What role can institutions now play in NIL following NCAA's preliminary injunction in Tennessee?
If Friday afternoon marked the end of NCAA oversight of NIL, then it also produced more questions regarding the role institutions can play in compensating athletes and overseeing donor-led collectives.
With college sports’ governing body currently dealing with a preliminary injunction halting its ability to rule when athletes can negotiate NIL deals, universities have been left with a bundle of issues. That was only more evident Monday afternoon in a memo from Charlie Baker to NCAA membership. The former Massachusetts governor outlined the need for the NCAA to convene the Division I Board of Directors and the Board of Governors “to discuss next steps.”
“If we all do our part, get involved, do the work and play the hand, we can continue to make progress on the large, complicated problems we face,” said Baker, who is approaching his first anniversary with the NCAA. “We will be back to you on the ruling shortly.”
School leaders are trying to figure out what’s next
Even the top athletic departments in the country with elite NIL collectives and dozens of boosters ready to dive in are trying to figure out what comes next. Most aren’t even worrying about the possible threat of NCAA punishment, though.
Institutional staff members, which includes coaches, are still prohibited from making NIL offers and negotiating NIL deals. And everything is now public, opening the potential for liability.
“If we put that [NCAA] aside, it’s coming into the space of your general liability and your Title IX pieces,” said Andrew Donovan, the president of Altius Sports Partners. “Because, as I’ve described this before, the order was issued to administrators on campus, previously you had this circumstance in which a collective could go make an offer, an institution could impermissibly make an offer on behalf of the collective. The prospect could accept it.
“Certain parts of that aren’t being fulfilled, and the prospect might be pissed off once they become an athlete, and it’s not fulfilled. But generally, by and large, they’re not really saying it. What I find so interesting about this order is that now you take all of those circumstances, those fact patterns, and it’s done in the light of day. No longer is a prospect or their family necessarily concerned about my son or daughter’s eligibility. And now I can put you on blast because you didn’t follow through with what you said you promised.”
Formulating an NIL strategy won’t be easy
More than 40 universities – including Notre Dame, Georgia and LSU – rely on Altius for NIL consultation. This past weekend was a busy one, with athletic departments trying to gather information to create a strategy and operating procedure to use in this unprecedented world of college sports.
While the ruling is only preliminary, many are bracing for the attorneys general of Tennessee and Virginia to win the lawsuit. More states could join the case, too. Baker’s letter only signaled the NCAA needs time to formulate a path forward.
Universities will also have to consider state laws. North Carolina prohibits athletes from receiving NIL dollars as a direct inducement to attend a school, while Texas state law prohibits prospective college athletes from entering into NIL deals. Both could prove to be hurdles for major institutions in those states.
As one sitting Power 4 athletic director told On3, the latest saga surrounding the NCAA is proof of its “death by 1,000 cuts.” Baker’s memo is evidence of the governing body scrambling to understand what guidelines work. And with the recent formation of the SEC and Big Ten joint advisory group, the opportunity is there for “institutions to take charge.”
The test balloons are coming, too, with the high school football recruiting dead period ending March 4. College basketball’s transfer portal opens Monday, March 18, while college football’s 15-day spring window is slated to start Tuesday, April 16.
NIL collectives must be on same page with leaders
As one source in the multi-media rights space, who wishes to remain anonymous, told On3, gaining the trust of schools has never been more valuable for third-party entities. With the NCAA possibly shifting to an event management organization, a university’s intellectual property has never been more valuable. Collectives will have to be in lockstep with athletic departments.
For the institutions that want to be aggressive, a myriad of possibilities are on the table. Top college football programs could now include NIL collectives on recruiting visits. Additionally, athletic departments could work in consultation with donor-led groups to create a unified payroll.
All options are seemingly on the table, especially with institutions not overly worried about the possibility of punishment from the NCAA. The question of how athletic departments take advantage of the moment is on a case-by-case basis.
“I think if you’re doing it in a thoughtful way, you can do this without violating existing NCAA rules. And to that extent, I think this is a huge opportunity,” Donovan said.
“I can tell you that we have several schools amongst our partners that are hot to trot on this and are saying, ‘Alright, how do we do this? We need to do this. We need to take advantage of the moment.’ No different than when July 1 [2021] came around. Those who were prepared, they got out of the gates quickly and they got advantages. And I think you’re going to see the same type of thing happen here.”