Introduction
Name, image, and likeness (“NIL”) deals are booming among student-athletes at colleges across the country, as student-athletes are now able to generate income from their participation in college athletics on an unprecedented scale. The rapidly changing commercial and legal landscape in college sports, however, suggests a need for thoughtful and comprehensive reform, and likely the intervention of Congress and federal agencies. In this article, we will explore some considerations affecting various NIL stakeholders and propose a cross-compensation model for NIL-related athlete transfers that will help balance the interests of student athletes with those of colleges, coaches and donors.
Nonathlete NIL Stakeholders
Coaches
In addition to student-athletes, coaches are profoundly impacted by the current NIL deals, many of which are non-transparent, unverified, and potentially if not likely detrimental to both. The role of the college coach continues to shift, demanding not only strategic and recruiting acumen but also managerial, legal and financial skills.[2] To remain competitive, coaches have been forced to adapt their programs. Coaches must (1) connect student-athletes to brands and alumni to obtain competitive NIL deals; (2) include financial literacy training in their programs so that student-athletes can manage their earnings; (3) prioritize ensuring their team has a strong culture of fairness, transparency and communication to escape conflicts caused by NIL contracts; (4) build flexible rosters that take into consideration short-term tenures; and (5) use NIL opportunities strategically to retain top student-athletes.[3]
A first challenge for coaches is that some student-athletes may be more focused on short-term financial gain than practice.[4] Second, coaches are facing retention challenges, with yearly student-athlete turnover. The transfer portal creates a dynamic where student-athletes explicitly or implicitly may coerce their athletic programs into seeking more lucrative NIL deals (or they may transfer to another college).[5] Coaches must often re-recruit their own student-athletes after each season.[6] Last, coaches are facing decreased authority regarding team culture, academic advancement, etc., as student-athletes have new leverage in transferring elsewhere for better NIL deals.[7] In sum, juggling the evolving NIL landscape makes it increasingly difficult for coaches to maintain their multifaceted role while also fostering athlete development and team success.
Colleges
Colleges across the country are divided as to whether NIL is beneficial for college athletics — nearly half of athletic directors anonymously surveyed stated that they do not support student-athletes being compensated for commercial use of their NIL.[8] For high-performing student-athletes, NIL creates a strong incentive to consider transferring to a different college for a richer or longer-term NIL deal.[9] However, under the current system, colleges are not compensated by the colleges to which their student-athletes transfer, regardless of whether or not those student-athletes have an existing NIL deal.[10] This poses a significant problem for colleges that lose student-athletes to the transfer portal, as these colleges are unable to capture any reimbursement for the time, money, and effort their coaches invested in recruiting and developing their student-athletes.[11]
Donors
College donors are also divided as to the way that NIL incentivizes student-athletes to choose one athletic program over another and as to other impacts on their alma maters and teams. More traditionally, donors would rather donate to a college as a whole than donate to NIL initiatives, trusting the college’s overall budgeting and allocation process and/or donating on a restricted basis to specific sports programs. However, some ultra-wealthy college donors have single-handedly recruited top student-athletes to colleges of their choosing by donating to an NIL initiative.[12]
Donors can benefit by having the opportunity to become more involved (singularly involved in some cases) with athletic programs and to form relationships with exciting student-athletes.[13] Indeed, because NIL collectives are independent of colleges and coaches, some mega-donors may, unhelpfully, start to resemble and act more like professional team owners than passive supporters and fervent fans.[14]
Student-Athletes
The most important stakeholders in the NIL landscape are, of course, the student-athletes, who are poorly served by the current patchwork of NCAA, state, college, and conference rules and regulations affecting their daily lives and prospects.
