From Athletes to Assets: Legal and Valuation Impacts of the NIL Ruling, and What You Need to Know Now

The financial experts at Resolution Economics have been closely monitoring the name, image, and likeness (“NIL”) legal proceedings, which have reached a settlement. On June 6, 2025, Judge Claudia Wilken approved a settlement agreement between the National Collegiate Athletic Association (“NCAA”) and the top conferences, as well as law firms representing Division 1 student-athletes.[1] [2] This settlement agreement drastically changed the way that student-athletes will be compensated for their NIL by their schools.

Background

Historically, the NCAA strictly prohibited student-athletes from profiting off their NIL. On June 15, 2020, the initial class action complaint was submitted by Grant House and Sedona Prince against the NCAA, igniting the legal debate over whether student-athletes should be compensated for the commercial use of their NIL, a right that had long generated substantial profits for organizations like the NCAA and its partners, while the student-athletes themselves received no direct compensation.[3]

In July 2021, the NCAA implemented a temporary and deregulated NIL policy that allowed student-athletes to engage in NIL deals with third parties, provided such deals complied with state laws and school rules.[4] However, schools and conferences were still barred from directly paying student-athletes for their NIL, especially in contexts like game broadcasts, jerseys, or institutional promotions.

To fill that gap, NIL collectives emerged as third-party nonprofit entities. These booster-funded organizations, operating independently from athletic departments and institutional advancement offices, pooled resources from alumni, donors, and sponsors to create NIL opportunities for student-athletes. Often, these collectives offered compensation in exchange for appearances, social media posts, or other promotional services.  Despite the compliance with the NCAA policy, many felt that the contractual arrangements between the collectives and student-athletes walked a fine line between legitimate endorsements and pay-for-play arrangements.

Future Impact of the Settlement

The settlement allows for student-athletes to be paid directly by schools.  According to ESPN’s Dan Murphy, “Moving forward, each school can pay its athletes up to a certain limit. The annual cap is expected to start at roughly $20.5 million per school in 2025-26 and increase every year during the decade-long deal.”[5] These direct payments are in addition to existing benefits like scholarships and stipends, though some universities are beginning to shift away from traditional scholarships by combining NIL compensation with stipends. In addition, the NCAA has agreed to pay nearly $2.8 billion in back damages over the next ten years to student-athletes who competed in college between 2016 and the present and were ineligible for NIL compensation under prior rules.[6]

The settlement still allows student-athletes to receive compensation from third-party organizations, such as collectives, publicly traded companies, and private companies.  Beginning June 7, 2025, NCAA Division I student-athletes must report third-party NIL deals with a total value of $600 or more in aggregate – including contracts or payments with the potential to meet or exceed $600 via payment structures including but not limited to royalties, contingencies, and bonuses.

College Sports Commission

To enforce the new NIL framework, the Big Ten, SEC, and other power conferences have established the College Sports Commission (“CSC”), a newly formed oversight body tasked with monitoring payments from schools and boosters—a function previously handled by the NCAA’s national office.[7] [8] The CSC has partnered with Deloitte to develop an online platform called NIL Go, which reviews all new third-party NIL deals over the $600 threshold to ensure the arrangements meet compliance standards. NIL Go is designed to evaluate a deal under the three categories: (1) payor association, (2) valid business purpose (“VBP”), and (3) range of compensation (“ROC”).[9] [10] NIL deals executed between student-athletes and those publicly traded companies whose business was not formed solely or significantly for purposes of promoting or supporting student-athlete/NIL opportunities are exempt from Deloitte’s third-party review, but still must be reported on NIL Go.[11]

NIL Go and Fair Market Value

It is important to note that NIL Go does not calculate Fair Market Value (“FMV”) for each third-party NIL deal.[12] NIL Go’s reasonable ROC determines whether the subject deal submitted by the student-athlete does not exceed a reasonable ROC based on multiple factors, including but not limited to, the deal’s performance obligations, the student-athlete’s athletic performance and social media reach, the local market, and the market reach of his or her institution and program.[13] That being said, it remains unclear what factors NIL Go and Deloitte use to determine a ROC for specific players; however, a published article discusses the following 12-factor analysis used to evaluate third-party NIL deals.[14]

1. 1. Athlete’s individual marketability and social media reach
   2. Athletic performance and public profile
   3. Type and scope of deliverables (appearances, content, etc.)
   4. Geographic market size and demand
   5. Deal duration
   6. Exclusivity clauses
   7. Renewability or extension terms
   8. Comparable market benchmarks
   9. Involvement of donors or booster entities
   10. Timing of the deal (relative to recruiting, transfers, etc.)
   11. Quality and completeness of documentation
   12. Red flags suggesting illegitimacy or inducement

The CSC has not explicitly stated what steps are completed to analyze and clear the NIL deal of a specific player, determine a reasonable ROC, or if the above 12-factor analysis is even applicable. However, if a deal is not cleared, a student-athlete has the following three options, according to the CSC:[15]

1. 1. Revise the deal and resubmit: Student-athletes have the option to work with the payor to renegotiate the deal and resubmit it to NIL Go.
   2. Cancel the deal: Student-athletes have the option to cancel the deal and refund any money already received.
   3. Appeal to neutral arbitration: Student-athletes can appeal through a neutral arbitration process to obtain a review of the decision.

Compliance & Legal Strategy

According to former NFL executive Jack Easterby, “Early estimates suggest that up to 70% of prior NIL collective deals would fail under the new standards of NIL Go.”[16] This underscores a growing need for preclearance review, compliance strategy, and dispute resolution support.[17] Schools and student-athletes navigating this post-settlement landscape must ensure that their third-party NIL agreements are properly structured, fairly valued, and free from inducements or employment risks.

Legal counsel, whether representing schools, student-athletes or third-party payers, will need to collaborate closely with valuation, financial and compliance professionals to support deal structuring, determine ROC, and respond to CSC inquiries or arbitration proceedings. This multidisciplinary approach of integrating law, economics, valuation, and compliance will be key to success in the next era of college sports. 

Disclaimer: Andrew Kelly currently serves as the President of a Division 1 school’s athletic booster club organization. The above article is co-authored based on his independent research and from his professional viewpoint. The article does not reflect the views, opinions, or position of his school, the school’s athletic or institutional advancement departments, and/or his athletic booster club organization.

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