Nebraska Football Players Challenge NIL Deal Denials In Landmark Arbitration Case With College Commission

Members of the Nebraska Cornhuskers football team are preparing to fight for their right to cash-in through NIL deals that the College Sports Commission have deemed ineligible. 

We have waited to see when the new NIL-Go entity, that either approves or denies deals submitted through the clearinghouse, will be challenged when it comes to not approving an NIL agreement. 

Now, we have our first case that could set a standard for future arbitration within the guidelines for future arguments. 

On Tuesday, the CSC announced they had cleared 21,025 deals since the inception of NIL-Go, worth $166.50 million. There have also been 711 deals that have been reviewed and denied, worth a total of $29.30 million. 

Of the agreements submitted for approval across college campuses, 18 of those deals have gone to arbitration. And now, we know that Nebraska football players were the sole focus of those 18 deals that have now been consolidated into a single case. 

At the center of the argument, which was first reported by Ross Dellenger of Yahoo Sports, are deals that were established under multimedia rights, OutKick has confirmed. 

The CSC first reached out to Nebraska officials on January 15 to inform the school that other deals submitted were being investigated. Now, nearly two months later, we are seeing a battle brewing that pertains to numerous players fighting over the denial of deals tied to a third-party entity outside the rev-share allotment. 

This entails Nebraska's rights partner, Playfly, purchasing the rights to an athlete's name, image and likeness for use in the future. This could entail advertisements, television opportunities, or even deals with endorsement companies. 

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We have seen a massive push over the last few years from schools' multimedia rights partners striking deals with athletes to secure their marketing or commercial rights. The CSC's argument is that this type of deal does not contain any type of immediate deliverable, which is essentially the entity saying that there is not an immediate event that an athlete is participating in to justify the deal. 

And, since every school is operating under the revenue-share cap, these third-party deals are seen as a way for schools to circumvent that agreed-upon cap. So, if a school is going to allot $2 million for the star quarterback, the third-party entity could sign the player to an outside deal for an additional $2 million to increase their overall revenue from the ‘school.’

Why there isn't already a rule or mechanism in place to prevent this clear and intentional end-around the cap is a burning question that needs to be addressed. A worthy solution could prevent many cases from even reaching the under-staffed and overwhelmed CSC in the first place. 

Cornhuskers Are Going To Fight For Their NIL Compensation, With Massive Implications

As for the Nebraska athletes, they will now go in front of a neutral arbitrator, who is assigned the case once it is brought forth by the players when a deal is rejected, and subsequently argued against.

If both sides cannot come to an agreement through the arbitrator, then each side will be allowed to argue their case with attorneys. 

This part is where the entire ordeal can set a precedent for the future. If the College Sports Commission wins, each athlete must reimburse an already paid financial figure, or the deal in question must be rejected by the player. 

But, if the arbitrator sides with the football players, they will keep their deal, or the money already given by the third-party entity. 

But, remember how certain states have passed laws that protect the NIL rights of athletes? Well, you can count Nebraska as one of those that is looking out for their players enrolled at state universities. 

This part of the whole ordeal was pointed out by attorney Darren Heitner, who noted that since the State of Nebraska has already passed a law protecting the NIL earnings of athletes, the College Sports Commissioner finds itself in a very tricky spot. 

If the CSC were to win in arbitration, it has immediately violated a state law, which emphasizes that athletes cannot be penalized for their NIL earnings. So, we are about to find out just how hard the CSC wants to push this, if it was to win. 

Either way, this will be a landmark arbitration for college athletics, as the athletes fight for their NIL compensation against an entity (CSC) that has yet to have a formalized rule agreement signed by universities participating in the House Settlement. 

Or, as we like to call it now in college athletics: Just another day of litigation.