The Rewritten Playbook: The New Litigation And Enforcement Risks In College Sports (White Paper)

I. Introduction

The ubiquity of name, image and likeness (NIL) deals being offered to incoming and enrolled college student-athletes by schools and third-party NIL collectives in the wake of the House settlement – a landmark $2.8 billion legal agreement allowing Division I schools to pay athletes directly and ending longstanding NCAA restrictions on student-athlete compensation – has given rise to significant debate over the question of whether college student-athletes should be considered employees of the school for which they play. Regardless of how courts ultimately answer that question, colleges, athletes, and third party NIL collectives will, in the absence of legislative action, face many of the same litigation and enforcement risks that exist in the context of employer-employee relationships. Most notably, universities will have to consider: (1) litigation risks that arise when an athlete transfers to a competing school in breach of his/her NIL contract, often with the involvement of the transferee school or other third parties; (2) enforcement risks arising from federal and state-law prohibitions on contractual provisions in NIL agreements that restrict the ability of the ‘employee’ (here, the student-athlete) to transfer to another college; and (3) enforcement risks arising from agreements or implicit understandings, between or among universities (most likely through their athletic departments) to refrain from recruiting student-athletes away from each other’s programs. These new risks are ones that universities and their athletic departments and third-party collectives are well advised to address early from a compliance standpoint.

This white paper is organized in three parts. Section I summarizes the NCAA rules (Rules) governing the recruitment of student-athletes and their transfers from one school to another; how those Rules have changed in the wake of the House settlement; and the types of restrictions being placed on student-athletes’ ability to transfer via NIL contracts. Section II addresses the litigation and enforcement risks posed by these restrictions. Finally, Section III offers recommendations to institutions of higher education (IHEs), third-party collectives, and student-athletes for minimizing these risks.

II. The Rules Governing Student-Athlete Compensation and Transfer 

Historically, the NCAA prohibited universities from compensating student-athletes beyond tuition and fees, room and board, books, and other expenses related to attendance. The Supreme Court’s 2021 ruling in NCAA v. Alston, and the House settlement that followed, radically changed that landscape. This section addresses the historical rules regarding student-athlete compensation and details the current state of student-athletes’ ability to transfer universities and receive compensation.

The Rules Pre-House

1. Student-Athlete Compensation

Prior to 2021, the NCAA enforced a strict amateurism rule that limited student-athlete compensation to the cost of attendance.¹ Student-athletes could not receive benefits unrelated to education and could not even receive certain benefits tied to education, such as “post-eligibility scholarships to complete undergraduate or graduate degrees at any school; scholarships to attend vocational school; expenses for pre- and post-eligibility tutoring; expenses related to studying abroad that are not covered by the cost of attendance; and paid post-eligibility internships.”² Student-athletes were prohibited from receiving “computers, science equipment, musical instruments and other items not currently included in the cost of attendance calculation but nonetheless related to the pursuit of various academic studies.”³

In 2021, however, the Supreme Court unanimously held in NCAA v. Alston that the NCAA’s proscriptions against colleges providing any benefits to student-athletes beyond tuition and fees, room and board, books, and other expenses related to attendance violated the Sherman Act.⁴ This ruling effectively marked the end of amateurism in college sports, allowing student-athletes to ink third-party endorsements by licensing their name, image, and likeness⁵ or to receive compensation from booster-led organizations in exchange for charitable appearances or endorsements.⁶ While Alston invalidated restrictions on education-related benefits, the ruling did not address direct compensation to athletes by universities. Accordingly, following Alston, the NCAA implemented interim rules allowing student-athletes to earn money by licensing their NIL with third parties while further litigation invited by the Alston ruling ensued.⁷

2. Student-Athlete Transfers

Historically, the NCAA restricted athletes even from contacting coaches at other universities about the possibility of transferring absent permission from their team’s coach (the “permission-to-contact” model).⁸ The rule also restricted coaches from contacting athletes. If permission was denied, student-athletes could appeal to members of the campus administration, and those who did not receive permission could still transfer but could not

Footnotes

1. See In re NCAA Athletic Grant-in-Aid Cap Antitrust Litig., 375 F. Supp. 3d 1058, 1071 (N.D. Cal. 2019).

2. In re NCAA Athletic Grant-in-Aid Cap Antitrust Litig., 375 F. Supp. 3d 1058, 1088 (N.D. Cal. 2019).

3. Id.

4. NCAA v. Alston, 594 US 69, 102-07 (2021).

5. Alex Semancik, NIL creates opportunity for student-athletes, confusion and tough decisions for schools and NCAA, Ohio Today (Apr. 8, 2026), https://www.ohio.edu/news/2026/04/nil-creates-opportunity-student-athletes confusion-tough-decisions-schools-ncaa.

6. Name, Image, and Likeness (NIL) Collectives, IRS, https://www.taxpayeradvocate.irs.gov/get-help/general/nil/nil collectives/ (last updated June 8, 2026).

7. See, e.g., In re College Athlete NIL Litig., No. 4:20-cv-03919-CW (N.D. Cal.); Fontenot v. Nat’l Collegiate Athletic Ass’n, No. 1:23-cv-03076 (D. Colo.); Johnson v. Nat’l Collegiate Athletic Ass’n, 108 F.4th 163 (3d Cir. 2024); see also, NCAA, Interim Name, Image and Likeness Policy Guidance Regarding Third Party Involvement (Jul. 1, 2021), https://ncaaorg.s3.amazonaws.com/ncaa/NIL/May2022NIL_Guidance.pdf.

8. Tom VanHaaren, NCAA Reform Eases Rules on Athlete Transfers, ESPN (June 13, 2018), https://www.espn.com/college-sports/story/_/id/23782893/ncaa-passes-reform-allows-athletes-transfer-permission. 

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