July 1 ushered in a new NIL era in collegiate sports - is Michigan State ready?

Michigan State University (MSU) stands at a pivotal crossroads as it faces a seismic shift in the landscape of college athletics – a transformation driven by evolving Name, Image, and Likeness (NIL) rights, a landmark revenue-sharing settlement, and the potential redefinition of athlete status under labor law.

As MSU adapts to this new reality, understanding the nuances of fair-market NIL value, revenue sharing, and regulatory compliance is essential. These factors will shape the university’s ability to recruit, retain, and support top athletes while protecting institutional integrity and financial sustainability.

Understanding Fair-Market NIL Value

At the heart of today’s NIL conversation lies the concept of “fair-market value.” Simply put, this means that – under the new rules – the compensation student-athletes receive for endorsements, appearances, and promotional activities must reflect what those services would reasonably command in a competitive, open marketplace.

Why does this matter? Because artificially inflated NIL deals threaten to undermine the integrity of compensation frameworks and invite regulatory scrutiny. For Michigan State and peer institutions, ensuring NIL contracts are tied to genuine promotional value is a cornerstone of legal compliance.

For example, a star MSU football player with a sizable social media following partnering with a local business for a genuine campaign justifies significant compensation. In contrast, a marginal NIL deal paying a backup player a disproportionate sum for minimal work risks being flagged as a disguised institutional benefit, which could count against revenue-sharing caps and invite penalties.

This emphasis on fairness aligns with the recent federal House v. NCAA settlement, which includes measures to regulate compensation and ensure transparency.

Not everyone in the industry thinks that the House settlement will stand up to future legal challenges. More on that later.

The House v. NCAA Settlement: Redefining Compensation

The House settlement represents the most significant legal settlement in college sports history. The agreement addresses longstanding antitrust allegations that past NCAA rules limiting athlete compensation violated federal law.

You’ve likely heard about the key elements of the settlement:

• A $2.8 billion payout to former athletes over ten years.
• The establishment of a revenue-sharing mechanism, allowing schools to pay current athletes up to roughly $20.5 million annually (adjusted over time).
• The creation of a clearinghouse to oversee NIL deals exceeding $600, applying a “fair-market value” test to reduce inflated contracts.
• Flexibility for schools to allocate a portion of revenue-sharing funds toward additional scholarships under strict roster and funding caps.

While participation in revenue sharing is optional, it is widely expected that Michigan State and other Power Four programs will opt in to remain competitive in recruiting.

Michigan State’s Revenue Sharing Strategy

Though MSU has not publicly detailed its revenue-sharing blueprint, insights can be gleaned from national trends, peer programs’ announcements, and information gleaned from sources in and around the program.

Michigan State’s approach is likely a straightforward revenue-share model, divvying up its $20.5 million as follows:

• Prioritizing football with roughly 70-75% of the revenue-sharing budget ($15 million), reflecting its outsized media and ticket revenue contributions.
• Allocating approximately 20% to men’s basketball ($4 million), consistent with the sport’s significant revenue role.
• Distributing the remaining funds among women’s basketball ($850k), hockey ($550k), and perhaps some to volleyball and other non-revenue sports.

MSU’s athletic department will probably avoid complicated models like supplementing revenue sharing with large numbers of additional scholarships in year one, focusing instead on direct payments to athletes while carefully monitoring legal and financial implications.

Balancing NIL and Revenue Sharing: The Role of Third Parties

One critical nuance in the new system is the distinction between:

• Revenue-sharing payments: Direct school-funded compensation subject to the $20.5 million cap.
• Third-party NIL deals: Payments from independent businesses, collectives, or donors that do not count against this cap.

The newly formed “College Sports Commission” was created to enforce the revenue sharing cap and is empowered to review NIL deals for “fairness” – they use their software “NIL Go” (managed by Deloitte) to review all $600+ NIL deals self-reported by student-athletes.

This framework creates a strategic imperative for MSU: to encourage athletes to maximize NIL opportunities from outside sources while managing institutional payouts prudently.

Independent collectives – non-university-affiliated entities often funded by alumni and boosters – play a vital role in sourcing legitimate NIL deals for Spartan athletes.

Currently, MSU’s largest independent collective that fills this role is This is Sparta!, a collective run by Charitable Gift America (CGA). CGA acts as an important partner in this new ecosystem, facilitating connections – mostly in tennis, baseball, and golf – while maintaining a compliant distance from official athletic department involvement.

