By David J. Kaufman, Grace M. Siefker, of Thompson Coburn LLP
Over the last decade student athletes have petitioned the courts to invalidate the NCAA’s rules prohibiting students from profiting from their NIL. In Alston v. NCAA (2021) student athletes were guaranteed the right to education-related compensation, drawing greater scrutiny to NCAA rules regarding compensation limits.
In House v. NCAA (2025) student athletes successfully challenged the validity of a set of NCAA rules which prohibited endorsement of any commercial product or service (Division I Bylaw 12.5.2.1), compensation in exchange for the commercial use of their NIL (Division I Bylaws 12.4.1, 12.4.1.1, 12.4.2.3), and benefitting financially from social media posts or viral videos depicting their athletic performances (Division I Bylaw 12.4.4). These NCAA rules also prohibited NCAA member conferences and schools from revenue sharing arrangements with student athletes for broadcasting, sponsorships, marketing, and other commercial activities that involve NIL usage.
A final NCAA settlement, approved in June, permits student athletes to receive compensation for the commercial use of their NIL and permits participating schools to share revenue with student athletes. Utilizing NIL Go, an online portal launched on June 11, 2025, the College Sports Commission (CSC) has registered over 28,342 student-athletes and 1,227 institutional users have registered and 6,090 deals have been executed, with values ranging up to $1.6M and a total value of over $35.42M.
However, any revenue sharing agreements are still subject to NCAA pay-for-play and booster restrictions and NCAA Division I student-athletes are required to report any third-party NIL deals with a total value of $600 or more for review. As the licensing of a student athlete’s name, image and likeness becomes increasingly lucrative and popular, these student athletes must carefully prepare for that negotiation and comply with the applicable rules and regulations, all while intensely considering what rights and obligations these contracts require and the future implications of any deal.
- HIRE KNOWLEDGEABLE PROFESSIONALS
After the decision in Alston v. NCAA (2021), the NCAA implemented its Interim Name Image and Likeness Policy. Student athletes were granted the right to engage in NIL activities but required to comply with state laws and institutional policy where applicable. They were also permitted to obtain professional advisors and service providers – like lawyers, agents, and financial advisors – in order to do so effectively.
Student athletes are often teenagers juggling school and personal lives even before becoming responsible for negotiating endorsement deals, personal brand management, or financial planning. Help from trusted, experienced professionals like attorneys, agents, and financial planners, who are knowledgeable in these kinds of transactions are invaluable to students and their families in finding and managing these deals, while assisting in making informed decisions.
Lawyers:
Over 30 states have enacted NIL laws, and more are pending, varying widely on athlete protections, disclosure requirements and compensation restrictions. In addition, many schools and conferences have their own rules governing student-athletes’ ability to monetize NIL rights. To navigate this emerging and complicated landscape of restrictions and protections – or lack thereof – in each state, conference and school, student athletes should consult with an experienced attorney.
Recently, the NCAA has been working with the U.S. Congress to develop and introduce the SCORE Act, which would standardize NIL protections nationwide, regulate agents representing student athletes and prevent universities from revoking scholarships due to injury or poor performance. While a national regulatory framework might create more uniformity, obtaining competent legal representation will ensure compliance, while assisting student athletes in the negotiation process.
Agents:
More traditionally agents have focused on negotiating player contracts with professional teams, but NIL agents focus more on endorsement deals and marketing strategies. To avoid the risk of exploitative contracts, mismanagement of funds, or damage to their personal brand student athletes should look for agents that have experience in both reviewing and negotiating contracts as well as a background in marketing or financial management. However, many agents are not qualified to review technical contracts unless they have the requisite legal education and training.
When selecting representation in an NIL negotiation, student athletes should also ensure the agent is properly licensed or registered. Traditionally, agents must be meet high ethical and professional standards and register with the athletic association in which their client plays. However, NIL agents currently operate under an emerging web of state laws, institutional policies and NCAA guidelines, with no uniform national licensing system. Some states have qualification requirements while others leave rulemaking up to the educational institutions. Athletes should confirm that any agent is licensed and/or registered in the applicable state and/or institution. Representationfrom an unregistered agent may affect the athlete’s eligibility for continued NCAA participation or entering international competitions.
Other Professionals:
A student-athlete’s residency may make tax filings more complex. Consulting competent tax professionals may be necessary to ensure compliance with all relevant tax laws and regulations. Financial planning expertise may ensure the student’s long term financial health.
