Sources: House Attorneys and Power Conferences Unite to Ease NIL Collective Hurdles

Adjustments to the College Sports Commission's Enforcement Approach

In the early stages of the House settlement, the newly established enforcement entity in college sports, the College Sports Commission (CSC), is modifying its approach. This shift comes after an agreement was reached between attorneys for the House plaintiffs and representatives from power conferences and the NCAA. The agreement involves changes to how the CSC evaluates third-party deals involving booster-backed collectives that compensate athletes.

According to multiple sources who spoke with Yahoo Sports under the condition of anonymity, the CSC will now treat collectives or any "school-associated entity" similarly to other businesses when assessing the legitimacy of these deals through the NIL Go clearinghouse. This marks a departure from the CSC’s earlier stance, which held collectives to a higher standard.

Previously, the CSC denied numerous athlete deals from collectives, arguing that entities solely focused on paying athletes do not meet the definition of a "valid business purpose." However, this interpretation faced resistance from House plaintiff attorneys, Jeffrey Kessler and Steve Berman. In a letter to the NCAA and power conference officials, they demanded the guidance be retracted and suggested that the rejected deals be reinstated. Kessler even threatened to escalate the issue to the magistrate judge overseeing House settlement disputes.

The revised approach could significantly impact the way collectives operate. It opens the possibility for school-affiliated, booster-backed collectives to provide athletes with compensation that does not count against a school’s revenue-share cap under the House settlement. This allows collectives to engage in deals as long as they offer public goods and services for profit, such as selling merchandise, hosting autograph sessions, or arranging athlete appearances at events like golf tournaments.

Administrators describe this adjustment as creating a "soft cap" rather than a hard cap. SEC Commissioner Greg Sankey highlighted this during an interview with Yahoo Sports, emphasizing that the change allows collectives to find legal ways to offer additional compensation. Big Ten Commissioner Tony Petitti echoed this sentiment, noting that successful initiatives often inspire replication.

This resolution also prevents potential legal challenges from leaders of NIL collectives who had planned to file a lawsuit against the CSC’s previous approach. Over the past four years, collectives have played a crucial role in compensating athletes, raising millions in booster funds to help schools recruit and retain players.

However, the original interpretation of the "valid business purpose" rule by the CSC aimed to shift athlete pay from booster-run organizations to the schools themselves. Under the capped system that began in July, schools are now permitted to directly share revenue with athletes. Despite this, many schools continue operating their collectives, either out of fear that others are doing the same or because they believe the settlement may not hold up under legal challenges.

Ole Miss coach Lane Kiffin expressed skepticism about the enforceability of the new rules, suggesting that some schools are not concerned about potential pushback from the clearinghouse or legal challenges. He pointed to the broader debate around athlete rights and the potential for continued negotiations over enforcement rules between the power leagues and the House plaintiff attorneys.

Sankey emphasized that schools maintain control over their affiliated collectives. He questioned why people had been asking for guardrails in the first place, stating that those advocating for such measures must now adhere to them. He warned that allowing the current situation to persist could lead to a lack of competitiveness among programs and undermine the national nature of college sports.

While the recent agreement addresses some issues, it may not end ongoing discussions about enforcement rules. Petitti noted that more negotiations are expected in the future, given the compressed timeline for settlement approval. Additionally, the CSC's reliance on athletes submitting deals means that the process remains dynamic. Athletes are required to submit any third-party deal exceeding $600 to the NIL Go clearinghouse, which then forwards flagged deals to the CSC for review.

As of two weeks ago, over 100 deals had been denied, with at least 100 more under review. More than 1,500 deals had already been approved, indicating that the CSC is actively involved in shaping the landscape of athlete compensation in college sports.