Spartan Nation NIL, a collective created by MSU megadonor Greg Williams, was officially endorsed by Michigan State Athletics last year and used to compensate athletes after the implosion of the original athletic department-affiliated collective, SD4L. Effective July 1, 2025, all indications point to Spartan Nation NIL remaining an MSU-affiliated collective, whose donations/expenditures will count towards the $20.5 million revenue sharing now in effect.

Strong collectives do more than raise money; they ensure athlete education on contract fulfillment, brand building, and legal compliance – helping athletes protect eligibility and maximize earnings.

Too Long Didn’t Read Version: Compensation that comes from the university counts against the cap, whether those funds are derived from media rights, concessions, parking, in-stadium advertising, ticket sales, or donations to MSU-affiliated collectives. Compensation that comes from outside the athletic department, including collectives outside of the athletic department’s control, do not count against the cap.

Compliance and Transparency: Protecting Athletes and the Institution

With increasing complexity in athlete compensation, Michigan State’s compliance infrastructure must be robust. This includes:

• Careful documentation of NIL deals: contracts, deliverables, social media metrics, and payment records.
• Clear separation between institutional payments and third-party NIL income.
• Ongoing education for athletes on tax obligations, financial literacy, and branding.
• Coordination with external legal counsel to anticipate and respond to labor law developments, including the possibility of athletes gaining employee status with unionization rights.

Transparency is paramount. The NCAA clearinghouse, which reviews NIL deals for fair-market value, will increasingly scrutinize contracts. Inflated or sham deals risk rejection, potentially triggering investigations or sanctions.

Michigan State must remain vigilant to avoid jeopardizing athlete eligibility or institutional funding.

Recruiting in the NIL and Revenue-Sharing Era

Today’s recruits consider NIL opportunities and revenue sharing as key factors – sometimes as important as coaching, facilities, or academics.

Student-athletes ask:

• Can Michigan State provide competitive NIL deals?
• Will the university help them build and protect their personal brand?
• Are revenue-sharing payments meaningful, fair, and reliable?

To answer affirmatively, MSU must not only provide financial support but also invest in media training, social media strategy, and brand development – turning NIL into a long-term career asset, not just a college paycheck.

Programs that excel in this space gain a recruiting edge, especially when competing with other Power Four schools with deep pockets and sophisticated NIL infrastructures.

The Future of Scholarships and Revenue Sharing

The House settlement allows schools to designate up to $2.5 million annually (from within the $20.5 million revenue-sharing pot) toward additional scholarships, expanding roster sizes within set limits.

While sources indicate that MSU is likely to start with a simple revenue-sharing payment system, future iterations could integrate scholarship expansion to better support Olympic and non-revenue sports, which often face funding challenges.

Such strategic flexibility will be crucial for MSU to maintain Title IX compliance and preserve a broad athletic offering while navigating evolving NIL regulations.

The NIL Clearinghouse: Addressing Market Inflation

A central concern driving the clearinghouse’s creation is the artificial inflation of NIL deals.

Estimates suggest that between 75-85% of NIL compensation at the highest levels may be inflated beyond an athlete’s true market value – driven by boosters and collectives competing to “outbid” rivals.

By applying a fair-market value test, Deloitte and the clearinghouse aim to temper this arms race, fostering a more sustainable market.

If successful, the clearinghouse could ease financial pressure on athletic departments, enabling a better balance between revenue sharing and third-party NIL income.

However, legal challenges to the NCAA’s authority to impose market valuations may delay or alter the clearinghouse’s role.

The House v. NCAA settlement still faces multiple legal challenges. Key concerns include Title IX, with female athletes arguing the distribution of $2.8 billion in damages disproportionately favors men’s sports, violating gender equity laws. Additionally, the settlement may conflict with state NIL laws, particularly those barring restrictions on athlete compensation. A Michigan lawmaker recently introduced a bill that would give even more NIL freedom to collegiate athletes in Michigan by curtailing universities abilities to cap their earnings. 

Though the deal resolves certain antitrust claims, critics argue the $20.5 million cap on NIL earnings could suppress athletes’ market value. It also leaves unresolved questions around employment status and potential collective bargaining rights under the Fair Labor Standards Act. The agreement doesn’t preclude future litigation on these issues.

Overall, while the settlement marks a major shift, it opens the door to continued legal battles over athlete pay, gender equity, and athlete classification.

Managing Financial Realities

The combined impact of revenue sharing and NIL creates substantial new costs.

