Universities Don't Have to Disclose NIL Data - The Potential Impacts for Student-Athletes
Updated: Nov 8, 2022
In 2022, Nick Saban, the head football coach at the University of Alabama, will make $10.7 million. Similarly, Jimbo Fisher, the head football coach at Texas A&M, signed a contract extension that will earn him approximately $9 million this year. Saban and Fisher’s salaries are discoverable with little more than a few clicks in a Google search bar, but finding out exactly how much their players are making through name, image, and likeness deals is next-to impossible.
In June of 2021, the Supreme Court decided Alston v. NCAA, holding that the NCAA’s rules limiting education-related compensation violated the Sherman Antitrust Act. Following the Court’s ruling, the NCAA changed its policies to allow student athletes to receive compensation for the use of their name, image, and likeness (NIL), an acronym that has become common vernacular in the world of college sports today. Many onlookers and college sports enthusiast anticipated that the Alston decision would allow athletes to receive compensation for jersey sales and the use of their likeness in video games, but what has unfolded is far beyond the original expectations.
The NIL space has rapidly expanded into athletes signing contracts with major companies like Gatorade, expensive car deals, and the creation of “collectives” that raise millions of dollars to essentially recruit the top high-school athletes to specific universities. More money is flowing through NIL deals than any expert could have predicted when Alston was decided over a year ago, but just how much money is largely unknown. In an attempt to provide greater transparency in NIL, the NCAA Division I council pushed for mandatory disclosure of all agreements between student-athletes and the other parties in the NIL deals.
The Division I Council initially proposed, in October of 2020, to have a third-party administration oversee NIL disclosures. More specifically, the NCAA proposed pre-enrollment NIL rules that would require a prospect to report all NIL activity to a third-party administrator, and there would be separate disclosure requirements for commercial endorsements and business activities. Further, under this proposed policy, current student-athletes would also have to disclose information related to their relationships with individuals or entities, and their business activities, ahead of any arrangements for NIL deals. If the NIL agreement involved promotions or advertising for a third-party company, the student-athlete would have to disclose both the compensation arrangements as well as the relationship with the individual or commercial entity.
The NCAA also created a template disclosure form that student-athletes engaged in NIL promotional activities would have to fill out, and schools would be able to customize this form based on their needs and state laws. Overall, the NCAA’s goal of third-party disclosure was to ensure that student-athletes are in compliance with federal, state, and NCAA rules, to assist student-athletes so they don’t run into legal issues with any of their transactions, and to confirm that student-athletes remaining in compliance with tax obligations.
Despite these lofty goals of NIL disclosure, none of the regulations were formally adopted. The lack of disclosure regulations came to light in a recent report, where ESPN requested for 23 universities to release their NIL data. In this survey, a majority of schools provided little to no records. However, most notably, Nick Saban’s Alabama declined to release any data, and Jimbo Fisher’s Texas A&M claimed it had hundreds of documents to send over, but ultimately failed to produce any. Because there is largely no way for the NCAA (or other entities like ESPN) to force schools to hand over NIL data, and many schools are hesitant to voluntarily provide this information, “the only way to get any kind of picture of what’s happening the the marketplace is by cobbling together incomplete and unverified figures from public statements…”
The unclear picture of just how much money is flowing through NIL deals may harm student-athletes. More specifically, the lack of transparency could ultimately make it difficult for athletes to determine what they are worth in the NIL marketplace, and what potential deals would be best for them to pursue. Without clear aggregated figures from the NIL marketplace, it is difficult for athletes to assess whether the deals they are offered are fair. Any available data that is released from outside companies is not necessarily reliable or independently verified.
Moreover, female athletes who are just as hard-working and dedicated to their sports as their male counterparts may not get paid through NIL deals, raising Title IX concerns. If universities don’t proactively put adequate structures in place to monitor the disparities between male and female athlete NIL deals, it is likely that greater inequalities will emerge. Although NIL is essentially insulated from Title IX because the deals are not coming from the universities, the U.S. Department of Education proposed including NIL deals as part of the information schools must report to the federal government to ameliorate possible Title IX issues, but no set mandate has been put in place yet.
