Establishing College Football Name, Image, and Likeness (NIL) Governance
By Matthew Stefanski Jr.; Photo Credit: Ashley Cefali/Grand Valley State University
On July 1, 2021, the NCAA ushered in a new age in college athletics by adopting an interim policy allowing collegiate athletes to profit from their name, image, and likeness (“NIL”) for the first time.[1] This interim NIL policy came in the wake of the Supreme Court’s decision in National Collegiate Athletic Association v. Alston – occurring just ten days prior – where the Court ruled narrowly that NCAA rules restricting non-cash compensation for academic related purposes (i.e. computers, internships) failed rule of reason analysis and were violative of federal antitrust law.[2] Alston notably left NCAA rules central to its restriction of NIL intact, including those restricting athletic scholarships and cash compensation for athletic performance.[3] However, this decision raised questions about the validity of these and other central restrictions.[4] Alston indicated that the NCAA would not be able to establish a procompetitive justification for many of its then-in-place NIL restrictions, which is mandated in order to survive rule of reason analysis.[5] As a result, the NCAA interpreted Alston as the nail-in-the-coffin for the pre-NIL age and decided to allow NIL through an interim policy.[6]
In the time since the NCAA’s interim NIL policy, the NIL landscape in college football has devolved into a wild west, lacking a meaningful and effective system that governs NIL. NIL today is effectively uncapped and unchecked, allowing the richest Power 5 programs to rise above the rest while damaging lesser programs.[7] Nike co-founder and Oregon alumnus, Phil Knight, has quite literally signed a blank check for his Oregon Ducks football program, pledging unlimited NIL funds to allow for more lucrative NIL deals for potential members of the team.[8] In a similar move attempting to take advantage of the lack of NIL cap, Deion Sanders’s Colorado football program recently sent an assistant coach to Saudi Arabia to lobby its government for the type of NIL money required in college football today.[9] These come as a result of the NCAA’s lack of a uniform system governing NIL, as well as inevitable litigation that occurs when the NCAA attempts to govern NIL in any way.[10] The reality is that the NCAA’s divergence from its previous NIL stance in the wake of Alston – which may have actually been a good faith attempt to embrace NIL in the modern age of college sports – today is exploited as an admission of wrongdoing.[11] Each subsequent attempt by the NCAA to govern NIL, which almost always restricts a collegiate athlete’s ability to profit from his NIL in some way, is accompanied with its corresponding lawsuits alleging violations of the Sherman Act.[12]
This litigious atmosphere has led to a lack of a uniform NIL regulatory framework in college football, which disproportionately favors college football programs able to raise the most money for their NIL collectives.[13] Top football programs in each of the Power 4 conferences are able to field the largest NIL collectives, and subsequently land the most highly touted transfer portal prospects.[14] This coupled with the current NCAA transfer rules – allowing collegiate athletes to transfer each year without being ineligible the next season for participation – leads to the best players from football programs with lesser NIL collectives being poached yearly by the blue bloods.[15] In fact, Boise State – 2024 Mountain West conference champions, earning a first-round bye at the expanded 12-team college football playoff this year – attested to their best players being offered between two and ten times what Boise State’s football program could offer for their athlete’s NIL.[16] Without a system restricting programs with the largest NIL collectives from laying siege on lesser programs, even a football program as highly-regarded and successful as Boise State is not safe from ripple effects.[17]
I feel that a soft NIL cap would address this growing disparity in college football by setting a maximum NIL payment threshold and levying a competitive balance tax on any football program with an NIL payroll above the cap.[18] Revenues collected from programs above the soft cap are then redistributed to poorer teams, in an effort to account for competition disparities.[19] Soft caps are effective at lessening competition disparities in that they naturally lessen the highest payrolls by providing an incentive for the richest to pinch pennies, while also simultaneously increase the lowest payrolls by redistributing revenues from the competitive balance tax.[20] Implementation of a soft cap does require the NCAA to abandon any traces of its steadfast position that collegiate athletes are amateurs, as well as form an official players’ union to negotiate a collective bargaining agreement where the soft cap and other related issues are negotiated.[21] However, the path to fixing the current untenable system in college football should be embraced by the NCAA and collegiate athletes in the form of a collective bargaining agreement and soft cap.
