NIL Collectives Are Back In The Game Like They Never Left, As House Settlement Lawyers Reach Agreement

It only took a month of wrangling over rules related to the House settlement and how NIL collectives could stay involved in paying college athletes before we had one side give in to the other over compensation guidelines. 

There have been threats of lawsuits looming over the newly formed College Sports Commission related to their guidelines on how players could be compensated under the new clearinghouse guidelines, which are also known as ‘NILGo’. 

In the aftermath of the Huse settlement approval, the CSC issued rules pertaining to how NIL collectives would be classified, stating that they would not be offering deals that served a valid business purpose. It was at that moment that NIL collectives started fighting back against the rules that would not allow them to offer deals to athletes that would have them making appearances or holding autograph-type events that would be classified as an actual promotional type of work. 

On Thursday, the CSC released new guidelines pertaining to collectives being involved in paying athletes, though the deals will still have to go through the clearinghouse to be approved. 

College Sports Commission CEO Bryan Seeley released a statement following the new guidelines being enacted. 

"The College Sports Commission will enforce the settlement as written. Pay-for-play will not be permitted, and every NIL deal done with a student-athlete must be a legitimate NIL deal, not pay-for-play in disguise."

Simply put, NIL collectives were being pushed to the side and out the door, which was certainly going to lead to lawsuits being filed. How was the CSC going to determine what type of events athletes could take part in for payment? 

They couldn’t, which led to all sides reconvening at the table to hammer out new rules and guidelines that would give collectives the ability to continue paying athletes for their services. Over the last few weeks, the arguing over what was right, or legal, led to plenty of opinions, but it was obvious that this was not going to stick. 

The collectives were not just going to stand by, and, if we're being honest, neither were the folks pulling strings behind the scenes that allowed athletes to make additional revenue that would not count towards the new revenue-sharing cap that was put into place. 

Moving forward, the CSC would reportedly treat collectives just like they would any other business entity that is looking to hire an athlete for promotional work. While the deals that are reached with athletes will still have to go through the NILGo clearinghouse and prove that any type of financial agreements offered are of ‘fair market value’, this has reopened the door for players to make a substantial amount of money, just as they were before the House settlement. 

NIL Collectives Never Really Went Anywhere; They Just Took A Quick Break

The only difference to where we are at as of today is that these deals will have to pass a more stringent smell test. Paying athletes under the guise of ‘NIL’, while having them appear for a few ‘events’ that would have occurred in the previous era, is no longer going to be an easy route that collectives can take to show that the agreement was fulfilled. 

There have been plenty of deals in the past where an athlete would make a substantial amount of money for appearances or promotional work, only for them to show up and take a few pictures, which would then satisfy an agreement. 

One collective representative simplified the situation for OutKick readers on Tuesday night. 

"I think there will be more eyes on the deals that are signed. The star running back will not be able to show up at the local Habitat for Humanity event, hammer a few nails, take a few pictures and think that the majority of our deal has been completed. But, there will be plenty of others who try to push the limits on what is acceptable under the new enforcement arm of college athletics."

Whether you want to call it ‘pay for play,' with a side of work, is up to you. 

Over the past month, there have been numerous schools waiting for further guidance on this matter, which has led to them losing out on recruits due to them wanting to know what type of rules to follow without getting caught up in some ordeal that could come back to hurt them. 

Now, it will be full-speed ahead once new guidelines are issued, if they are changed, knowing that collectives can afford schools the opportunity to procure deals for athletes that would not count towards the cap. Think of it as subcontractor work that will go straight into the pocket of the athletes. 

Welcome back to the game, collectives. I know plenty of schools are happy to have you back on the field.