Department of Education states revenue sharing payments must follow Title IX

The U.S. Department of Education’s Office for Civil Rights released a memo on Title IX and NIL on Thursday, clarifying questions on whether revenue-sharing payments from schools must follow the parameters of Title IX. The federal law protects students from sex-based discrimination at any school that receives federal funding and stipulates schools must provide male and female athletes with equal treatment and benefits.

In the nine-page memo released Thursday, future revenue distributions from an institution to an athlete for NIL rights are classified as “financial assistance.” If not proportionally divided, schools would risk violating Title IX.

“When a school provides athletic financial assistance in forms other than scholarships or grants, including compensation for the use of a student-athlete’s NIL, such assistance also must be made proportionately available to male and female athletes,” the U.S. Department of Education memo stated.

For the 2025-26 academic year, schools will operate with a revenue-sharing cap of $20.5 million if the House v. NCAA settlement is officially agreed on this spring. Many schools were planning to allocate $15 to $17 million to football. Thursday’s memo will significantly impact those plans.

Sources told On3 on Thursday night that the guidance will significantly shake up how schools approach revenue-sharing payouts.

The memo also makes clear that the Department of Education does not view “compensation provided by a third party (rather than a school) to a student-athlete” as a Title IX violation. In addition, it does not “offer specific guidance on Title IX’s application in the context of compensation provided for the use of a student athlete’s NIL by a third party, including an NIL collective.”

NIL collectives have become imperative to retaining and attracting talent for top college football and basketball programs since athletes were allowed to begin monetizing their NIL four years ago.

Bay Area-based Arthur Bryant of Bailey & Glasser, LLP – who has represented more women athletes in Title IX litigation against schools and universities than any lawyer nationwide – previously told On3 that institutions, conferences and the NCAA need to be aware that whatever revenue-sharing model is implemented, Title IX requires that female and male student-athletes receive equal treatment and benefits.

Under Title IX, Bryant told On3, when it comes to “straight-out payments” – like scholarship dollars – “equal” means proportional. Bryant currently has a lawsuit against Oregon, arguing that Title IX violations were made with unequal NIL deals from the school and its NIL collective, Division Street.

The fact sheet comes in the final days of President Joe Biden’s administration. The guidance could be altered or reversed by President-elect Donald Trump after his inauguration Jan. 20.