Gender equity questions arise with college athletes' NIL agreements
“A lot of schools have considered bringing [third-party] NIL collectives in-house, but they may want to think again,” says Robert Boland, a professor at the Seton Hall University School of Law. (Image from Shutterstock)
Updated: On Feb. 12, the U.S. Department of Education announced it was rescinding a Biden administration fact sheet focused on gender equity regarding name, image and likeness agreements for college athletes. Frequently referred to as NIL agreements, the deals often involve private collectives, usually sports boosters, which are set up to compensate student-athletes.
One of the final publications from the Biden administration’s Department of Education, the fact sheet stated that compensation from a school for use of a student-athlete’s name, image and likeness qualifies as financial assistance under Title IX of the Education Amendments of 1972. The payments must be made available to male and female athletes in proportion to the number of students of each sex playing college sports at that school, the memo stated.
In a news release, Craig Trainor, the department’s acting assistant secretary for civil rights described the Biden administration’s DOE fact sheet as “overly burdensome” and “profoundly unfair.”
“Enacted over 50 years ago, Title IX says nothing about how revenue-generating athletics programs should allocate compensation among student athletes. The claim that Title IX forces schools and colleges to distribute student-athlete revenues proportionately based on gender equity considerations is sweeping and would require clear legal authority to support it. That does not exist,” he said in the news release.
Arthur Bryant represents 32 female athletes from the University of Oregon, who in a federal lawsuit claim the school’s athletic department engaged in gender discrimination under Title IX because of, among other things, disparities in NIL opportunities.
Bryant called the Department of Education’s decision to rescind the NIL-related fact sheet “disappointing,” but he stressed that it does not change the law in any way.
“Title IX is crystal clear in barring all gender discrimination in college athletics,” Bryant says. “Nothing about that principle has changed.”
(Photo by James Gilbert/Getty Images)Related article from the ABA Journal: Money and litigation tangle with recent rules for college athletes’ NIL deals
The plaintiffs in the Oregon case are from the university’s beach volleyball and club rowing teams. Sportico, a sports business news site, reports that the lawsuit is the first-of-its kind claiming Title IX violations based on alleged disparate NIL opportunities between male and female college athletes.
“These collectives were created like fig leaves to hide the school’s involvement with NIL payments. Let’s stop the charade,” says Bryant, who heads the Title IX practice at the Clarkson Law Firm.
According to the complaint, filed in 2023, the university provides male student-athletes with much greater name, image and likeness-related training, opportunities and income than the female student-athletes. The lawsuit claims that Oregon spent only 15% of its recruiting dollars and 25% of its athletic dollars on women, despite the fact that they make up nearly 50% of the university’s varsity athletes.
It also contends that the school directed opportunities through Division Street, an NIL collective launched in part by Phil Knight, the billionaire who co-founded Nike.
“This is no independent, separate third party. The university is intimately connected with the collective,” Bryant says.
Stephen English of Perkins Coie, Oregon’s outside counsel, declined to comment for the story. In a motion to dismiss, the university claimed that it did not directly, or even indirectly, control the allocation of NIL proceeds by third-party collectives. Oral arguments are scheduled for Feb. 26.
Robert Boland, a sports law professor at Seton Hall University School of Law who previously was an athletics integrity officer at Pennsylvania State University, sees the case as a significant development and suspects more Title IX lawsuits will be coming. Despite the Department of Education rescinding the fact sheet, Boland and Bryant both say the original guidance could remain persuasive to future courts.
“I do think it has enduring meaning, and the prior administration has rung a bell that may resonate with the judiciary charged with interpreting Title IX,” Boland says.
“Title IX is crystal clear in barring all gender discrimination in college athletics,” Arthur Bryant says. “Nothing about that principle has changed.”
NCAA settlement under the microscope
Additionally, some wonder what will happen with a tentative $2.75 billion settlement between the National Collegiate Athletic Association and the Power Five Sports Conferences in House v. NCAA. If approved, universities will be allowed to pay NIL compensation to student-athletes directly.
“It sends House back to the negotiation table,” Boland says. “There’s a challenge as to whether it’s compliant with Title IX. I would have worried about certain women’s sports being defunded with this agreement.”
Plaintiffs in the case estimated that 90% of the settlement’s $2.75 billion would go to male football and basketball players, ESPN reported, because the sports’ broadcast rights generate most of the revenue.
A hearing for the court to approve the submitted agreement is scheduled for April 7. Besides language that would allow universities to pay college athletes directly, it allows for a revenue-sharing plan that creates an annual spending cap of roughly $20.5 million, which each university could distribute directly to athletes over a 10-year period.
The Department of Justice filed a statement of interest asking the court to either reject the settlement or make clear it is problematic under antitrust law. The filing was made Jan. 17, three days before Donald Trump was sworn in as president.
It argues that the proposed agreement with its spending cap “continues to restrict the compensation college athletes may receive from their school” by extinguishing the free market. Additionally, the filing lamented that the settlement was not the subject of collective bargaining.
Neither the Department of Justice nor the Department of Education responded to the ABA Journal’s requests for comment.
“It is up to the schools to determine how to comply with Title IX in making future payments to athletes permitted by the settlement,” says Jeffrey Kessler of Winston & Strawn in New York City.
A lead plaintiff’s attorney in the case, Jeffrey Kessler of Winston & Strawn in New York City, expressed confidence that the court will approve the settlement, calling the Department of Justice’s objections “completely off the mark.”
According to Kessler, the House lawsuit is not a Title IX case and does not resolve or even address any Title IX issues. Following the fact sheet being rescinded by the agency, he notes that the department’s guidance is advisory, and not binding in court.
“With or without the guidance, the courts will have to ultimately determine how and to what extent Title IX applies to future NIL payments and similar compensation to college athletes. None of this has anything to do with the House settlement, which only resolves antitrust, not Title IX, claims,” he said in an email to the ABA Journal.
Felice Duffy, who is of counsel to New York City-based Nesenoff & Miltenberg, works with athletes on gender equity issues involving colleges and universities. Before becoming a lawyer, she was head coach of the women’s soccer team at Yale.
“Every school I’ve ever dealt with is very fearful of litigation,” she says. “I can imagine most schools won’t want to give out money until [the settlement’s] resolved, because if you give most of the payments to football players, that won’t comply with Title IX.”
Updated Feb. 12 at 2:26 p.m. to reflect the Department of Education rescinding a fact sheet and to include additional reporting.
Write a letter to the editor, share a story tip or update, or report an error.
