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Navigating Title IX: How New Federal Guidance Impacts NIL Compensation for College Athletes

Posted by Paul Saluja | Jan 17, 2025

The Department of Education's Office for Civil Rights (OCR) has issued pivotal guidance clarifying how Name, Image, and Likeness (NIL) compensation intersects with Title IX compliance. This announcement introduces significant questions for colleges as they adapt to an evolving landscape in collegiate athletics.

The Core Issue: NIL as Athletic Financial Assistance

The OCR's nine-page memo categorizes NIL compensation facilitated by schools as “athletic financial assistance” under Title IX. This classification aligns NIL payments with scholarships and grants, mandating that such financial support be distributed proportionally between male and female athletes. Schools must ensure compliance with Title IX's long-standing principles, which require:

  • Financial assistance to reflect the gender distribution of student-athletes on campus.

  • Equal opportunities for participation in varsity sports regardless of gender.

This clarification is poised to challenge schools' plans to directly compensate athletes through revenue-sharing arrangements, especially when funds disproportionately benefit male-dominated sports like football and men's basketball.

Revenue-Sharing and Title IX Challenges

Under a proposed settlement in the landmark House v. NCAA case, universities could distribute an estimated $20.5 million annually to athletes through a revenue-sharing model. However, many institutions have indicated that these funds would predominantly go to football and men's basketball players. The OCR's memo warns that such allocations would likely violate Title IX unless balanced by equivalent compensation for female athletes.

Third-Party NIL Collectives: A Gray Area

The guidance also addresses third-party NIL collectives that operate independently but maintain close ties to schools. While payments from these entities are not classified as “financial assistance,” the OCR noted that disparities stemming from these agreements could trigger Title IX obligations if they result in unequal treatment of male and female athletes.

Implications for Colleges and Athletic Programs

This guidance arrives amid a period of rapid change in college sports. Leaders like Linda Livingstone, NCAA Board Chair and Baylor University President, and Illinois Athletic Director Josh Whitman have acknowledged the complexities of Title IX compliance in the NIL era. Schools must now reassess strategies to ensure equitable distribution of resources while complying with federal law.

Legal and Policy Repercussions

The new guidance strengthens the arguments of ongoing Title IX lawsuits, such as the case against the University of Oregon brought by over two dozen female athletes. Plaintiffs' attorney Arthur Bryant asserts that the OCR's memo validates their claims, casting doubt on the proposed settlement in House v. NCAA.

Meanwhile, experts like David Ridpath of the Drake Group emphasize that the guidance is consistent with existing law. According to Ridpath, “There was always a question of how Title IX applies to NIL. Now there is just more guidance. It's essentially just following the law virtually the way it's always been written.”

What's Next for Schools?

With the potential for significant federal oversight and private litigation, institutions must proactively:

  • Audit existing NIL policies and revenue-sharing plans.

  • Develop strategies to ensure proportional financial assistance.

  • Foster transparency in NIL agreements involving third parties.

Conclusion

As NIL continues to reshape collegiate athletics, compliance with Title IX remains a critical priority for colleges. The OCR's guidance underscores the importance of equity in financial assistance and the need for schools to adapt to a rapidly changing environment. Saluja Law is closely monitoring these developments and stands ready to assist institutions and athletes in navigating these complex issues.

For more insights, contact Saluja Law or visit our website.

About the Author

Paul Saluja

Paul Saluja is a distinguished legal professional with over two decades of experience serving clients across a spectrum of legal domains. Graduating from West Virginia State University in 1988 with a bachelor's degree in chemistry, he continued his academic journey at Ohio Northern University, gr...

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