Weekly Column: NIL Enforcement, NCAA Governance, and College Sports

In this week’s column, California Sports Lawyer® CEO and Managing Attorney Jeremy M. Evans discusses why the current battle in college athletics is not athlete compensation, but the enforcement and governance systems that will ultimately determine the future of NIL.

The NCAA is not an entrepreneurial entity that can take more risk and move swiftly. Expecting the NCAA to act as something it is not is without reason and unrealistic.

You can read the full column below. (Past columns can be found, here).

Name, image, and likeness (“NIL”) is here stay. For better, worse, and best, NIL (pronounced “N” “I” “L”, not nil, the word for no goals in soccer), is not going away. Pandora’s box has been opened and it will be nearly impossible to take back the pay system.

What remains is the enforcement of NIL, college student-athletes, coaches, recruiters, athletic departments, and sponsors/brands/advertisers. The question around enforcement is the most important topic and question in college sports. Most have accepted the idea that NIL is a permanent system.

However, much like the point in history when free agency was gained by professional athletes for the first time, the essential idea became not free agency, but how free agency would be managed. What are the rules and responsibilities for each side? What are the policies? What are the consequences and remedies? Most importantly, who enforces the rules, laws, and policies?

In NIL’s current phase, there is much debate around not only the rules of business, but also who enforces violations of the rules. Recent disputes involving NIL deal valuations, transfer portal recruiting, and booster involvement demonstrate the difficulty. The challenge is often not determining whether a rule exists, but deciding who investigates, who decides, and what penalties apply. Without a settlement of the rules and enforcement, litigation will continue at an unsustainable rate. Litigation causes confusion and inconsistency before a court decision and sometimes a decision after as well.

In the past, this column addressed the need of a centralized entity and commissioner beyond the NCAA to handle NIL and money management as a business system. The NCAA was created as a nonprofit entity to enforce rules with an importance on education. To ask the NCAA to now become a central clearinghouse or enforcement entity on a much large scale is not only unwise, it is unfair to the NCAA, athletic institutions, athletes, coaches, and fans.

Remember, the NCAA was once tasked to enforce a no tolerance policy: no money or value going to athletes for any reason outside of scholarships and health benefits and no hiring of an agent. To go from that to essentially pay for play through both NIL and the House settlement (providing a share of school revenue with the athletes of a minimum of $20.5 million dollars and rising over the next decade) is the complete opposite mission. The NCAA is not an entrepreneurial entity that can take more risk and move swiftly. Expecting the NCAA to act as something it is not is without reason and unrealistic.

Relying on Congress although helpful, might not be the best decision. Much like taxes and federal regulation: once it gets introduced and implemented, it is more likely to be increased, and less likely decreased, and even less likely, removed all together. Federal legislation may provide clarity, but it could also create additional layers of regulation and unintended consequences. It may be self-regulation through the creation of policy, process, and enforcement. The College Sports Commission or some CSC+ entity, to follow Hollywood’s love for adding a plus (“+”) to an existing, but renewed streaming platform, needs to be given teeth and power to review and possibly enforce. It is possible that rules agreed to by the universities and conferences could be reviewed or investigated by the CSC and enforced by the NCAA that would also allow for dispute resolution and appeals.

Power in college sports requires money and resources. The CSC has issues with reviewing NIL deals because it does not have the resources (or arguably the enforcement power) to do the work completely and thoroughly. The challenge is that enforcement requires both authority and resources. Any successful system must be viewed as independent, transparent, and consistent by universities, athletes, conferences, and fans alike. The rules agreed to must address Title IX, the transfer portal, contracts, financial valuations and limitations, and employment law. Some of these rules decisions and enforcement will of course invite litigation, but it would be much better to fight for a cause unified as one as opposed to divided.

Every mature industry eventually develops compliance, enforcement, and dispute-resolution mechanisms. NIL is simply entering that stage. The debate is no longer whether athletes should be compensated. The debate is whether college sports can create a credible and durable system to govern that compensation. If it cannot, courts, legislators, and outside stakeholders will continue filling the void. The universities, NCAA, and athlete leadership would be wise to meet and host meetings and conferences to solve the issues facing its business immediately as opposed to relying on time to pass, litigation, or legislative efforts to solve its problems.

About Jeremy M. Evans:

Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clients in contractual, intellectual property, and dealmaking matters. An award-winning attorney and industry leader, Evans is based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.