Pre-Approval, California Legislators & NLI's Swan Song | NIL Blitz: Oct. 7 - Oct. 13

Hey crew!

We’ve got a packed edition this week with massive updates across college athletics. From landmark legal settlements to California shaking up the future of athlete pay, this is a week you'll want to be up to speed on. Here we go!

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1. House Settlement Pre-Approved! ??

2. NLI Out / NIL In? ?

3. October '24 DI Council Notes ??

4. MMR + Learfield Fanbase Report ??

5. California Says Pay 'Em ??

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1. House Settlement Pre-Approved! ??

As announced last Monday, the House settlement crossed a critical milestone: preliminary approval. (I've found it helpful to think of this like the "pre-approval" you get for a loan, mortgage, car, credit card, etc. - it's an important early indicator, but it is by no means final.)

This massive $2.8 billion deal marks a turning point in the fight for athlete compensation, particularly through revenue sharing. With its pre-approval, schools across the country are bracing for a fundamental change in how college sports are financed. This has cleared a bit (not all, just a bit) of the fog for folks throwing their hands up saying "we don't know what is going to happen". Still not complete certainty, but it gives more confidence that the hours necessary for restructuring an athletic department model will not be in vain. Texas's AD Chris Del Conte jumped on the news with a letter to donors explaining the settlement's progress and what is expected of the Longhorn faithful.

Next up? The process is forecasted to continue as follows:

THIS WEEK: Oct 18 | class notified/objection window opens

100 DAYS: Jan 31 | objection window closes

6 MONTHS: Apr 7 | final fairness hearing

7 MONTHS: May 15 | first back payments distributed

Stay tuned — this is far from over!

(P.S. -- I highly recommend anyone in the industry — even those who aren't in housed in compliance — give the House settlement long-form a review because these will be the primer for the next decade of college sports. Here is a link to it and here is a link to my Blitz coverage when it dropped.)

2. NLI Out / NIL In? ?

The National Letter of Intent (NLI) program has reached its swan song. Last week, the NCAA announced its elimination, signaling a new era for college recruiting. While the NLI once held athletes to a binding commitment upon signing, the new system grants them more flexibility, especially in a transfer portal world where athlete movement is more dynamic than ever.

This could have a massive impact on recruiting strategies and athlete retention. As far as NIL, there was always an intersection on the question of when a recruit could enter into a collective deal - with some liberally interpreting the rules to allow for the signing of an NLI to open the athlete up for collective cash.

The NCAA's NIL rules aren't presumed to transform as a result of program's dissolve, but there are some pieces of guidance that may need a revisit:

• May 2022 NIL Guidance: "NIL agreements must be based on an independent, case-by-case analysis of the value that each athlete brings to an NIL agreement as opposed to providing compensation or incentives for enrollment decisions (e.g., signing a letter of intent or transferring), athletic performance (e.g., points scored, minutes played, winning a contest), achievement (e.g., starting position, award winner) or membership on a team (e.g., being on roster)."
• Bylaw 22.02.1: "Name, image and likeness compensation must: (b) Not be contingent upon initial or continued enrollment at a particular institution"
• January 2024 DI Council Report: "Current regulations do not adequately address the challenges of today’s NIL environment because the legislation that governs the interaction between NIL entities and prospective student-athletes focuses on the content of the communication (recruiting conversation), rather than a strict communication prohibition. The events that would permit communication, offers and the provision of benefits adequately protect the recruiting environment by intentionally ensuring a student-athlete establishes standing at an institution prior to engaging in communication with NIL entities. The signing of a National Letter of Intent is an intentional event and does not include signing a financial aid..."

All of these pieces of guidance may be moot though, as the NCAA recently took down their NIL landing page which housed these various pieces of guidance. Possibly an indicator of more unraveling of regs.

There are a few state laws (including Missouri's) which point to NLI as a trigger for NIL opportunities.

This won't be the focus of the pivotal change, but it goes to show when a pillar of the experience changes there are ripple effects. The structure was morphing anyways, without penalties being held for athletes jumping ship in year one. Overall, it seemed like the biggest negative response was concern over whether or not the iconic signing day reveals/memes would live on. (I have a feeling they will find a way.)

And on the bright side, there won't be anymore mix-ups mistakingly calling "NIL" "NLI".

Expect more on the commitment process to be developed in the coming weeks and months.

3. October '24 DI Council Notes ??

Along with the NLI news from above, here are a few housekeeping items from the DI Council meeting.

• Spring Transfer Portal | No change, the portal window will remain this year to offer consistency amid the various changes in the industry
• Multi-Team Event (MTE) Waiver | The DI Basketball Oversight Committees previously approved a blanket waiver for the '24-'25 season for MTE rules that otherwise limit each event to one team per conference and limit teams from participating in the same event more than once in a four-year period; interesting as it comes when MTEs and their sponsors are upping attention for direct-to-athlete payouts (e.g., the million-dollar Players' Era MTE in Vegas)
• Proposal: Men's Ice Hockey/Skiing | Student-athletes in Men's Ice Hockey and Skiing can get paid/earn prize money without losing NCAA eligibility (expected effective date: Aug 2025)

For more changes, mark your calendar for January's meeting at the 2025 NCAA Convention in Nashville, TN.

4. MMR + Learfield Fanbase Report ??

If you’re involved in college sports, you’re going to want to dig into the College Athletics Fanbase Fan Report by Learfield. The report breaks down key trends in fan engagement, sponsorship opportunities, and the shifting media landscape around college athletics. NIL and athlete branding were front and center, with data showing how brands are aligning their dollars with the most marketable athletes and schools.

Key findings compiled from 6B+ "Fan Data Points":

• Sponsorships including "Real NIL Assets" outperformed baseline indices for Brand Awareness, Brand Consideration, Positive Brand Impression, Brand Regard (Higher), and Purchase Intent (Higher)
• >40% of Fans Strongly Agree/Agree to (1) Support of NIL, (2) Likelihood of Buying an Endorsed Product, and (3) Recognition of an Athlete
• The influence of NIL is greatest among the youngest age demographics (18-24, 25-34) and weakest among older (65+)

Short summary: Fan interest in athlete partnerships has never been higher, signaling an even bigger role for NIL in media deals moving forward. Learfield’s insights are worth the comb-thru if you haven't seen them yet.

5. California Says Pay 'Em ??

California continues to lead the charge in athlete compensation with its latest pay-for-play push. The authors of the avant-garde "Fair Pay to Play Act" of 2019 which put NIL reform on the radar for the NCAA and the rest of the country have spoken up again, this time urging Californian universities to directly pay athletes NIL money since the law permits direct pay & prohibits enforcement.

Why hasn't anyone jumped in the water yet?

I can tell you why schools in 9 states haven't - their own laws won't let them.

• Kentucky (cannot direct that $ goes to an athlete for NIL)
• Montana (cannot compensate athletes, but they can serve as an agent for the athlete)
• Nevada (cannot compensate athletes)
• New Mexico (cannot compensate athletes)
• Utah (school cannot use state funds to help execute athlete NIL contracts)
• Louisiana (but will be allowed the minute the NCAA changes rules, there is a court order, or settlement)
• Oregon (cannot offer $ to athletes)
• Pennsylvania (cannot arrange NIL)
• Tennessee (cannot compensate athletes)

Revenue sharing + direct-to-athlete payments are anticipated to kick into gear in 2025. While some states like Georgia, Illinois, and Virginia (expect to see some first movers in these states) expressly permit it, there are other states who are at risk of being left behind.

Where California goes, other states often follow—so keep an eye on this one.

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