NCAA D-1 New NIL Recruiting Guidelines

    May 09, 2022, 08:00 AM

    Ever since the NCAA removed the restriction on student-athletes receiving compensation and the dawn of the NIL-era, collegiate athletic programs and administrators have been desperate for some sort of clarity as to how these deals might affect recruitment, and what the NCAA would do to regulate the use of NIL deals as a recruiting tactic for high school athletes and transfer students.

    Initially, the NIL market was largely comprised of marketing deals made between outside businesses and athletes often based on their name recognition, image, and social media following. However, as the NIL market expanded and became more competitive, the lack of guidance created an opportunity for businesses more closely associated to universities to make similar deals with the implied intent of recruiting an athlete to a particular program.

    Prior to the NIL boom, the NCAA established clear guidelines on fair recruitment practices. Until recently, these guidelines had yet to be updated to account for the novelty of seemingly overnight booster-created companies (“Booster Collectives”) designed to provide athletes and prospective recruits at a particular school with endorsement deals. The NCAA defines a booster as “ any third-party entity that promotes an athletics program, assists with recruiting or assists with providing benefits to recruits, enrolled student-athletes or their family members.” Accordingly, “the definition could include ‘collectives’ set up to funnel name, image and likeness deals to prospective student-athletes or enrolled student-athletes who might be considering transferring.”  While these Booster Collectives are not always readily apparent, their ownership, proximity to the university, and generously targeted NIL offerings make them more easily identifiable.  Booster Collectives have emerged at a number of notable collegiate programs including Clemson University, Florida State University, University of Miami, University of Texas, and many more

     The recent guidance from the NCAA Division I Board of Directors clarifies that boosters, “including recently created companies designed to provide athletes at a particular school with endorsement deals- should not have any contact with prospective college athletes, their family members or other representatives.” First, it is worth noting that Booster Collective endorsements are still permissible, so long as they are not used as a means of recruitment. Second, the guidance is effective immediately, but the new guidelines also incorporate a retroactive, case-by-case review of potential violations of these new rules that took place prior to May 9, 2022.  However, retroactive enforcement seems unlikely unless there was a particularly egregious violation.

    The NCAA’s guidance is a significant first step towards establishing fair recruitment practices in the NIL-era of collegiate sports, but it comes with the apparent risk of litigation as multiple states have laws that prohibit the NCAA from punishing students for accepting money from third parties. The leading litigation theory in these states is that any NCAA limitations on an athlete’s ability to receive endorsements could violate federal antitrust laws. The NCAA is now left to weigh the cost of this potential litigation against what could be a dramatic shift in the structure and procedures of Division I collegiate sports.