – a landmark $2.8 billion legal agreement allowing Division I schools to pay athletes directly and ending longstanding NCAA restrictions on student-athlete compensation – has given rise to significant debate over the question of whether college student-athletes should be considered employees of the school for which they play. Regardless of how courts ultimately answer that question, colleges, athletes, and third-party NIL collectives will, in the absence of legislative action, face many of the same litigation and enforcement risks that exist in the context of employer-employee relationships. Most notably, universities will have to consider: (1) litigation risks that arise when an athlete transfers to a competing school in breach of his/her NIL contract, often with the involvement of the transferee school or other third parties; (2) enforcement risks arising from federal and state-law prohibitions on contractual provisions in NIL agreements that restrict the ability of the 'employee' (here, the student-athlete) to transfer to another college; and (3) enforcement risks arising from agreements or implicit understandings, between or among universities (most likely through their athletic departments) to refrain from recruiting student-athletes away from each other’s programs. These new risks are ones that universities and their athletic departments and third-party collectives are well-advised to address early from a compliance standpoint.
This white paper is organized in three parts. Section I summarizes the NCAA rules (Rules) governing the recruitment of student-athletes and their transfers from one school to another; how those Rules have changed in the wake of the House settlement; and the types of restrictions being placed on student-athletes' ability to transfer via NIL contracts. Section II addresses the litigation and enforcement risks posed by these restrictions. Finally, Section III offers recommendations to institutions of higher education (IHEs), third-party collectives, and student-athletes for minimizing these risks.
Please click here to read "The Rewritten Playbook: The New Litigation and Enforcement Risks in College Sports."
