Third-party NIL deals for athletes worth up to $2,500 can now avoid some scrutiny
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The value of name, image and likeness deals that can avoid review by the College Sports Commission over whether they are appropriately priced has risen from $600 to $2,500, providing an athlete doesn’t make more than $15,000 total, according to guidance the commission issued Tuesday.
The CSC, formed to oversee NIL payments to athletes in college sports, sent out a four-page reminder to Division I schools, timed with the opening of the transfer portal in college basketball.
The memo said that the CSC board approved the increase last month. At first, any deal worth $600 or more had to be evaluated for whether the athletes were being paid a fair amount for what they were providing.
The raised amount is expected to allow the commission to act faster in approving deals and focus more on the big-money arrangements between players and third parties that need more scrutiny. The $15,000 total cap was added to ensure schools and athletes don’t enter multiple four-digit deals and avoid all scrutiny.
“The CSC will evaluate the effect of the new policy in the coming months to determine whether further adjustments are needed,” the memo said.
All deals worth $600 or more will still be scrutinized to ensure they are for a “valid business purpose, related to the promotion or endorsement of goods or services provided to the general public for profit.”
The CSC also reminded schools that third parties cannot make payments on behalf of athletes to cover agent fees or buyouts from contracts with previous schools. The CSC said it had received reports of both things happening.
“This conduct is not permitted and, if discovered, may result in discipline for both the institution and the student-athlete,” the memo said, adding it will soon require schools to provide additional information about paying agent fees.
The commission said it would also be reaching out to schools and athletes about deals that were cleared “in which it appears that student-athletes never performed the obligations required under those deals.”
A key part of the House settlement, which was approved last year and set the parameters for how college athletes can be paid, was the rule that athletes received money for their NIL, not simply to play a sport.
Schools are allowed to spend up to $20.5 million to pay athletes, but the CSC’s major task is evaluating deals struck between athletes and third parties that do not count against the $20.5 million cap.
Those deals, according to the rules, must be for a valid business purpose and be appropriately valued for the services the athlete is providing.
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AP college sports: https://apnews.com/hub/college-sports