As one example, student-athletes must understand the disclosure, financial and tax implications of NIL agreements.[15] While many colleges are beginning to offer student-athletes education and training regarding NIL, the NCAA currently limits the advice and legal and financial services that colleges can provide to student-athletes.[16] There are also financial and opportunity ramifications from the House v. NCAA settlement, whereby colleges who opt into the settlement may now provide scholarships to student-athletes but subject to new roster limits for each sport, which could mean as many as 13,000 roster spots lost (and any related NIL opportunities).[17]
Student-athletes interested in seeking out alternative athletic opportunities through the transfer portal may face conflicting priorities. For one, NIL deals may be the driving factor in a student-athlete’s decision to transfer. Because of this, student-athletes may neglect to focus on academics, athletics, their potential “fit” at the college, and more when choosing the college to which they will transfer.[18] Further, before a student-athlete even considers transferring, they may spend significant time seeking NIL deals, leaving less time to focus on academics and athletics, which could harm their future transfer potential and/or prospects.[19] Lastly, there may be negative mental health implications associated with the evolving NIL structure as student-athletes face increasing pressure from coaches, family and friends to secure NIL deals.[20]
The emergence of NIL, and the changing legal landscape, have created financial benefits for some student-athletes, but also problems and uncertainty for all stakeholders. Indeed, some have questioned the viability of college athletics as we have known it.[21] Accordingly, there is a need for policymakers, particularly the NCAA, Congress and federal agencies, to introduce and/or refine standards that address all stakeholders’ interests related to college athletics. One idea that policymakers should consider is implementing a transfer fee system like professional soccer’s Premier League.
A. Premier League Model
A Premier League model for managing the transfers of college student-athletes would introduce a transfer fee, paid by the college acquiring an athlete to the college that loses them. Professional soccer athletes often transfer between clubs throughout their careers. Under the regulations set by FIFA, the global governing body for the sport, professional soccer athletes are required to sign binding contracts with their respective clubs, which can last for up to five years.[22]
If another club wishes to acquire a professional soccer athlete before the expiration of their existing contract, it must negotiate and pay a transfer fee to the professional soccer athlete’s current club as compensation for terminating the agreement prematurely.[23] College athletics could adopt a similar model.
Today, coaches recruit and sign student-athletes, use significant resources to train and develop them. A transfer fee system could help “level the playing field” particularly for smaller and less wealthy programs by providing colleges/coaches with compensation to be used toward their athletic programs when they lose an athlete. The fee could be structured as a percentage of the NIL and overall revenue package the student-athlete secures from their new college. Importantly, this fee should not come out of the student-athlete’s contract itself, but rather operate as a separate payment, much like the transfer fee in global soccer, which is paid between clubs and kept separate from the professional soccer athlete’s negotiated compensation.
Smaller athletic departments often rely on the revenue generated by their top student-athletes through fan engagement, donor contributions, advertising and media deals. This transfer fee system could give smaller-budget colleges continued incentive to recruit aggressively and help them avoid becoming “farm team” operations for big-time programs. With a transfer fee in place, small colleges could recoup some value if a top athlete moves on, making the risk of losing talent more manageable. A potential challenge to implementing the transfer fee system is the fact that student-athletes are not classified as employees as they are in the Premier League. In the Premier League, the transfer fee is used to buy the right to contract with a professional soccer athlete before their contract expires.
Reclassifying Student-Athletes as Employees
If all Division I student-athletes were classified as employees, it would provide coaches, student-athletes and colleges with reliability, flexibility and enforceability in their athletic programs. It would allow colleges to create legally binding contracts that include term lengths, NIL rights and individualized student-athletes incentives, bringing greater uniformity, transparency and enforceability to college sports and particularly the NIL market.
In Johnson v. NCAA, the Third Circuit accepted the argument that at least some student-athletes may be classified as employees, entitling them to the gamut of employment protections that they currently lack. The court in Johnson created a four-part test to further define what qualifies as an employee. According to the test, an employee “(a) perform[s] services for another party, (b) ‘necessarily and primarily for the [other party’s] benefit,’ (c) under that party’s control or right of control, and (d) in return for ‘express’ or ‘implied’ compensation or ‘in-kind benefits.’”[24] Student-athletes should be reclassified as employees since they satisfy all prongs: (a) playing for the colleges, (b) doing so necessarily and primarily for the colleges’ benefit, (c) acting under the control of the colleges, and (d) in return for the express or implied compensation from NIL and scholarships. Two main reasons student-athletes are not currently treated as employees are (i) the nonprofit status of colleges, and (ii) Title IX implications.
