By now, you’ve seen last week’s Executive Order regarding college athletics. In this week’s Film Room, we take a deep dive into key aspects of the EO and help you forecast what to expect in the coming months.
Unpacking Key Aspects of the Executive Order
On July 24, President Trump issued an Executive Order (EO) that has wide-ranging ramifications for college athletics administration and regulation. Below, we unpack the most immediate and impactful directions in the EO, regarding (1) scholarship funding, (2) support for rulemaking and enforcement, and (3) student-athlete status.
1. Scholarship Funding
With a significant portion of athletic department budgets now earmarked for payments to student-athletes, campuses have wrestled with the challenge of maintaining funding in other areas. Some have flagged the potential detrimental impact to “non-revenue” sports, concerned that institutions might reduce support—including available scholarships—for them in order to make payments to revenue sport student-athletes.
The EO addresses this concern by directing institutions to maintain or increase scholarship opportunities in non-revenue sports, with the specific direction varying depending on the size of the athletic department. Section 2(a) of the EO provides:
- (i) collegiate athletic departments with greater than $125,000,000 in revenue during the 2024-2025 athletic season should provide more scholarship opportunities in non-revenue sports than during the 2024-2025 athletic season and should provide the maximum number of roster spots for non-revenue sports permitted under the applicable collegiate athletic rules;
- (ii) college athletic departments with greater than $50,000,000 in revenue during the 2024-2025 athletic season should provide at least as many scholarship opportunities in non-revenue sports as provided during the 2024-2025 athletic season and should provide the maximum number of roster spots for non-revenue sports permitted under the applicable collegiate athletic rules; and
- (iii) college athletic departments with $50,000,000 or less in revenue during the 2024-2025 athletic season or that do not have any revenue-generating sports should not disproportionately reduce scholarship opportunities or roster spots for sports based on the revenue that the sport generates. (Emphasis added.)
Current institutional plans for the 2025-26 academic year should be analyzed for compliance with these directions.
Section 2(d) directs the Secretary of Education, in consultation with the Attorney General, the Secretary of Health and Human Services, the Secretary of Education, and the Chairman of the Federal Trade Commission to “develop a plan to advance the policies set forth in subsections (a)-(c) of this section through all available and appropriate regulatory, enforcement, and litigation mechanisms” within 30 days of the EO.
2. Support for Rulemaking and Enforcement
The EO describes the current state of play as “an out-of-control, rudderless system in which competing university donors engage in bidding wars for the best players” and notes that “more than 30 States have passed their own NIL laws in a chaotic race to the bottom.”
Section 2(c) of the EO provides:
“To preserve the critical educational and developmental benefits of collegiate athletics for our Nation, it is the policy of the executive branch that third-party, pay-for-play payments to collegiate athletes are improper and should not be permitted by universities.”
Relatedly, Section 4, titled “Legal Protections for College Athletics from Lawsuits,” provides:
“(a) The Attorney General and the Chairman of the Federal Trade Commission shall work to stabilize and preserve college athletics through litigation, guidelines, policies, or other actions, as appropriate, by protecting the rights and interests of student-athletes and the long-term availability of collegiate athletic scholarships and opportunities when such elements are unreasonably challenged under antitrust or other legal theories.” (Emphasis added.)
These directions signal executive branch support for a rule structure that’s been under near-constant attack for years.
Section 4(b) directs the Attorney General and Chairman of the Federal Trade Commission to advance the purpose of Section 4(a) within 60 days of the EO.
3. Student-Athlete Status
Section 3 of the EO, titled “Student-Athlete Status,” provides:
“The Secretary of Labor and the National Labor Relations Board shall determine and implement the appropriate measures with respect to clarifying the status of collegiate athletes, including through guidance, rules, or other appropriate actions, that will maximize the educational benefits and opportunities provided by higher education institutions through athletics.” (Emphasis added.)
No, the EO does not declare that student-athletes are (or are not) employees. However, it directs that their status be clarified in a manner that “maximize[s] the educational benefits and opportunities provided by higher education institutions through athletics.” Potential employee status of student-athletes would substantially increase financial and other demands of institutions and their athletics departments, the economics of which would predict decreased support for non-revenue sport programs. Non-revenue sport student-athletes comprise the overwhelming majority of student-athletes across the country. As such, “maximiz[ing] the educational benefits and opportunities provided by higher education institutions through athletics” would seem incompatible with employee status.
Syncing with Other Regulatory Activity
The EO and related executive branch activity comprise just one aspect of the evolving regulatory structure in college athletics. It will be important to consider and track their interplay with both SCORE Act progress and College Sports Commission direction on policies and procedures. We’ll continue to keep you posted.
[View source.]
