Department of Education States NIL Pay for NCAA Athletes Falls Under Title IX

The U.S. Department of Education’s Office for Civil Rights (OCR) has issued new guidance clarifying that NIL opportunities and direct payments from colleges to student-athletes for their name, image and likeness (NIL) must comply with Title IX regulation. While on the surface this could be considered good news for female student-athletes, it introduces a slew of fiscal and legal challenges for collegiate athletics departments nationwide.

Breaking Down the Guidance

The OCR’s guidance includes the following main components:

• Direct payments to student-athletes must comply with Title IX. Schools must make sure NIL compensation is distributed in a way that doesn’t lead to gender-based discrimination.
• All financial assistance, including NIL payments, must be proportionately available to male and female athletes.
• Revenue-sharing arrangements (such as distributing proceeds from media deals) might also be required to comply with Title IX.
• Third-party NIL agreements could also fall under Title IX, meaning that schools might also need to ensure these opportunities are distributed equitably.

Bringing More Challenges

A major concern among athletics departments is ambiguity over what “proportionately available” means. The guidance doesn’t give any clear definition of this term, making it difficult to determine exactly what levels of distribution are acceptable. So even good-faith efforts could mean institutions would be out of compliance.

There’s also the issue of balancing NIL values with compliance. NIL compensation is driven largely by market forces, with individual athletes’ earning potential varying significantly based on their sport, performance and popularity. Title IX compliance could interfere with the free-market principles at the core of NIL deals. This is especially the case when male-dominated sports like football and basketball generate much larger NIL opportunities compared to other sports.

The possible coverage of revenue-sharing plans and third-party NIL agreements in this guidance is also a pain point. While the OCR doesn’t specifically say these agreements must comply, it’s strongly implied. This will have a huge impact, complicating an already complex environment given .

The Legal Perspective

Not surprisingly, legal experts are concerned about this new guidance. Jay Ezelle, an attorney and partner at Starnes Davis Florie LLP, advises conferences, universities and collectives on NIL, Title IX and other collegiate athletics matters.

“This guidance from the current administration isn’t entirely surprising, especially given prior statements from (Assistant Secretary of Education for Civil Rights) Catherine Lhamon previewing her stance,” said Ezelle. “However, given the recent Supreme Court ruling in Loper Bright Enterprises v. Raimondo, courts deciding this issue will not give any deference to this opinion. In fact, I think it could ultimately be used to argue against Title IX application as it is a thinly reasoned and poorly supported opinion.”

Brian Socolow, attorney, co-chair and co-founder of Loeb & Loeb’ Sports practice, also weighed in. “While the recent Fact Sheet provides guidance, it lacks the force of law and could be ignored or redefined by courts or a new Department of Education,” he said.

What We’re Hearing

In speaking with some of the collegiate athletics leadership community, we’re finding common concerns related to the guidance:

• “We are anticipating that this guidance will evolve quickly once the transition to a new administration happens. If this sticks, we have a brand new playbook to write, but we’re not writing that playbook yet.”
• “How can universities be held accountable to controlling third party collectives that they have no control over?”
• “Do schools start opting out of the (House) settlement now?”
• “If we attempt to follow this guidance, we anticipate significant lawsuits from athletes in the major revenue generating sports.”
• “Who sues the Department of Education? The athletes who are losing out on the revenue they generated?”
• “Will the schools or athletes try to block the settlement?”
• “How will the Department of Education monitor (third-party NIL)? Create another reporting requirement?”

Potential Implications

If this opinion remains in force, revenue-sharing plans in high-revenue sports like football and men’s basketball could face major restructuring to comply with Title IX requirements under this guidance. Institutions will need to make sure financial distributions do not disproportionately these athletes, which potentially limits the amounts available for their sports. This could discourage schools from pursuing revenue-sharing models altogether, hindering opportunities for athletes to benefit from lucrative media rights deals.

Finally, collegiate athletic departments might need to overhaul their financial and operational strategies to meet Title IX compliance in the NIL era. This could involve increased legal oversight, policy development and administrative tracking. Reevaluating sponsorship and partnership deals to ensure they align with equity standards could also be on the table.

Your Next Steps

First and foremost: Don’t panic or act rashly. More information could be available in the near future that clarifies this guidance. The legal process will also play out as this opinion is challenged.

There’s also a new presidential administration coming in next week. This could mean changing the guidance or even rescinding it altogether, with Sen. Ted Cruz releasing a statement suggesting this would indeed happen.

“For now, schools should observe and study the situation,” said Ezelle. “There’s no immediate need to panic or overhaul plans if they’ve been thoughtfully developed, as this will continue to unfold in the courts.”

Adds Socolow, “With a new administration starting soon, future guidance could significantly differ, potentially excluding NIL payments and broadcasting revenue from Title IX’s scope as intellectual property compensation. Congressional action may also clarify this, reshaping NIL frameworks and potentially revamping how universities handle athlete payments altogether.”

At this point, we recommend your institution monitor this situation closely in the coming weeks and wait for clarifications via the legal process and other avenues. Consulting with our Collegiate Athletics Services and NIL Advisory Services teams is also a smart move; we’re tracking this closely as more information comes in.

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