Film Room: House approved; College Sports Commission goes live

On Friday, June 6, Judge Wilken approved the House settlement, officially ushering in a new era in college athletics. In a lengthy opinion, Judge Wilken methodically analyzed the many objections raised over the course of the past few months. While that detail may be relevant to any appellants, it’s less pertinent to member institutions that now have an approved framework within which to move forward.

With the settlement becoming official just weeks before institutions may make payments to student-athletes, much needs to occur on campus to ensure processes are up and running. In addition to important institutional payment considerations, third-party NIL and related processes now take center stage.

College Sports Commission is live

The College Sports Commission (CSC), the defendant conference-led (non-NCAA) third-party NIL enforcement mechanism, is now live. 

The website generally tracks information that was included in the Ross Dellenger report noted in an earlier edition of Film Room. The most relevant information posted, now official, includes the following: 

• “The College Sports Commission will utilize NIL Go, an online portal built with assistance from Deloitte, to determine whether third-party NIL deals are made with the purpose of using a student-athlete’s NIL for a valid business purpose and do not exceed a reasonable range of compensation.”
• What’s a valid business purpose? The website notes that “[d]eals must demonstrate a legitimate commercial rationale, including: [e]vidence of using the student-athlete’s NIL to promote a good or service being offered to the public for profit” and “[c]ompliance with industry-standard NIL practices.”
• How will Range of Compensation (RoC) be determined? The website notes: “RoC is anchored in valuation principles to determine if a student-athlete’s third-party NIL compensation is commensurate with compensation paid to similarly situated individuals with comparable NIL value. The RoC is a deal level calculation that is intended to capture a student-athlete’s unique NIL value based upon multiple factors, including but not limited to, the deal’s performance obligations, the student-athlete’s athletic performance and social media reach, the local market and the market reach of his or her institution and program. The RoC will also be informed by external benchmarks.” 

The website also notes that “[m]ore information about the official rules and policies related to student-athlete third-party NIL deals will be made available to the public pending discussions with House class counsel.”

As we await those important details, both immediate and big-picture considerations apply to institutions and other interested parties.

Immediate deadlines and requirements:

• Beginning on June 7 (this past Saturday), student-athletes must submit third-party NIL deals with a value of $600 or more to NIL Go.
• Student-athletes “must report new NIL deals within 5 business days of execution of the NIL contract.” 

Broader strategic considerations: 

• Given the subjectivity in determining a “valid business purpose” and questions regarding the applicability of the inputs for the RoC consideration for any particular deal, there are bound to be differences of opinion between the CSC and those participating in the system. How to get ahead of those disputes? Student-athletes, third parties and institutions alike can gather data that supports the legitimacy of a deal in preparation for having to defend it. 
• Be on the lookout for more information regarding this process, including the standard that the “neutral arbitration process” will apply when adjudicating a CSC decision to not approve a third-party NIL deal. Institutions tracking on this from the jump will be in the best position to marshal facts and case law in defense of unapproved deals.

Stay tuned for regular updates during a busy and impactful summer.