The College Sports Commission (CSC), the new regulatory body overseeing Name, Image, and Likeness (NIL) deals, recently announced that it will no longer allow agreements between athletes and donor-backed collectives unless those deals serve a "valid business purpose." In simple terms, NIL arrangements must now involve legitimate businesses that offer goods or services to the general public for profit, not just organizations created to funnel money to athletes or their schools.
This shift comes in the wake of the $2.8 billion House settlement, which now permits schools to directly pay athletes starting July 1. As a result, many collectives, such as those affiliated with prominent universities like Colorado, Alabama, Notre Dame, and Georgia, have already announced their closure. In their place, some schools are partnering with established media and technology companies, such as Learfield, to facilitate NIL deals that align with the new regulatory environment, which emphasizes direct institutional payments and legitimate third-party endorsements.
Understanding what qualifies as a “valid business purpose” is essential in navigating this new landscape. The CSC has clarified that deals focused solely on fundraising, such as charging admission for athlete appearances or selling merchandise to generate payments, do not meet the criteria. Instead, approved NIL deals must promote a genuine commercial offering, such as a golf course leveraging an athlete's image in advertising or an apparel company partnering on a co-branded product line.
While collectives may no longer directly pay athletes through fundraising activities, they can still play a valuable role. Many are shifting toward serving as marketing agencies, helping connect student-athletes with businesses that have a clear and independent commercial purpose for using their name, image, and likeness. All deals valued at $600 or more will now be vetted by NIL Go, the CSC’s official clearinghouse.
As NIL rules continue to evolve, consulting with an attorney experienced in NIL contracts is essential to protect your rights and best interests.
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