Attorneys have made alterations to a $2.78 billion deal that would bring significant changes to college sports, removing the term “booster” from the extensive plan in hopes of addressing a judge’s concerns about the groundbreaking settlement aimed at compensating players for their contributions to generating revenue. The modifications filed in court did not entail a complete overhaul but focused on replacing “booster” with the term “associated entity or individual” in an effort to clarify which types of agreements would be subject to scrutiny under the new regulations.
The adjusted language aims to provide more detailed guidelines regarding the types of deals that will be examined under the settlement. Under the terms of the agreement, significant schools would have access to a pool of approximately $21.5 million in the initial year to allocate to athletes through a revenue-sharing initiative, allowing athletes to engage in name, image, and likeness agreements with external entities.
The concerns raised by Judge Claudia Wilken regarding oversight of these deals were a central issue in the proposed settlement. Many figures in collegiate sports believe that categorizing certain contracts as NIL deals may obscure the reality that some agreements involve boosters compensating athletes to play, which is prohibited. The revised agreement seeks to address this issue by substituting “booster” with “associated entity” and clearly defining these entities.
The NCAA expressed that the updated language aims to offer clarity and transparency to individuals looking to propose or accept NIL deals. The new filing elaborated that “associated entity or individual” is a more focused category with clear definitions that exclude certain third parties, such as small-money donors and neutral arbitrators will oversee deals involving these entities.
Plaintiffs’ attorney Steve Berman highlighted how the settlement, along with the new language, limits the NCAA’s oversight over NIL deals, emphasizing that the changes represent a significant advancement over the current restrictions imposed by NCAA rules. The adjustments also ensure that most third-party NIL deals will remain accessible to college athletes, who will additionally benefit from billions in annual revenue through the revenue-sharing system.
The emergence of unregulated third-party deals facilitated by booster-funded organizations known as NIL collectives has raised concerns among college sports authorities, who fear that schools could evade imposed limitations. NIL collectives have become a primary means for college athletes to capitalize on their popularity, with a substantial portion of the $1.17 billion spent on NIL deals last year originating from these entities according to Opendorse.
While Judge Wilken expressed reservations about the initial cap of $21.5 million and the proposal to subject certain NIL deals to external reviews for fair-market valuation, the recent adjustments seek to address these concerns and enhance the clarity and fairness of the settlement terms. There is no specified timeframe for Judge Wilken to evaluate whether the modifications will be satisfactory for final approval of the deal.