Title IX concerns mount as more schools work closely with NIL collectives

As a growing number of institutions test the boundaries of their relationship with school-affiliated collectives, concerns mount over the elephant in the NIL space: Title IX.

The 51-year-old federal law protects students from sex-based discrimination at any school that receives federal funding. The Drake Group, a non-profit advocacy organization, claims that schools are evading Title IX responsibilities as their affiliated collectives distribute an overwhelming majority of dollars to male athletes. 

In a 10-page pointed memo The Drake Group sent to the U.S. Department of Education’s Office for Civil Rights on Aug. 1, the group stated that OCR guidance related to collectives and Title IX compliance is “urgently necessary,” calling the OCR’s silence on the issue “inexplicable.”

“It is not the responsibility of [OCR] to fix the chaotic NIL arena,” the memo said. “It is the responsibility of [OCR] to make it clear to higher education institutions that they cannot use NIL collectives to evade Title IX athletics obligations.” 

It marked the fourth correspondence The Drake Group, which works to educate Congress and higher education policy-makers with critical college sports issues, has had this year with the OCR. The group has yet to receive a substantive response beyond that the OCR will take the issue under consideration. 

The NCAA’s evolving guidance states that schools need to maintain some distance from collectives. But many schools are ignoring that guidance – and the NCAA has shown little appetite to police such NIL activity. 

As a result, several industry sources tell On3, more than half of Power 5 collectives are working closely with school fundraising arms regardless of whether school-friendly state NIL laws are greasing the skids for such relationships.

“Some schools are hesitant to get too involved with collectives right now because of the uncertainty surrounding how Title IX applies to that relationship,” Mit Winter, a college sports attorney at Kansas City-based Kennyhertz Perry, told On3 on Tuesday.

Schools should maintain Title IX compliance

But because more schools and collectives are becoming tethered, The Drake Group asserts, schools need to maintain Title IX compliance. There is a dollar disparity when it comes to what collectives are giving male and female athletes. The memo notes, during the first two years of the NIL era, Texas A&M male athletes earned $8,412,816.96, while female athletes earned $134,661.

It also references comments made by Jason Belzer, CEO of Student Athlete NIL (SANIL), which manages some 30 collectives, at a June college athletics panel in Washington, D.C. Belzer said that 95% of NIL money is distributed to men. 

“Collectives were always created with the goal of, ‘Eventually we need to help juice our programs,'” Seattle-based attorney Julie Sommer, executive director of The Drake Group Education Fund, told On3.

“As it turns out, which is not surprising, they want to juice largely the football and men’s basketball programs, and unfortunately ossify, to even a much larger degree, all of these long-standing discriminatory inequities between men’s and women’s sports and how Title IX applies – and at a time when women and Olympic sports have made huge strides in popularity and viewership despite the lack of equity in marketing and promotion.”

An On3 email to the OCR was not returned.

Asked for a reaction to The Drake Group’s memo, the NCAA said in an email: “Title IX of the Education Amendment of 1972 is a federal law. The NCAA advises its schools to comply with all federal laws, which include Title IX. The Department of Education’s Office of Civil Rights supervises compliance around Title IX, not the NCAA. Additionally, all NCAA member schools are required to have a Title IX coordinator on staff to assist with their university compliance. The NCAA is committed to gender equity and inclusion for all student-athletes. The NCAA also expects its member schools to be accountable to the well-being of its student-athletes and on the promotion of equity around potential opportunities.”

Collectives are ‘entangled, entrenched’ with schools

Collectives “not equally benefitting female athletes, enabling higher education institutions to evade their Title IX recruiting, publicity, promotion, and financial aid obligations,” the memo states. Title IX is applicable because schools and most collectives are “entangled, entrenched and integrated with the schools,” according to the memo.

“The schools have a true and obvious ‘hands-on approach’ that is no longer murking below the surface,” the memo said. “The relationship is direct and obvious. Indeed, this new reality is prompting many athletics directors and others to argue that the NIL monetization should just be officially brought in-house to avoid the subterfuge.”

Sommer noted that the IRS has already issued its memo pertaining to collectives, stating that donations made to collectives designated as non-profits would not be tax-exempt. 

The Drake Group is not seeking the OCR to issue any new guidance. Rather, they want the OCR to merely issue its existing guidance as it applies to the relatively new world of NIL collectives. 

‘Don’t touch it with a 10-foot pole’

Numerous athletic directors and NIL stakeholders have told On3 that it would be mutually beneficial if collectives were formally brought in-house – under the umbrella of the university’s fundraising arm. It would address donor fatigue, streamline activities, help all parties row in the same direction and, most importantly, ensure that the school remains Title IX compliant.

There would be no need for subterfuge. 

Winter echoed those sentiments, saying allowing schools to directly or indirectly use donor dollars for NIL payments or schools to fund and direct collectives would have several benefits for both entities. Most importantly, an in-house model could potentially help ensure Title IX compliance, he said.

That’s because dollars flowing to the athletes would likely be subject to scrutiny under Title IX’s equality of opportunity prong, which compares the benefits provided to male and female athletes.

“This means the schools and the collectives would both have the incentive to ensure that NIL dollars are being distributed in a way that complies with Title IX,” Winter added. “If a relationship is established where it becomes clear that Title IX will apply, and the school has more control over the flow of NIL dollars, it could remove some of that hesitancy to get involved.”

How Title IX applies to collectives’ activity in the current landscape – where collectives are not formally in-house – was a topic discussed during a panel at LEAD1 Association’s spring meetings in Dallas. Sarah Wake, who advises universities on athletic compliance issues in her role as an attorney at McGuireWoods, said she’s “very concerned” about those relationships that could develop. She said the more entrenched a school gets with a collective, the more problematic it is. 

Her advice to colleges: “Stay out of it. Don’t touch it with a 10-foot pole.”

‘Why are you essentially ignoring women’ for deals?

The Drake Group’s memo notes that the NCAA still has not brought any cases against schools based on violations of its NIL rules that require a certain degree of separation between the schools and collectives. In its March 9 correspondence with the OCR, The Drake Group said that the “failure” of the NCAA to enforce its rules allows member institutions to “ignore Title IX and is tantamount to permitting sex discrimination.”

Additionally, The Drake Group’s memo stated that athletic departments cannot engage in NIL group or co-licensing agreements – agreements in which the institution and individual athletes or athletic teams respectively grant their NIL rights to a third party that combines them for the sale of a product – in a manner that favors males over female athletes. 

One example of group licensing is Electronic Arts’ development of a college football video game that will involve 120 FBS schools and their male players who will receive payments for their NILs. There are no such video games involving women’s sports.

“Why are you essentially ignoring the women for these deals when we know that even despite the historical inequities in marketing and promotion for women, we know that they’re breaking all of these viewership records?” Sommer said. “A lot of the female athletes, they’re doing well – not across the board – but the ones that I think do really well are doing it because they’re curating their own brands, their work online. 

“It’s not the collectives that are essentially doing the work for them, like on behalf of the football team or basketball teams. At a moment when they’re really breaking through, 50 years after Title IX, here we are with these deals just for the guys.”