IndyBar: NIL Development in Amateur Sports

By Jaclyn Flint, Riley Bennett Egloff LLP

For many years, collegiate athletes faced restrictions on their ability to earn compensation related to their image or athletic performance. However, recent policy changes and judicial decisions surrounding student-athlete compensation have significantly changed the landscape of collegiate athletics. Beginning in July of 2021, following the unanimous United States Supreme Court decision in NCAA v. Alston, 594 U.S. 69 (2021) (in which the Court decided that restrictions limiting collegiate athletes to be compensated only with education-based benefits violated federal anti-trust laws), the National Collegiate Athletic Association (NCAA) has allowed collegiate athletes to be paid for use of their names, images, and likenesses (NIL). This means that student-athletes can now earn money from endorsements, sponsorships, autograph signings, social media posts, and other activities based on their NIL. However, since 2021, the NCAA generally has restricted collegiate athletes from capitalizing on their NIL in certain ways, including limitations on use of school or conference intellectual property for NIL activities without permission, and restrictions on student-athletes from being paid on a pay-for-play basis, meaning that athletes cannot be paid directly for their athletic performance for a particular institution.

Further dramatic changes to the collegiate athletics landscape are soon anticipated in light of a set of lawsuits pending before the United States District Court for the Northern District of California, collectively referred to as House v. NCAA. The plaintiffs in House are former NCAA Division I student-athletes, including former swimmers, basketball players, and football players, who allege the NCAA violated applicable anti-trust laws by restricting their ability to receive compensation for NIL prior to July 2021. The plaintiffs seek an injunction to require the NCAA and member athletic conferences to allow for revenue sharing from broadcasting and marketing contracts with collegiate athletes.

On May 23, 2024, the NCAA and the Power Five member conferences (the Atlantic Coast Conference, Big Ten Conference, Big 12 Conference, Pac-12 Conference, and Southeastern Conference) reached a tentative settlement with the plaintiffs in House, whereby the NCAA and Power Five conferences agreed to pay approximately $2.8 billion in back-pay damages to former collegiate student-athletes since 2016. The NCAA and the Power Five conferences also agreed to a revenue-sharing model that would allow for student-athletes to receive approximately 22% of the average Power Five school’s broadcasting and marketing revenue beginning as soon as the 2025-26 academic year. Through this tentative settlement, NCAA Division I college athletes would be allowed for the first time to receive payment directly from the institutions for which they compete in connection with their athletic contributions. While the federal judge in the House case initially rejected this tentative settlement, the judge granted preliminary approval of the settlement on October 7, 2024 and set a schedule for remaining measures necessary to finalize the settlement. A final hearing to approve the settlement is currently scheduled for April 7, 2025.

While the tentative settlement in House sets the stage for a seismic shift in collegiate athletics, additional questions remain. For example, will the House settlement render existing student-athlete collectives, which help contribute and organize a large percentage of NIL payments to student-athletes today, obsolete? And, will the payment structure set forth in the House settlement create Title IX concerns for collegiate institutions? As it has for the past several years, the landscape of collegiate athletics and compensation for student athletes continues to evolve and will continue to do so well after House.•

Jaclyn Flint is an associate at Riley Bennett Egloff LLP where she represents and advises clients in a wide variety of business and litigation matters, including matters related to commercial and business litigation, sports, entertainment, media, intellectual property, licensing, and corporate formation. Prior to joining Riley Bennett Egloff LLP, Flint served as a federal Law Clerk for the United States District Court for the Southern District of Indiana, where she had the honor of working with the Honorable Judges Larry J. McKinney, Sarah Evans Barker, and Tanya Walton Pratt. Flint provides pro-bono legal counsel to the Boilermaker Alliance (a non-profit NIL collective for Purdue University student athletes) and serves as legal counsel to multiple businesses in their efforts to engage collegiate athletes in promotional and marketing activities. She is an active member of IndyBar, serving as Chair-Elect for the Intellectual Property Section and as an at-large member of the Sports and Entertainment Law Section.