New House vs. NCAA Court Filing

Lawyers for both parties submitted a revised agreement last Thursday to address the concerns Judge Claudia Wilken had about certain aspects of the settlement. The primary issue they needed to address was defining who would be included in the definition of third-party entities when paying college athletes.

The original agreement broadly defined third-party entities to include NIL Collectives, boosters, and virtually any business or individual that sought to compensate an athlete to play for their school. The amended agreement narrows that definition to focus more specifically on entities like NIL collectives and better defines “boosters” as an entity, group, or individual that has donated more than $50,000 throughout their lifetime.

The NCAA is attempting to eliminate the pay-for-play incentives and limit NIL payments for a valid business purpose. That has proven to be challenging after a recent ruling in Tennessee made enforcing any existing pay-for-play unenforceable. This new agreement, if accepted, will create a separate clearing house for all NIL agreements above $600 to be validated and approved. If a deal is determined to be pay-for-play or not for a valid business purpose, the deal could be rejected, and the athlete could be subject to penalties if they ignore the findings.

These new filings make it clear the NCAA wants to crack down on pay-for-play, which will increase the scrutiny on NIL Collectives and other entities that may be trying to game the system in favor of their school or program. It will also greatly impact the marketplace, as the level of reporting and tracking for athletes will be greatly increased.