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  1. The NCAA Responds with New NIL Guidance With concerns mounting, in February of this year the NCAA’s Division I Board of Directors requested that the NCAA’s Division I Council Working Group (the “Working Group”) review the effects of NIL on student-athletes, and to clarify existing NCAA rules that university and university-collective relationships may be violating. On May 9, 2022, the NCAA Division I Council Working Group issued Guidance Regarding Third Party Involvement to address compliance for universities with affiliated NIL Collectives. Specifically, the guidance states in bold lettering that many newly formed entities benefitting student-athletes under the guise of NIL — in other words, NIL Collectives — are subject to the NCAA’s rules regarding boosters: It appears that the overall mission of many, if not all, of the above-referenced third party entities is to promote and support a specific NCAA institution by making available NIL opportunities to prospective student-athletes (PSA) and student-athletes (SAs) of a particular institution, thereby triggering the definition of a booster. The guidance goes on to outline a few notable prohibitions that could be triggered by current arrangements between boosters (i.e., NIL Collectives) and potential student-athletes: Boosters may not have conversations (g., text, call) “for a recruiting purpose” with potential student-athletes, or those closely associated with the athlete; NIL arrangements may not be contingent or guaranteed based on enrollment at a particular school; University coaches and/or staff may not facilitate meetings between potential student-athletes and boosters or communicate with potential student-athletes on behalf of a booster; and NIL agreements must be based on a case-by-case analysis of the value a student-athlete brings compared to compensation or incentives for enrollment decisions, athletic performance or achievement, or membership on a specific team. Next, the guidance reiterates that similar requirements exist for current student-athletes, specifically noting that continued enrollment at a particular institution cannot be conditioned on a NIL arrangement. Finally, the guidance provides a non-exhaustive list of still-applicable NCAA legislative rules corresponding to provisions invoked by these relationships between NIL Collectives and student-athletes: Prohibition on university representation of student-athlete athletic ability or reputation;4 Public comment on potential student-athlete limited to university’s recruitment of the individual;5 Boosters may not recruit, defined as “any solicitation of a PSA or a PSA’s family members by an institutional staff member or by a booster for the purpose of securing the PSA’s enrollment …” on behalf of a school;6 Boosters may not provide financial aid or incentives to potential student-athletes unless such benefit is “the same benefit [ ] generally available to the institution’s prospective students”;7 Pay-for-play is still prohibited;8 Universities are responsible for impermissible recruiting activities engaged in “by a representative of athletics interest.”9 Taken together, the NCAA’s new guidance conveys a three-part message. First, NIL Collectives, as many currently operate, must play by the same rules that traditionally applied to boosters, Second, many current NIL arrangements may run afoul of the NCAA’s Bylaws. And third, colleges and universities can still be held responsible for the actions of NIL Collectives taken on their behalf. What is less clear, however, is whether — and how — the NCAA will enforce its Bylaws against member institutions. Read more: https://www.velaw.com/insights/nobody-did-anything-about-it-or-did-they-ncaa-releases-new-nil-guidelines-targeting-university-affiliated-nil-collectives/
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