It is now up to member schools to propose and vote on regulatory changes to increase transparency. However, many schools are resistant to disclosure, citing the Family Educational Rights and Privacy Act (FERPA), as well as state laws put in place to specifically protect against NIL disclosure. Most notably, Louisiana recently sponsored a bill making NIL information “confidential and not subject to inspection, examination, copying or reproduction pursuant to the Public Records Law,” and many other states are following in its footsteps.
Although understandable that schools want to protect their student-athletes’ privacy when it comes to NIL deals, schools and conferences should place a focus on aggregating their student athletes’ NIL data without releasing individual names. NIL marketplaces such as INFLCR and Opendorse, which allow student athletes to build and monetize their NIL in an online platform, produce reports of aggregate data without releasing specific information of individual athletes, but this data is not completely reliable. In turn, if schools, or conferences as a whole, took the same approach, and hopefully with greater reliability and independent verification, athletes would be better informed when presented with NIL opportunities, and less likely to harm their professional and/or financial futures.
Header photo credit: https://www.dispatch.com/story/sports/2022/05/22/letters-editor-nick-saban-jimbo-fisher-feud-columbus-nil-contracts/9856407002/  Aaron Suttles, Alabama approves Nick Saban contract making him highest-paid coach in football, The Athletic (23 Aug. 2022) https://theathletic.com/3531391/2022/08/23/nick-saban-alabama-contract-salary/#:~:text=Saban's%202022%20salary%20will%20be,to%20%2412.7%20million%20in%202029.  Sam Khan Jr., Texas A&M, Jimbo Fisher agree to 4-year extension through 2031 and raise, The Athletic (1 Sept. 2021) https://theathletic.com/news/texas-am-jimbo-agree-to-4-year-extension-through-2031-and-raise/YuGgNZX2fRNC/  NCAA v. Alston, 141 S.Ct. 2141 (2020)  Anna Bullock, One Year of Collegiate Athletics Following NCAA v. Alston, JDSUPRA (6 Jul. 2022) https://www.jdsupra.com/legalnews/one-year-of-collegiate-athletics-2970463/#:~:text=After%20Alston%2C%20the%20NCAA's%20interim,their%20educational%20institution%20is%20located.  Richard Johnson, Year 1 of NIL Brought Curveballs, Collectives and Chaos. Now What?, Sports Illustrated (12 Jul. 2022). https://www.si.com/college/2022/07/12/nil-name-image-likeness-collectives-one-year  Kristi Dosh, Gatorade’s First NIL Deal is With Paige Bueckers, Business of College Sports (29 Nov. 2021) https://businessofcollegesports.com/name-image-likeness/gatorades-first-nil-deal-is-with-paige-bueckers/  Kristi Dosh, Tracking Student Athlete Car Deals in the NIL Era, Business of College Sports (3 Sept. 2021). https://businessofcollegesports.com/name-image-likeness/tracking-student-athlete-car-deals-in-the-nil-era/  On3 Staff Report, On3’s top 20 most ambitious NIL collectives, On3 (4 Aug. 2022)  Daniel Libit, ‘Damn if I Know’: College Athlete Pay Rules Clouded by Disclosure Limits, Sportico (2 Jun. 2021) https://www.sportico.com/leagues/college-sports/2021/ncaa-nil-disclosure-debate-1234631006/  Id.; Media Center, DI Council introduces name, image and likeness concepts into legislative cycle, NCAA (24 Oct. 2020).  Collegiate Coaching Diversity Pledge, The Oversight and Monitoring of NIL, Athletic Director U (Accessed on 27 Oct. 2022) https://athleticdirectoru.com/sanil/the-oversight-and-monitoring-of-nil/  Id.  Id.  Id.  Id.  Paul Lavigne and Dan Murphy, Alabama Crimson Tide among schools not to disclose NIL data, ESPN (7 Oct. 2022) https://www.espn.com/college-football/story/_/id/34739678/following-nick-saban-jimbo-fisher-nil-spat-schools-answer-call-transparency  Id.  Id.  Andy Wittry, State, federal laws protect NIL deals amid calls for transparency, On3 (19 Jul. 2022)  Id.  Lavigne and Murphy, supra.  Id.  Id.  Id.  Libit, supra.  Lavigne and Murphy, supra.  Id.