Athletic departments like MSU’s face pressure to cover tens of millions annually in payments while continuing to invest in facilities, scholarships, and staff. The $20.5 million in revenue sharing (whether paid directly from the athletic department or funneled through a department-affiliated collective) is a new expense in the athletic department budget.

Many schools nationwide have begun trimming administrative overhead or postponing capital projects to adjust budgets.

Last October, Alan Haller, MSU’s former athletic director, mentioned that the MSU athletic department was preparing for major budget changes starting in 2025-26. He mentioned that the settlement allows departments to share $22–23 million annually with student-athletes, while the NCAA will pay $3 billion in back damages to athletes from 2016–21. To help fund this, MSU’s NCAA revenue will be reduced by $1.5 million annually for the next 10 years.

Overall, Haller said that, factoring in revenue sharing, reduced NCAA funds, and increased scholarships, MSU expected $25–30 million in additional expenses in 2025-26.

Obviously, the coming years will test MSU’s ability to:

• Balance competitive compensation with fiscal responsibility
• Innovate in fundraising, sponsorships, and media monetization
• Maintain a broad and compliant sports offering without cuts

Adaptation and Evolution: A Moving Target

NIL and revenue sharing are still evolving rapidly. To be successful, Michigan State’s leadership must remain agile by monitoring legal trends, competitor approaches, and regulatory changes. MSU President Kevin Guskiewicz decided that a change in leadership was needed to move Michigan State out of the perceived doldrums and into the upper echelon of athletic departments across the country.

Out: Alan Haller

In: J Batt

Guskiewicz believes that Batt arrives with a strong background in fundraising and program development, bringing experience from previous roles that equip him to lead MSU through the rapidly evolving NIL landscape and the House settlement.

At his introductory press conference, Batt emphasized that the future of college athletics will require ongoing adaptation and significant resources. He stressed the critical importance of alignment across all university stakeholders.

“This era will continue to be dynamic, require additional resources and provide new challenges daily,” he said. “The key to that success is alignment, and under President Guskiewicz’s leadership and support of the board and the entire Spartan family, we are well positioned not to survive that change, but to take advantage of it.”

Central to Batt’s vision is a recognition of the essential role that football plays in the success of collegiate athletic departments nationwide.

“It’s imperative we support all our sports, but do not be confused – every athletics department competing at the highest level must be successful in football,” he said.

Batt has also articulated a broad commitment to providing “championship-level resources” to all MSU programs, acknowledging the balancing act between investing in marquee sports and maintaining competitive offerings across the board. He sees strategic fundraising as a vital tool in meeting these goals. Drawing on his prior success at Georgia Tech – where he led significant fundraising campaigns – Batt has indicated that he has already begun engaging with donors and boosters to expand financial support for Michigan State’s athletics programs.

While Batt has expressed optimism about the opportunities this settlement presents, particularly the removal of strict scholarship limits, he has not publicly announced how he intends to move MSU forward, or even how the revenue sharing funds will be dispersed. It is clear that he believes that this change provides MSU with more flexibility to expand educational access and support for student-athletes beyond traditional constraints.

Schools are allowed to help find third-party NIL deals for student-athletes and can encourage businesses and supporters to be active in the NIL space. Other Power Four schools are employing athletic department employees to help drum up third-party NIL business for its student-athletes. All funds earned this way will not count towards the $20.5 million cap.

Will MSU take a similar route?

Unknown at this time.

Sources indicate that, while MSU will surely support their student-athletes in this new NIL era – they have won awards in the past for student-focused NIL educational programs – what that looks like on the ground is still to be determined/announced. Whatever plan Batt comes up with will be scrutinized at the level of a national top 10 athletic department, as that is the level at which Batt has indicated he believes Michigan State can operate.

The stakes are high.

Guskiewicz has invested a lot of money in Batt, paying off his contract at Georgia Tech to the tune of over $2 million. Over the next six years, MSU will pay Batt $12.6 million dollars in salary.

That’s a $15 million bet that Batt will be worth the investment – that Michigan State football will return to its winning ways, that Izzo’s basketball team will duplicate the success found last year, and that the recent successes in gymnastics, tennis, hockey, soccer, and women’s basketball will take hold and perhaps even expand.

Guskiewicz made a big move, replacing Haller with Batt, and will obviously expect big returns.

Less than a month in, Batt is refining the athletic department’s approach, looking to balance athlete needs, compliance, and financial realities, while still being competitive on the field/diamond/pitch/rink/mat and in the economic marketplace.

MSU’s ability to lead and adapt in this complex environment will define its place in the next generation of college athletics.