Potential NCAA Settlement Could Affect Future NIL Deals

Elite student athletes have been able to score name, image and likeness deals since the NCAA changed its rules in 2021. 

Now, the potential of a multibillion-dollar settlement of three athlete-compensation antitrust cases against the NCAA and the Power Five conferences could have repercussions for those arrangements going forward. 

“While athletes would continue to have the ability to make NIL deals with entities other than their schools, the settlement would allow the NCAA to institute rules designed to give the association greater enforcement oversight of those arrangements,” according to USA Today. "As it now stands, athletes would have to report payments of more than $600 to a clearinghouse that would be established. And their deals would be subject to review, with the goal being the prevention of pay for play and deals that pay amounts above market value.”

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U.S. District Judge Claudia Wilken on Monday preliminarily approved a multibillion-dollar settlement to resolve litigations.

“The settlement also reimagines college sports as a pro sports system, with member schools being able to elect to join a pay-for-play model wherein colleges pay athletes, subject to an annual salary-cap-style limit, for media rights, ticket sales sponsorships and NIL,” according to Sportico. “The granting of preliminary approval is a significant advancement of the settlement, but should not be conflated with final approval, which is a separate and potentially much more contentious process.”

The class action lawsuit involves former athletes seeking backpay for the NCAA’s denial of their NIL rights. 

“However, backpay concerns have taken a backseat thanks to an incredibly novel and already once-rejected settlement proposal,” according to Sports Illustrated. “The focus has instead shifted to the settlement proposal’s ambitious request to establish a 22% revenue-sharing regime for athletes taken from institutional media rights — establishing a roughly $22,000,000 annual payroll for athletes at the nation's biggest athletic institutions.” 

College athletes and NIL represents a “new frontier” for marketers, according to Forbes

“Access to resources is becoming easier and student athletes are making more money than they know what to do with while partnering up with some of the most well-known brands out there,” according to Forbes. “The NIL marketplace will continue to grow as more companies find ways to penetrate the space with targeted marketing strategies and partnerships, allowing collegiate athletes to maximize their earning potential. There’s immense opportunity to increase brand awareness and loyalty among consumers and investors should take note of companies standing to benefit and those who could get left behind.”

Nissan is one company that embraced student athletes, even putting together a video series to help them to broker better deals for themselves. The three-part video series includes conversations about brand building for the long-term, making service and inspiration count both on and off the field, and putting the team first.

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