- ENSURE CSC APPROVES THE DEAL
The College Sports Commission (CSC) requires student athletes to submit third-party NIL deals with a total value of $600 or more to ensure the deals (1) are made with the purpose of using a student athlete’s NIL for a valid business purpose and (2) do not exceed a reasonable range of compensation. (NCAA Bylaw 22.1.3) These requirements ensure compliance with the NCAA’s long-standing prohibition on pay-for-play schemes, with which schools or boosters incentivize student athletes to play for a specific institution by providing direct or indirect financial benefits. By evaluating the entity’s efforts to profit and whether compensation is comparable to what similarly preforming players are making, the CSC ensures these NIL contracts are not disguised pay to play arrangements.
Student athletes should ensure they, their agent, and any third party are registered with the NIL Go platform and confirm each party will promptly provide any necessary documentation during the evaluation process as requested. Student athletes should continue to avoid engaging in pay-for-play discussions completely as they are still prohibited by the NCAA.
- REVENUE SHARING
Licensing and NIL rights have not traditionally been part of the agreements providing for academic aid in exchange for athletic participation, but the House v. NCAA settlement specifically allows players to financially benefit from the university’s use of their name, image, and likeness. These new revenue sharing agreements provide the student athlete with direct compensation – in addition to any scholarships or educational benefits – as payment for the athlete’s contribution to the total revenue received by the school for licensing media rights, ticket sales, and sponsorships. These arrangements typically enable the school to sublicense the athlete’s NIL to third parties without a right to royalties or additional payments and often extend past an athlete’s enrollment at the school.
Schools can now distribute approximately $20.5 million (for 2025- 2026 academic year) or up to 22% of the average revenue among schools in the ACC, Big Ten, Big 12, Pac-12 and SEC. This revenue sharing cap will increase 4% the following two years and will be re-evaluated every three years over the next 10 years. The College Athlete Payment System (CAPS) was developed to help schools allocate funds, monitor payments and manage compliance. Student athletes bear less responsibility for compliance but should still be aware of these rules.
These revenue sharing agreements are intellectual property transactions, providing the school a license to use an athlete’sname, image, and likeness including nicknames, voice, signature, pictures, quotes, identifiable biographical information, and other identifiable features such as jersey number or social media handle. When negotiating these deals, it is extremely important for athletes to understand what they are relinquishing, recognize the related value of their personal brand and be prepared to provide evidence supporting their valuation. Athletes should also carefully negotiate exceptions to enable them to contract with third parties during or after their college athletic career.
- EMPLOYMENT:
Generally, under profit sharing or NIL agreements, the parties expressly agree that the student athlete is not an employee, even if they receive compensation. This ensures that the student athlete is not considered a professional and is therefore eligible to play in the NCAA. The Big Ten’s form NIL agreement includes a provision which explicitly states the student athlete is not an employee. In negotiating an arrangement, careful attention must be made to specific terms related to service provided, employment and compensation to avoid ineligibility. Student athletes should carefully read and understand the scope of this language.
For example, the Bewley brothers signed contracts with Overtime Elite (OTE) in 2021, providing “work, duties and services at the direction of the Company” in exchange for a salary. When the brothers enrolled at Chicago State University intending to play basketball, the NCAA denied them eligibility. The NCAA determined the brothers had competed in professional athletics for a professional team with pay-for-play compensation. When the brother’s sued, the U.S. District Court for the Northern District of Illinois contrasted the language with a similar contracts OTE had entered into with athletes in 2022, which provided the athletes with “financial aid for actual and necessary expenses, educational related expenses, and permission to engage in name, image, and likeness opportunities.” The Court ultimately agreed with the NCAA that each contract was an employment contract with a professional league.
However, an NIL agreement may reserve the right of the university or third party to increase or decrease a student athlete’s payments as a reflection of their performance, for example winning a Heisman trophy or a reduction in playing time. This flexibility, while tied to the athlete’s play, depends on the promotional value of the athlete’s NIL instead of directly to the performance of such athletic services.
Further guidance on student athlete’s status as nonemployees is expected and may change this landscape. On July 24, 2025 President Trump issued Executive Order 14322 titled “Saving College Sports” which called upon the National Labor Relations Board (NLRB) to define the legal status of student athletes more clearly and provide rules and guidelines as to their rights and duties under the law.
- CAREFULLY DELINEATE THE SPECIFIC NIL RIGHTS GRANTED
Usage Rights:
One of the most important elements of an NIL agreement is usage rights, or what NIL rights the student athlete is relinquishing in exchange for compensation. Standard collegiate NIL contracts typically grant usage rights of the athlete’s NIL in any and all media. This term is broad and can include anything from apparel and merchandise to social media content. Student athletes should consider if there are any forms of promotion or levels of exploitation that should be excluded from the list.
According to the NCAA and the U.S. Court of Appeals for the Sixth Circuit college players lack a publicity right in the broadcasts or rebroadcasts of their games, meaning the broadcast revenue attributable to televised college games is not a form of NIL for which the student athlete can be compensated. Marshall v. ESPN (2016) However, this rule is being challenged in several lawsuits. Some contracts may include language that if players do have a right of publicity and broadcast NIL or BNIL exists, it is granted to the university as part of the agreement. However, if a contract does not include such a provision, student athletes should be aware of any changes in the law which may entitle them to further compensation.
