Film Room: Associated Entities and Individuals

NIL has been a dominant force in college athletics in recent years, opening a yet-to-be-closed regulatory can of worms.

Where does NIL fit in a post-House (assuming approval) landscape that includes institutional revenue share? What happens to Collectives? How does the proposed new regulatory structure comport with the outstanding injunction in the Tennessee case?

There’s a lot to unpack here. The angel is in the details, and so is the competitive advantage for your campus or conference. We’ll cover key aspects of the evolving NIL puzzle over time. Today, we’ll magnify the details of a concept introduced in the proposed settlement—Associated Entities and Individuals.

Big picture NIL framework under House
We’ll begin with the big picture: the proposed House settlement caps the amount of revenue institutions can share with student-athletes, and any amounts an institution provides to a student-athlete in consideration for a student-athlete’s NIL will count against the cap. However, third-party NIL is not subject to a cap and will continue to be the frontier on which support-rich programs will compete with each other. Getting ahead in that space requires a mastery of evolving regulatory considerations so that an institution can best accentuate its positives.

The watershed original settlement document filed in July 2024 referred to the familiar term “booster.” In a September 2024 hearing, the Court took issue with the term and the proposed settlement’s treatment of boosters and NIL. Later in September, the parties submitted an amended proposed settlement, which replaced “booster” with the related concept of an “Associated Entity or Individual.” The Court granted Preliminary Approval of that amended proposed settlement, which is what’s up for Final Approval in April 2025.

What is—and is not—an Associated Entity or Individual
The definition of “Associated Entity and Individual” reads like that of “booster” with some critical nuance. For example, an Associated Entity or Individual includes:

• an entity that “exist[s], in significant part, for the purpose of...creating or identifying NIL opportunities solely for a particular Member Institution’s student-athletes”—in other words, Collectives (as we currently know them)
• an individual who has contributed more than $50,000 over their lifetime to a member institution or its booster club or Collectives

So, the concept we’ve understood as “boosters” would (1) be broadened to expressly include Collectives and (2) exempt any donors who have contributed less than $50,000 in total.

Perhaps most significant of all, the definition of “Associated Entity” exempts affiliated publicly traded companies. The proposed settlement provides that an Associated Entity includes:

• “[a]ny entity owned, controlled, or operated by, or otherwise affiliated with the individuals or entities described in Sections 1(c)(a)-(d) above other than a publicly traded company.” (emphasis added)

So, publicly traded companies—and there are many across the country that support and partner with member institutions—are expressly not Associated Entities by affiliation or even control. Technically, a publicly traded company could qualify as an Associated Entity under another subpart of the definition. However, such circumstances would seem increasingly rare.

Why does this matter?
If third-party NIL is uncapped—it is—then what’s the significance of being an Associated Entity or Individual?

The proposed settlement includes a placeholder by which the membership may seek to restrict Associated Entity/Individual NIL activities to a “valid business purpose” or some type of fair market value (FMV) analysis. The settlement contemplates no such restriction applicable to third parties that are not Associated Entities/Individuals.

Recently, the NCAA published a Q&A document that’s been approved by the Court to provide to class members, which includes information on where those battle lines may be drawn and how they’ll be adjudicated. Setting aside the merits and feasibility of an FMV system/review, it would—of course—be best to permissibly sidestep it and the characterization as an Associated Entity/Individual where possible. A detailed analysis of donor support will inform on the optimal strategy for your campus.

We’ll chop up more NIL nuance—including how an institution might approach operating now, in this interim period where a still different framework applies—in future editions of Film room.

Before we leave you, here’s a quick roundup of other items:

• The NCAA convention kicked off on Tuesday. We’ll cover any emerging impactful information in future editions.
• The relevant case dockets enjoyed a relatively quiet week. We’ll continue to track and comment on noteworthy filings.