Colleges fear that classifying student-athletes as employees could (i) jeopardize their 501(c)(3) nonprofit status, which provides critical financial benefits such as federal tax exemptions, eligibility for charitable donations, and access to public funding and grants, and (ii) result in new obligations including payroll taxes, workers’ compensation, health benefits and compliance with labor laws, burdens that colleges currently avoid under the amateurism model. This problem could be solved if Congress or the courts created narrowly tailored exemptions, such as limited antitrust or nonprofit status protections, specifically for college athletics. Further, Congress, the NCAA, or the newly created College Sports Commission could decide whether colleges should be required to, or are exempted from, paying student-athletes a minimum wage if they are to be considered employees. As a result, colleges could simultaneously avoid taking on these new obligations as well as the associated risk of losing their nonprofit status.
Additionally, to avoid entangling academic institutions directly in employment relationships, the employment structure could be shifted to a centralized body, similar to how Major League Soccer holds athlete contracts on behalf of teams.[25] In this way, collegiate athletic conferences, the NCAA, or a third-party entity (e.g., the College Sports Commission) would contract with student-athletes directly and hold such contracts on behalf of individual college teams. Then, if a student-athlete entered the transfer portal and another college wanted to add the student-athlete to their roster, the receiving college would purchase the rights to the student athlete’s employment contract, held by a third party, from the sending college.
Regarding Title IX issues, employment status could trigger equal pay requirements across men’s and women’s sports, potentially leading to widespread legal challenges and significant financial strain on colleges. In Johnson v. NCAA, the Third Circuit acknowledged that if student-athletes in high-revenue sports only, primarily football and men’s basketball, qualify as employees under the Fair Labor Standards Act, a gendered divide in compensation could emerge.
Both 501(c)(3) nonprofit status and Title IX problems could arguably be resolved by Congress or courts creating narrowly tailored exemptions such as limited antitrust or nonprofit status protections, specifically for college athletics, and by shifting the employment relationship for Division I student-athletes to a centralized body that holds student-athlete contracts on behalf of colleges.
Conclusion
The future of college athletics depends on a bold reform that balances the interests of all stakeholders. Implementing a transfer fee system would compensate colleges for lost athlete investments and bring better stability to the transfer portal. Reclassifying student-athletes as employees would allow for enforceable contracts, promote transparency in the NIL market, and provide legal protections that benefit all stakeholders, while add-ons such as centralized employment through conferences or limited nonprofit exemptions could address legal and financial concerns. Together, these proposals would help create a more transparent, equitable, and sustainable model of college sports that benefits student-athletes, colleges, donors and fans.
[1] Willow Clark, David Keller, Jennifer Mashaal, Samuel Nechi, William Wu are law students at Georgetown University, University of Virginia, McGill University, Columbia University, and Northwestern University, respectively.
[2] Don Philabaum, The Exodus of College Coaches: NIL, Transfer Portal, and a Changing Landscape, LinkedIn (Dec. 30, 2024), https://www.linkedin.com/pulse/exodus-college-coaches-nil-transfer-portal-changing-don-philabaum-suurc.
[3] Robert Muhler, How College Basketball Coaches are Adapting to the NIL Era, College Insider, https://www.collegeinsider.com/coach-column/how-college-basketball-coaches-are-adapting-to-the-nil-era (last visited July 15, 2025).
[4] Bruno Rukavina, Penny Hardaway breaks down how the biggest problem of the NIL deals is that it takes away the hunger to succeed from players, Basketball Network (Jan. 10, 2025), https://www.basketballnetwork.net/latest-news/penny-hardaway-breaks-down-how-the-biggest-problem-of-the-nil-deals-is-that-it-takes-away-the-hunger-to-succeed-from-players.
[5] Id.
[6] Id.
[7] CleanKonnect Education Team, Will NIL Ruin the Authority of Coaches? CleanKonnect (May 10, 2023), https://nilcertifications.cleankonnect.com/blog/will-nil-ruin-authority-coaches.
