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The new NIL enforcement entity, the College Sports Commission, is marching forward with investigations into potential rules violations even though it’s unclear whether its enforcement decisions would survive legal challenges.
The CSC was created to enforce the new rules of the House v. NCAA settlement, most notably approving or denying name, image, and likeness deals. As part of the settlement, all Division I athletes are required to submit deals over $600 through NIL Go, software created by Deloitte, for manual review and approval by the CSC. The CSC wants to ensure deals are providing “fair-market value” for real NIL services, not pay-for-play in disguise.
For the CSC to have the power to enforce these rules, the commission and the power conferences have drafted a participant agreement that would bind schools to the rules of the settlement and the CSC’s enforcement power. The goal: to protect the CSC from a barrage of litigation that could render it powerless, as it happened with the NCAA.
But schools have not yet signed the participant agreements considered necessary to shield the CSC from legal challenges. All power conference schools must sign in order for the agreement to take effect, but an earlier Dec. 3 deadline passed without all signatories. Multiple state attorneys general have come out against the agreement, with Texas’s AG saying it’s “riddled with problems.” A source familiar with the discussion says conversations are ongoing about modifying the agreement to address schools’ and lawmakers’ concerns, though there is no concrete timeline.
Even without the signed agreements, the CSC is going forward with investigations.
Firing Up Investigations
As schools race to re-sign current players and find new ones in the transfer portal, the CSC said schools would be notified this week of potential investigations into violations regarding deals that have not been reported at all. Multiple NIL collective heads have previously told Front Office Sports that they have begun paying players before submitting NIL deals to be approved, citing the lack of speed or clarity around certain rules.
The CSC also said in a lengthy statement last week that it has concerns around some of the deals facilitated by schools’ multimedia-rights partners for athletes.
Schools have been using their deals with MMR partners to offer NIL opportunities above the revenue-sharing cap. How it works: MMR partners normally procure corporate sponsorship deals for schools; they are now doing this for athletes.
But the CSC said last week that it has come across some deals that may run afoul of its rules.
MMR partners can’t guarantee a player a certain amount of money, especially if they don’t specify what types of NIL deals the partners will procure, the CSC said. “Without prejudging any particular deal, the CSC has serious concerns about some of the deal terms being contemplated and the consequences of those deals for the parties involved,” the CSC said. “Making promises of third-party NIL money now and figuring out how to honor those promises later leaves student-athletes vulnerable to deals not being cleared, promises not being able to be kept, and eligibility being placed at risk.”
Shortly before the CSC sent out its letter, Learfield, an MMR partner that has hundreds of clients including schools such as Ohio State, sent out a communication to schools it works with outlining its strategy. The letter, which was first reported by Yahoo Sports and later obtained by FOS, explains that the company will not “warehouse” athletes’ rights—offer them a specific amount of money without specifying which types of deals they’ll have to complete—or guarantee any specific amount of money. Learfield will, however, offer estimates of how much money they might be able to procure for athletes in letters of intent, which would also include the types of deals they would complete.
“We have a very high degree of confidence that all of our activity meets the guidelines and the standards,” Learfield president and CEO Cole Gahagan told FOS.
Hundreds of Deals Rejected
Since the House settlement, the CSC has proceeded with rejecting hundreds of deals that it believes fall outside the bounds of the rules.
The CSC has already rejected 524 deals worth $14.94 million, according to a report released Monday. The commission cited a number of reasons for the rejections, including a “lack of a valid business purpose; no direct activation of NIL rights (i.e., warehousing); and compensation not at rates and terms commensurate with similarly situated individuals.”
The CSC also had 10 deals in its arbitration appeals process as of Dec. 31, though eight of those cases have been dropped as they were part of the same issue with one school.
Meanwhile, more than $100 million worth of deals have already been approved since the NIL Go platform opened last summer. NIL Go has approved 17,321 deals worth a total of $127.21 million since launching, with 5,146 deals with a total value of $39.71 million cleared since November.
