It is only Wednesday and this week is shaping up to be an eventful one for college sports news. College sports is still rather impatiently waiting to see if Judge Wilken will approve the House settlement. Although approval has not been granted, details continue to emerge regarding how the industry is preparing for the implementation of the settlement. The Power 4 Conferences are establishing a College Sports Commission, Deloitte plans to run “NIL Go”, a platform that will be used to assess NIL deals, the NCAA plans to step away from amateurism enforcement, and the Power Conferences are asking their member schools to give up their right to sue.
All of these steps have been taken in preparation for a settlement that has yet to receive approval. There is a chance that the settlement will not be approved do due the issue with roster limits. Even though the settlement has not been approved, details of a completely revised college sports governance system is here nevertheless. Let’s discuss it!
NIL Deal Disclosure Requirement and NIL Go
If the settlement is approved, college athletes will be required to disclose any NIL deal(s) that in aggregate have a value of $600.00 or more. The athletes will be required to report these deals to the appointed individual at their university. Those deals will then be evaluated to determine whether the deal was based on “fair market value” or is just a pay-for-play deal disguised as NIL. To make this determination, the Power 4 Conferences has enlisted the help of Deloitte. Deloitte will use the newly established NIL deal clearinghouse, “NIL Go” to assess the “fair-market value” of NIL deals. NIL Go will use an algorithm to establish a compensation range for a variety of NIL deals.
To assess fair-market value, NIL Go will use a 12-point analysis comparing the deal with similarly situated deals. It will assess social media presence, assess local and institutional market size, and assess brand influence. Although deals are not supposed to be based on pay-for-play the software will assess on field performance and roster value when determining fair-market value. NIL Go cannot block deals; it can only flag the deals that according to the software may be pay-for-play. If the deal is flagged, the athlete will have the following options: cancel the deal, renegotiate for less money and resubmit the revised deal to the clearinghouse, request a “neutral arbitration”, or move forward with deal with the possibility of risking their eligibility. Deloitte is not providing this service to the universities for free. It was reported that Deloitte will be charging universities $5,000 to $500,000 per school.
The Establishment of the College Sports Commission
During an event hosted by the Knight Commission, NCAA President Charlie Baker dropped a bombshell. Baker stated that if the House Settlement is approved, the NCAA will relinquish its power to enforce its highly coveted concept of amateurism. If the settlement is approved, the rules governing the proposed revenue sharing cap and the assessment of NIL deals for fair market value will be controlled by the power conferences. This means that the power conferences will essentially be in charge of enforcing the House Settlement provisions. However, the NCAA will govern issues such as academic eligibility, in game rules, and sports betting. The NCAA will also continue to run college sports championships and payout a significant amount of House Settlement damages.
As the Power 4 Conferences prepare for this new college sports world order that will only come to be if the House Settlement is approved, the conferences have created a new entity called the College Sports Commission (CSC). The aim of the College Sports Commission will be to assist with implementing and enforcing the results of the House Settlement. The College Sports Commission will work to ensure that all Division I schools abide by the revenue sharing cap and other results of the House Settlement. The CSC will also create enforcement parameters for those who violate the rules. The College Sports Commission will also own NIL Go. The College Sports Commission will have a CEO and a board. The CEO will report to the Board. The CEO has not been announced yet.
Contract to Bind Schools to the Decisions of the College Sports Commission
To assist with the enforcement of College Sports Commission decisions, the Power 4 Conferences are drafting contracts for their members that will require them to give up their ability to sue the CSC. According to reports, the contract that is being referred as an “Affiliation Agreement” or a “Membership Agreement” would bind schools to the enforcement policies of the CSC and would exempt the CSC from lawsuits over enforcement decisions. However, the schools would be allowed to pursue arbitration. The document is expected to be signed by all power conference schools as well as other schools who opt into the settlement. If a school refuses to sign the agreement, the school risk losing their conference membership and the ability to compete against other member programs.
The contract also bars schools from using their state laws to violate CSC enforcement policies. Many state laws allow colleges and universities to do things that are not permissible under the House Settlement and thus would likely not be permissible according to the CSC. The power conferences are attempting to use this agreement to ensure that colleges and universities follow their rules and do not default to state laws as a way to get around the rules. The news of this contract being presented to power conference members is just further evidence of the fact that the House Settlement if approved presents more questions than answers.
College and high school athletes have been granted the right to profit from their name, image, and likeness! Yayyyyyy!!! College and high school athletes can now enter NIL Deals. This is an exciting opportunity for college and high school athletes. However, there are certain topics that college and high school athletes and their parents need to know before entering any NIL Deal. Download by free NIL Contract Checklist for 5 contract terms to know! For more on college athletes' name, image, and likeness rights follow me on Twitter @esquire_coach and on Instagram and TikTok @the_esquirecoach. To receive updates from The Esquire Coach Blog directly to your email please subscribe below.