In the summer of 2021, the NCAA implemented a groundbreaking policy. For the first time in the tenure of college athletics, student-athletes were permitted to earn income from their name, image, and likeness. This process of college athletes earning income has become commonly known as “NIL.” While many believed this rule was the change necessary to balance the inequities between student-athletes and the coaches and universities, NIL has had other effects and has drastically changed the landscape of college athletics.

NIL was intended to provide athletes with an opportunity to monetize their personal brands and earn income throughout college. To earn NIL funds, student-athletes can engage in various business-like activities, including social media influencing, public speaking, autograph sessions, training camps, lessons, or other promotional activities and appearances. One key aspect of NIL is that student-athletes must actively participate in one of these activities – a student’s NIL earnings cannot simply be passive income. Further, NIL is not to be used as a recruiting tool despite the relationship between these opportunities and certain colleges or universities. This means that coaches and universities are prohibited from offering NIL packages to new recruits. While they can highlight NIL opportunities and endorsements that current athletes have, outright offering a recruit or transfer student a sum of money to attend that university is disallowed and inconsistent with the very purpose of NIL. Regardless of the regulations in place, universities and athletic programs are increasingly leveraging NIL to attract high school recruits and transfer students. This practice raises ethical questions about the true purpose and function of NIL and whether it undermines the integrity of amateurism in college athletics.

In today’s world of college athletics, incoming high school students and transfer students have NIL valuations and payments dangled in front of them before committing to a university and without having participated in any sort of required business-like activity. For example, in June 2024, while welcoming football recruits to campus, the University of Texas lined the entryway to their athletic facilities with a “fleet” of Lamborghinis from a local dealership and university NIL partner. While this elaborate show of NIL wealth may not have been an explicit offer to recruits, it almost certainly straddles the line of an impermissible use of NIL in recruiting. Another example of NIL in the recruiting process comes from a recent Sports Illustrated article. It has been reported that the University of Michigan is offering a five-star football recruit upwards of $5 million to attend the university. The complete lack of oversight by governing bodies has allowed universities to use NIL as a means of enticing student-athletes with large amounts of money without ever performing a public appearance, autograph signing, etc. – and in many scenarios, long before the recruit has developed a “brand” of their own, the intended profit driver behind NIL.

In addition to NIL being used outside of its intended means, it has also radically shifted the power dynamic between coaches and student-athletes. Most recently, in September 2024, two football players from UNLV decided to sit out the remainder of the college football season after leading their team to a 3-0 start. According to the University, the players made certain demands of the University’s NIL collective. Conversely, the players alleged that the University failed to follow through on NIL commitments it made (likely impermissibly under NIL regulations) to the athletes when they were recruited to the University. This type of situation is exactly what some critics of NIL feared—universities could sell snake oil to recruits by telling them they could get rich by playing there, or athletes could make unreasonable demands on their school’s NIL funds without participating in the necessary activities. Regardless of which account is true, NIL has created a dangerous dynamic of “pay for play,” something the NCAA had intended to avoid.

One way to address this issue is for universities and collectives to establish clear, enforceable written contracts with athletes. These contracts should outline specific NIL activities required of the athlete and define payment structures that ensure both parties meet their obligations. Such agreements can reduce disputes by eliminating ambiguity and ensuring that athletes understand their commitments. Additionally, these contracts should include provisions that encourage athletes to complete at least the current season before redshirting or transferring to another program, especially in team-centric sports like football. By implementing these safeguards, universities can maintain team cohesion and ensure that NIL agreements uphold the broader goals of fairness and integrity in college athletics.

NIL funds have truly transformed college athletics into the Wild West—a perplexing mix of ethical questions and legal gray areas. The NCAA has rules in place but is yet to strictly enforce them. Moving forward, it is imperative that the NCAA, along with universities and collectives, find ways to balance opportunities for athletes to benefit from their name, image, and likeness while preserving the integrity and spirit of college athletics. Written contracts could serve as a critical tool in achieving this balance, offering transparency and accountability in an increasingly complex system.

* This post is a guest post written by our associate attorney, Luke Zielinski. Luke and I share a love of sports and entertainment law issues. At Brick Gentry, Luke offers services in areas including corporate and general business transactions, mergers and acquisitions, and real estate and municipal matters. His dedication and passion for his work allows him to help guide clients and create innovative solutions to intricate legal issues.