Last week, the College Sports Commission (CSC) issued two key announcements, one regarding the impact of new scholarships on the institutional cap and the other reiterating rules and approach to third-party NIL in light of transfer portal activity.
Earlier this week, the CSC issued an NIL deal flow report indicating, among other things, that ten deals are in arbitration.
In this week’s Film Room, we ensure you’re tracking on key aspects of these updates.
Approach to athletic scholarship overages
Last week, the CSC published a policy regarding its approach to penalizing any institutional cap overages resulting from new athletic scholarships. As a reminder, the House settlement removed prior scholarship limits for “equivalency” sports and requires that increased athletic scholarship amounts up to $2.5 million be counted against the institutional cap.
The policy indicates that, for 2025-26, “institutions that exceed the benefits cap via spending on incremental scholarships will be issued a fine of $1 for every $1 by which they exceed the cap up to $2.5M.” Additionally, any overages will count against an institution’s 2026-27 cap. See the policy and Bylaw 16.13.1.8. As noted in last week’s post, an institution must attest to the accuracy of its provision of institutional benefits on an annual basis.
Approach to third-party NIL
On January 9, the CSC published guidance reiterating certain rules relevant to its review of third-party NIL deals, including those involving school multimedia rights (MMR) partners. Among other things, the guidance stated:
- “A contract between a student-athlete and an MMR partner (or anyone else) to pay the student-athlete for their NIL is an NIL contract and must be reported, even if the MMR partner plans to find other sponsors to pay for and activate the NIL.”
- “An NIL agreement or payment with an associated entity or individual – which includes many MMR and other partners – must include direct activation of the student-athlete’s NIL rights. … Contracts in which MMR or other partners pay student-athletes for their NIL with no information about who will ultimately use that NIL will likely run afoul of this rule.”
The guidance also indicated that CSC “investigations into unreported third-party NIL deals are progressing and some schools should expect to hear from the CSC next week” and “[t]he CSC will provide additional rules reminders in the coming weeks.”
NIL deal flow report
On January 12, the CSC published an NIL deal flow report that identifies key information regarding third-party NIL deals submitted through December 31, 2025.
Notably, the report indicates that 524 deals totaling nearly $15 million (approximately $28,500/deal) have “Not Cleared” the clearinghouse. The report also indicated that ten deals were in arbitration as of December 31.
The arbitration rules and procedures for disputes with student-athletes and institutions are available on the CSC website. Both sets of procedures allow parties to seek discovery, including from third parties, in support of positions. See Sections 7(a), (c). Both also provide that the arbitrator will rule on the dispute, including by deciding whether the CSC correctly determined that applicable rules were violated, applying NCAA rules and federal law. See Sections 10(a), 11(a).
[View source.]