Matthew Stefanski Jr. is currently a 2L at Vanderbilt Law School. He is from Frankfort, Michigan, and graduated from the University of Arizona with a major in Law.
[1] See Michelle Brutlag Hosick, NCAA Adopts Interim Name, Image, and Likeness Policy, NCAA (June 30, 2021, 4:20 PM), https://www.ncaa.org/news/2021/6/30/ncaa-adopts-interim-name-image-and-likeness-policy.aspx.
[2] Nat’l Collegiate Athletic Ass’n v. Alston, 594 U.S. 69, 104 (2021).
[3] See William Frush, The NCAA and a Hard NIL Cap: Envisioning an Upper Limit to NIL Compensation to Promote Competitive Balance in College Football, 101 U. Det. Mercy Law Rev. 1 (2023).
[4] See id.
[5] Id.
[6] Id.
[7] See e.g., Kristian Dyer, Oregon Football Has ‘Unlimited’ NIL Backing from Nike, Yahoo Sports (July 10, 2024), https://sports.yahoo.com/oregon-football-unlimited-nil-backing-203209065.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAADpDDlVfyzueyihyAClCuwe02AucHzeUqspdXkuEJ48gj6kIV2oA8wxTbDrWUvaHBwis4vPWfZByesq33ODuEO3eAFxGXyVNFPyEgXcY_dfWxC1Lf3pmcHLAVH4wYfdIJbl9i3W99R1qBV5HBRDyT6i1HiQ1toX0RrKqq0_uOdWA.
[8] Id.
[9] Jeff Hauser & Jason Jones, Former Colorado Coach Says He Sought NIL Funding from Saudi Arabia’s PIF in Unprecedented Move, Sports Illustrated (Aug. 26, 2024), https://www.si.com/college/colorado/football/colorado-sought-nil-funding-from-saudi-arabia-pif-in-unpreceded-move.
[10] See Brian Adkins, Clayton Barnett & Stephen Best Buchalter, NIL: Never-ending Intercollegiate Litigation, JDSupra (Feb. 9, 2024), https://www.jdsupra.com/legalnews/nil-never-ending-intercollegiate-7519278/.
[11] See id.
[12] See id.
[13] See Joe Drape & Allison McCann, In College Sports’ Big Money Era, Here’s Where the Dollars Go, The New York Times (Aug. 31, 2024), https://www.nytimes.com/interactive/2024/08/31/business/nil-money-ncaa.html.
[14] See id.
[15] See Ralph D. Russo, NCAA Allows Transfer to be Immediately Eligible, No Matter How Many Times They’ve Switched Schools, Associated Press (Apr. 17, 2024, 6:44 PM), https://apnews.com/article/ncaa-transfer-rules-9c1c8b499e21a26e7978f22ed35a380a.
[16] Ryan Morik, Boise State Coach Pleads for Fans to Donate to NIL Fund with Other Teams Offering Up To ’10 Times More’, Fox News (Jan. 3, 2025, 3:05 PM), https://www.foxnews.com/sports/boise-state-coach-pleads-fans-donate-nil-fund-other-teams-offering-up-10-times-more.
[17] See id.
[18] See Kyle Irving, Does MLB have a Salary Cap? How Baseball’s Luxury Tax Compares with NFL, NBA, NHL Contract Limitations, Sporting News (Dec. 22, 2023), https://www.sportingnews.com/us/mlb/news/mlb-salary-cap-luxury-tax-nfl-nba-nhl-contracts/4b84e9dcb056cb3c9685ace1.
[19] Competitive Balance Tax, MLB, https://www.mlb.com/glossary/transactions/competitive-balance-tax (last visited Jan. 6, 2025).
[20] See Irving, supra note 18.
[21] Frush, supra note 3.