[8] What Do Athletic Directors Think About Name, Image and Likeness?, Athletic director u, https://athleticdirectoru.com/articles/what-do-athletic-directors-think-about-name-image-and-likeness/ (last visited July 15, 2025).
[9] Will Schiffler, Exploring the Impact of NIL on College Athletes in the Transfer Portal, The Minnesota Republic (Apr. 2, 2024), https://mnrepublic.com/10136/sports/exploring-the-impact-of-nil-on-college-athletes-in-the-transfer-portal/.
[10] Stewart Mandel, How is College Football Trying to Rein in “Wild West” of Transfers? Make Players Pay to Leave, The Athletic (Mar. 14, 2025), https://www.nytimes.com/athletic/6197275/2025/03/14/college-football-transfer-portal-nil-contract-buyout-clauses/.
[11] Eli Boettger, An Analysis Of College Football Return On Investment, Athletic director u, https://athleticdirectoru.com/articles/analysis-of-college-football-return-on-investment/ (last visited July 15, 2025).
[12] Michigan Flipped QB Bryce Underwood With Some Help From Oracle Founder Larry Ellison And Tom Brady, Fox Sports, https://www.foxsports.com/articles/cfb/michigan-flipped-qb-bryce-underwood-with-some-help-from-oracle-founder-larry-ellison-and-tom-brady (last visited July 17, 2025).
[13] Id.
[14] See Jason Penry, Insights from Top NIL Supporters at the Group of 5 Level, Athletic director u, https://athleticdirectoru.com/articles/insights-top-g5-nil-supporters/ (last visited July 15, 2025).
[15] See Student-Athletes Involved in Name Image Likeness (NIL) Agreements Should Be Aware of Their Tax Obligations, Taxpayer Advocate, https://www.taxpayeradvocate.irs.gov/news/nta-blog/nta-blog-student-athletes-involved-in-nil-agreements-should-be-aware-of-their-tax-obligations/2023/12/ (last visited July 18, 2025).
[16] See Ben Cahill, Understanding Tax Implications of NIL Income for NCAA Student Athletes, CLA (Jan. 1, 2025), https://www.claconnect.com/en/resources/articles/25/tax-implications-of-nil-income-for-college-athletes.
[17] See Kristi Dosh, New Roster Limits Set by House v. NCAA, Business of College Sports (June 8, 2025), https://businessofcollegesports.com/other/new-roster-limits-set-by-house-v-ncaa/.
[18] See supra note 12.
[19] See David Hitz, Embracing Change: The Forward Trajectory of NIL in College Sports, Athlete Narrative (May 14, 2024), https://athletenarrative.com/blog/embracing-change-the-forward-trajectory-of-nil-in-college-sports/.
[20] See William L. Hollabaugh, Name, Image, and Likeness and the Health of the Young Athlete: A Call to Action for Sports Medicine Providers and the Athletic Healthcare Network, National Library of Medicine (Nov. 20, 2023), https://pmc.ncbi.nlm.nih.gov/articles/PMC10916771/.
[21] See Ben Nuckols, NCAA head warns that 95% of student athletes face extinction if colleges actually have to pay them as employees, Fortune (Feb. 24, 2024), https://fortune.com/2024/02/24/ncaa-college-sports-employees-student-athletes-charlie-baker-interview/.
[22] See How does a football transfer work?, BBC (Aug. 28, 2017), https://www.bbc.com/worklife/article/20170829-how-does-a-football-transfer-work.
[23] Id.
[24] See Johnson v. National Collegiate Athletic Association, Harvard Law Review (Feb. 10, 2025), https://harvardlawreview.org/print/vol-138/johnson-v-national-collegiate-athletic-assn-108-f-4th-163-3d-cir-2024/.
[25] Mutonga Kamau, How Major League Soccer Handles Player Transfers and Contracts, Cleats, https://vocal.media/cleats/how-major-league-soccer-handles-player-transfers-and-contracts (last visited July 15, 2025).
