While NCAA might want to enforce certain NIL rules, can it legally do so?

The age-old open secret in college sports has been that certain well-heeled boosters funnel large sums of money to some of the most prized football and men’s basketball recruits to entice them to sign with their schools. Only now this rite of big-time recruiting is being played out — in the eyes of some concerned stakeholders — under the guise of NIL deals.

That means these new-age deals and, at times, the dollar amounts are more transparent, with boosters and industry leaders saying that any donor-led NIL collective worth its salt needs to amass an annual war chest of between $5 million and $25 million to lure elite prospects to campus. 

It’s against this backdrop that the NCAA Board of Directors has asked the Division I council to review the impact of NIL over concerns that some activity may be violating rules related to booster involvement. But here’s reality in the post-Alston U.S. Supreme Court world: It remains to be seen whether the NCAA can implement an enforcement mechanism that doesn’t leave it vulnerable to legal challenges over limiting athlete compensation. In fact, said Kansas City-based sports attorney Mit Winter, the NCAA’s NIL review serves as a plea for federal intervention that may not be around the corner.

“I think the NCAA is hoping the report [a final report with recommendations is due in June] will push Congress to pass an NIL bill sooner than is currently expected,” Winter told On3 on Monday. “The NCAA would probably like a federal bill to be passed in time for it to apply during the 2022-23 school year. I don’t think that’s realistic.”

The NCAA undoubtedly knew that boosters, who are as much a part of college sports as marching bands and tourney bracket pools, would pinpoint loopholes in permissive NIL bylaws. Preventing those loopholes was a focus of the NIL bylaw drafting process that the NCAA was engaged in, Winter said, but the time spent addressing those loopholes “went out the window” with the Alston decision. The Supreme Court decision, he said, is preventing the NCAA from implementing a NIL system where the association can review and keep tabs on deals, ensuring they are within market value. They had planned on doing that through a clearinghouse. 

“The Alston decision, and the concurring opinions, are such a weapon for any party challenging future limits on college athlete compensation,” Winter said. “Any new limits will be challenged. So the NCAA knows it needs limited antitrust immunity to put in any new NIL limits.”

Over the past several weeks, the increasing prevalence of school-specific, donor-led collectives — there now are at least 30 — have dominated the NIL conversation. Some were created to help current college athletes monetize their brands, earning a fair market value from engaging in deals that include autograph signings, meet-and-greets with fans and more. Others have been more brazen, attempting to pool funds from donors explicitly to help lure top-flight recruits to campus.

Concerns among administrators are mounting. Notre Dame athletic director Jack Swarbrick told NDInsider, “When you add in NIL without guardrails, you create a remarkable circumstance. … Most of what is being identified as NIL has nothing to do with that. They are talent acquisition fees as described as NIL. That is awful for us. That is bad for the lack of integrity associated with it.”

“It was always going to happen with NIL,” Chase Garrett, founder and CEO of Icon Source, told On3 about the inevitability of wielding NIL deals for recruiting inducements. Icon Source is a digital marketplace connecting brands and athletes. “If it can be done clean and in the right way [ensuring compliance and disclosure], that’s better than it being done under the table.”

Collectives typically are set up to accept donations from a wide swath of fans from a particular school. But in some cases, certain deep-pocketed boosters, who long have helped college athletes financially under the table, are operating solo, continuing to compensate athletes as part of NIL deals outside the established definition of a collective. The latter scenario has been less-publicized.

“They’re not announcing themselves as in, ‘I’m here to support athletes.’ They are just individuals that are operating more under the radar,” Blake Lawrence, the CEO and co-founder of Opendorse, which is working with nearly 10 collectives, told On3. “I think that occurs in like a lot of the Southeast of the United States. They may be individuals that have been highly supportive of student-athletes in the past, and maybe the behaviors haven’t changed, but the policies in which they’re following are now above the table.”

Is an effective NIL enforcement arm even possible? Bobby Bramhall, president and co-founder of Athlete Licensing Company, which has partnered with at least five collectives, believes some type of monitoring of NIL activities is needed. But he’s not sure the NCAA is the entity best positioned to do it. He sees a conflict of interest in the NCAA maintaining the amateur model and its ability to profit off the athletes.

The other challenge for the NCAA in investigating NIL deals is that to determine whether a NIL deal equates to an impermissible recruiting inducement, investigators must establish intent. Doing so, especially without subpoena power, is an especially formidable task.

“If not impossible,” Horizon League commissioner Julie Roe Lach, former NCAA vice president of enforcement, told On3. “It’s really hard to prove.”

The problem with the NCAA enforcing pay-for-play and recruiting inducement rules, Winter said, is that “it’s easy to structure a [NIL] deal so it’s not pay-for-play, and it’s hard to prove that a deal was a recruitment inducement. Where is the line for something being an impermissible inducement? If it was 51 percent of the reason a player went to a school? One-hundred percent? Five percent? No one knows.”