Post Termination:
Many NIL contracts include post termination language which allows the third party or university to use the student athlete’s name, image, and likeness for a period of time after the NIL contract has ended or forever. This language reduces one’s long-term earning potential. Savvy student athletes request an expiration or exhaustion period, after which the school or company can no longer use the athlete’s NIL.
- MAINTAIN MAXIMIZE FLEXIBILITY
Buyout / Transfer Clause:
Many NIL agreements provide that if the student athlete transfers to another university, the school simply no longer pays. In others, the student athlete or the new school must repay up to 50% of their NIL earnings depending on the remining term on the contract. Regardless of transfer plans, a student athlete should require no obligation to repay NIL earnings under certain circumstances. For example, if a head or position coach leaves or if the athlete develops inability to play for academic or physical reasons (or has reduced playing time), the athlete should preserve their transfer without the penalty or with a favorable buyout clause.
Exclusivity
Breaching an exclusivity clause is one of the most common reasons for litigation of an NIL agreement. While universities often desire broad exclusivity provisions which would prevent the student athlete from using or promoting any similar products or brands, student athletes should try to specifically narrow these restrictions. For example, instead of agreeing to endorse a specific energy drink, with exclusions in ALL other drink markets, an athlete could limit that exclusion ONLY to the energy drink market, while negotiating for soft drinks, even though competitive.
Student athletes should also negotiate around conflicting NIL agreements, where the university has an NIL partnership with one company and student athlete endorses its direct competitor. State laws and intuitional policies prohibit student athletes from entering conflicting NIL agreements, but athletes and third parties may contract around this kind of regulation by allowing the student athlete to promote the school’s sponsor for competitions or official team activities.
Some institutions may not have conflicting NIL agreements but still prohibit student athletes from using school logos in promoting third parties. Student athletes need to be cognizant of contract provisions that require them to wear a school uniform or otherwise display the school logo to avoid violating either agreement.
- WHAT WILL YOU DO. WHAT WILL YOU NOT DO.
The scope of each NIL agreement will vary greatly, some requiring attendance at live events or consistently modeling merchandise while others only require a few moments of social media content creation. However, virtually every NIL contract will include a morality clause.
The clause generally bars an athlete from doing or saying things that are detrimental to their own image or that of the school, conference or NCAA. If the student athlete violates the clause, the NIL agreement can be terminated. If possible, the student athlete should request additional guidance on specific prohibited acts that would qualify as a breach of the morality clause. Organizational or institutional policy may influence the scope of this clause. Student athletes may also consider insisting on a mutual morality clause allows the student athlete to terminate the NIL agreement if the third party or university’s reputation was significantly damaged.
- CONFIDENTIALITY MATTERS
Third parties often keep NIL agreements confidential as a source of competitive advantage and some schools like Wisconsin and Clemson have adopted the stance, claiming disclosure creates competitive harm to the university and its athletic program. Other universities have raised concerns regarding the privacy of student information. Although many universities are public institutions and required to make certain public disclosures, schools have consistently declined to disclose standard terms and rejected public records requests for even blank or redacted versions of these agreements. Legal protections against disclosure of sensitive or identifying information, specifically those heightened protections for students contained in the Family Educational Rights and Privacy Act (FERPA) and reinforced by state law, have made schools hesitant to disclose anything for fear of over disclosure and loss of federal funding.
Confidentiality is also a two-way street. While universities and third parties avoid sharing information about NIL agreements with student athletes, those athletes are often contractually required to keep those agreements private as well. A template Big Ten NIL agreement was disclosed anonymously and included a strict confidentiality provision extending 5 years after the end of the contract.
Lack of disclosure may hurt student athletes bargaining power long term by limiting the information available about player valuation or competitive terms. This prohibition may limit a student athlete’s ability to discuss terms of licensing agreements with third parties or professional teams even after their relationship with the university has ended.
- CONFIRM THAT ALL OF THE PARTIES HAVE SIGNED
To enforce an NIL agreement, the contract should be signed by all of the parties to the contract. It is smart to retain a copy of the agreement for reference if there is a question or dispute.
- BIG PICTURE: MARKETING PLANS IN COLLEGE AND BEYOND
While some student athletes endorse sportswear brands or energy drinks others focus on developing independent content or their own product lines. Regardless of a student athlete’s preferred method of brand development, student athletes and their agents should have a long-term marketing plan that aligns with the athlete’s long-term vision in sports and beyond. Even for student athletes who do not intend to continue playing their sport professionally, navigating NIL and personal branding can be valuable career skills.
