College Sports Commission Revises NIL Guidelines for Athlete Compensation

The College Sports Commission has revised its guidance on Name, Image, and Likeness collectives, allowing booster-backed groups to directly compensate athletes if the transactions meet certain benchmarks, paving the way for a new era in college sports compensation.

The revised memo, sent to schools on Thursday, replaces a previous guidance that denied many collective transactions with athletes. The new rules require collectives to show documentation of their efforts to profit from deals, rather than just channeling money from boosters to athletes. To be permitted, deals must satisfy three benchmarks: delivering a good or service to the public, turning a profit beyond paying athletes, and falling within a Deloitte-created compensation range standard.

The change is expected to lead to ongoing negotiations over enforcement rules between the power leagues controlling the College Sports Commission and the House plaintiff attorneys. Some attorneys, including Tom Mars, representing the collectives, have expressed concerns and may still pursue legal action. However, the revised guidance aims to prevent teams from using collectives to circumvent the spending cap and maintain competitive balance in college sports.

The College Sports Commission's new guidance focuses on whether the sale of goods or services is for profit, rather than whether the entity itself is operating at a profit or loss. The requirements include documentation showing the entity's efforts to profit from the deal. This change comes after years of legal wrangling and a threat from plaintiff attorneys to take the case back to court.

The revised guidance is a significant development in the world of college sports, allowing athletes to sign deals with players as long as the athlete promotes a product or service that generates profit. While some critics argue that the new rules may still allow for loopholes, the College Sports Commission's efforts to maintain competitive balance and prevent teams from using collectives to circumvent the spending cap are a step in the right direction.