High school leaders raise concern about clubs funneling NIL money directly to student-athletes

The Georgia High School Association has advised Peach State student-athletes to avoid signing up with the NIL Club because it could risk eligibility for the upcoming school year.

GHSA Executive Director Robin Hines sent a two-page letter to member schools last week warning of the hazard. The letter was first reported on by the Atlanta Journal-Constitution but also obtained by On3. The news in Georgia comes days after the Florida High School Athletic Association raised concerns about the NIL Club’s activities in the Sunshine State.

The NIL Club has been in business since 2021 with a primary focus on the college football space. In 2022, NIL Club co-founder Mick Assaf described the platform to On3 as a “way to provide athletes business tools to launch paywalled communities” and “provide exclusive behind-the-scenes content” to subscribers and boosters. The idea quickly caught on with players at more than 40 schools launching their own clubs. At the time, each player who joined a club equally shared 82% of the club’s revenue. Assaf said players have received more than $10 million since launching.

Yet, the NIL Club has battled to remain relevant in the college space thanks to the rise of donor-driven collectives and ever-changing legislation. Recently, the company launched its high school focus with NIL allowed by a majority of associations across the country. But as Hines points out in the letter, the GHSA’s NIL rules – and guidelines with many other high school associations – differ from college regulations.

Boosters not allowed to fund NIL per GHSA rules

According to the GHSA’s bylaws, Georgia high school athletes can profit from endorsements and advertising but not ventures that allow boosters to funnel them money.

“If any NIL club supporter, who is connected, directly or indirectly to the student’s school, either as an employee, member of a booster club or other booster (as defined by GHSA ByLaw 1.73) pays to view the posted content, such action can be found to be a violation of GHSA ByLaws Sections 1.70, 1.80 and 1.90 affecting not only the student’s eligibility but also their team’s ability to participate in postseason GHSA events,” Hines’ letter states.

“The potential for lost eligibility by students participating in NIL Clubs is magnified as participating students have no control over who pays to view their content and the status and intent of the supporter in doing so. The GHSA intends to fully investigate violations of and to enforce its NIL Rules which may result in forfeiture of contests, fines and loss eligibility.”

NIL Club building ‘compliance guardrails’

Assaf told On3 on Sunday the NIL Club is “doing everything we can from a technology standpoint to build robust compliance guardrails on our platform. Throughout June, we’ve been fortunate to receive feedback from the GHSA and many other state associations. This feedback has been invaluable as we strive to ensure full compliance with each state’s bylaws.”

“Specifically, regarding Georgia, I exchanged multiple emails with Dr. Robin Hines in October of 2023,” Assaf told On3. “In those emails, I explained how the NIL Club platform works, provided an example of a college team’s NIL Club, and asked if there was anything we could do from a platform standpoint to ensure full compliance with the GHSA’s bylaws. During this exchange, Dr. Hines made no indication that the NIL Club platform would cause any issues for student-athletes in Georgia.”

Florida HS leaders also concerned

In its letter to member schools principals and athletic directors, the FHSAA also raises concerns about the NIL Club.

“The FHSAA has been apprised that there may be a company that is seeking to collect money to provide NIL compensation to student-athletes, which is strictly prohibited by FHSAA Bylaw 9.9 Amateurism, which remains in effect,” the letter said. “This is a violation of FHSAA Bylaw 9.9 Amateurism and subject to sanctions including loss of amateur status. You may check the website of this company by going to the following: www.nilclub.com.

“Please meet with your principal, coaches, parents, student-athletes and any other representatives of the school’s athletic interest and clearly emphasize that FHSAA Bylaw 9.9 Amateurism and Name, Image, and Likeness has not been ratified by the State Board of Education, and as such, FHSAA Bylaw 9.9 Amateurism, remains in effect, and that no NIL activities are to be conducted.”

The Jacksonville Florida Times-Union reported last week that dozens of high school teams and more than 1,000 student-athletes across Florida were on the platform, including a handful of clubs that were already receiving money from boosters. The Times Union reported that after a call between FHSAA Executive Director Craig Damon and Assaf, those teams could no longer be found on the platform.

NIL Club: ‘Committed to making necessary adjustments’

Assaf told On3 that no high school student-athlete in Florida has received any money from the platform and will not be able to until after the state board ratifies NIL.

“In the past week, we released a major upgrade to our content moderation system to help ensure that school IP and marks are not featured in NIL Club content,” Assaf told On3. “As we continue to receive feedback from state associations, we will keep iterating and improving the NIL Club platform. Our goal is to ensure every student has a safe, educational and engaging experience as they begin their NIL journey.

“We understand the unique landscape of high school NIL and are committed to making necessary adjustments to meet best practices set forth by each state’s governing bodies. Ultimately, we aim to empower all students to begin their entrepreneurial journey and gain financial literacy experience.”