The college layer.

On July 1, 2021, the NCAA adopted an interim NIL policy permitting all college athletes across Divisions I, II, and III to monetize their name, image, and likeness through third-party endorsements, social media content, personal appearances, lessons, autograph signings, and more. This change came after years of legal pressure, culminating in the Supreme Court's unanimous June 2021 ruling in NCAA v. Alston, which held that certain NCAA compensation limits violated antitrust law.

The interim policy deferred heavily to state law where state laws existed, and to institutional and conference policies where they did not. This created a patchwork of rules that has since been largely replaced by the House Settlement's revenue sharing framework.

Starting with the 2025–26 academic year, Division I institutions may directly pay athletes from their own athletic revenues — a first in NCAA history. The framework is as follows:

• •Annual per-school cap begins at approximately $20–22 million
• •Cap increases ~4% per year, recalculated every three years
• •Schools are not required to share revenue — it is permissive
• •Distributions are contractual arrangements, not employment
• •Most schools will focus revenue sharing on football and basketball but are free to allocate across sports

This is separate from third-party NIL deals. Athletes can simultaneously receive direct school payments and earn independently through brand deals and personal appearances.

College athletes may earn compensation from a wide range of NIL activities, including:

• •Social media sponsorships and brand partnerships on Instagram, TikTok, YouTube, X, etc.
• •Personal appearances, autograph signings, and meet-and-greets
• •Youth camps and clinics (instruction-for-pay)
• •Podcast, media, and broadcasting appearances
• •Merchandise and licensed products featuring the athlete's name, number, or likeness
• •Group licensing agreements organized through the school or collective
• •Entrepreneurial ventures and business ownership
• •Acting, modeling, and entertainment work

Athletes cannot receive "pay for play" — compensation directly tied to athletic participation or in-game performance. NIL deals must be for legitimate business purposes.

Despite the opening of NIL, several restrictions remain:

• •No pay-for-play: compensation cannot be conditioned on athletic participation, scoring, or performance
• •No inducement: boosters and collectives (now formally classified as "associated entities" — see next section) cannot offer NIL as an inducement for enrollment decisions, and their deals are subject to NIL Go review for valid business purpose and fair market value
• •No institutional employment: schools cannot directly pay athletes as employees for their athletic services
• •Prohibited categories: state laws and NCAA guidance restrict NIL deals in certain industries (e.g., alcohol, tobacco, cannabis, sports gambling, adult content — varies by state and school)
• •Conflict with sponsor agreements: athletes generally cannot enter NIL deals that directly conflict with existing school or conference sponsor agreements (e.g., an Adidas-sponsored school cannot allow athletes to wear or promote Nike)

The House Settlement created a new defined category for the third parties that have historically funded NIL deals — boosters, collectives, and similar institutionally-affiliated payors. Understanding this category is essential because most college NIL money flows through it.

What is an "Associated Entity or Individual"? An associated entity or individual is one that is closely affiliated with an NCAA member school for the purpose of promoting the school's athletics program or its student-athletes. The category includes:

• •All NIL collectives (whether 501(c)(3), LLC, or otherwise structured)
• •Athletic-program boosters and donors
• •"Representatives of an institution's athletics interests" (the pre-NIL legacy term)
• •Third-party entities that promote an institution's athletics program

Two rules govern associated entity payments:

• •Valid business purpose — Payments must be related to the promotion or endorsement of goods or services provided to the general public for profit. Pay-for-play, recruiting inducements, and payments without a real commercial deliverable do not qualify.
• •Fair market value — Payments must fall within a reasonable range of compensation for the services provided. This is the same standard the Trump April 2026 executive order's "fraudulent NIL scheme" definition tracks: payment "above the actual fair market value" through collectives or similar entities is the targeted abuse.

NIL Go — the clearinghouse. All NCAA Division I student-athletes must report every NIL contract or payment term involving an associated entity or individual with a total value of $600 or more to the NIL clearinghouse (NIL Go) for review. NIL Go evaluates whether the deal has a valid business purpose and whether the compensation falls within a fair market value range.

CSC — the enforcement body. The College Sports Commission (CSC) is the body created post-settlement to enforce NIL rules and apply the NIL Go review process. The CSC has authority over deals involving associated entities and individuals at Division I institutions.

Why this matters for athletes. If an athlete signs an NIL deal with their school's collective, that collective is an associated entity. The deal will be reported to NIL Go, reviewed for valid business purpose and fair market value, and if it fails review, the CSC may require modification or denial. Deals with national third-party brands (e.g., a major endorsement with a non-affiliated company) are typically not associated-entity deals and follow a different review path — though the $600 disclosure threshold still applies to the athlete's institution.

Most state NIL laws require athletes to disclose NIL agreements to their institution within a short window, typically 7–72 hours after execution. Federal legislation could standardize this. Disclosure typically includes:

• •The parties to the agreement
• •The nature of the services required
• •The compensation amount or range
• •The duration of the agreement
• •Any exclusivity provisions

Schools review disclosures for conflicts with existing school or conference agreements. Schools cannot withhold approval or refuse to process a disclosure as a means to block NIL activity.

NIL compensation is taxable income. Athletes earning more than $600 from a single source in a calendar year will typically receive a Form 1099-NEC. Key tax considerations:

• •Federal income tax: NIL earnings are subject to federal income tax at the athlete's marginal rate
• •Self-employment tax: If the athlete is classified as an independent contractor (most common), they owe ~15.3% self-employment tax on NIL income
• •State income tax: varies by state; athletes who compete in multiple states may owe "jock taxes" to states where they perform
• •Business expenses: equipment, travel, and professional fees related to NIL activities may be deductible
• •Quarterly estimated payments: athletes with significant NIL income should make quarterly estimated tax payments to avoid underpayment penalties

Schools that receive over $20M in annual athletic revenue are required (under the House Settlement) to provide access to tax advisory services for their athletes.

College athletes may now engage licensed sports agents and attorneys to assist with NIL transactions. What you need to know:

• •Licensed sports agents must be registered under the applicable state's Athletic Agents Act
• •Florida, Georgia, Texas, and most other states with NIL laws explicitly permit agent representation for NIL deals
• •Athletes should verify the agent's registration before signing a representation agreement
• •Agent fees: The SCORE Act (currently stalled in Congress) would cap NIL agent fees at 5% of compensation under institutional NIL agreements — see the House Settlement page for federal legislation status
• •Disputes with agents over NIL contracts are handled in state civil courts, not by the NCAA
• •You can terminate an NIL agent relationship without risking eligibility (unlike traditional agent use under prior NCAA rules) — though contractual penalty provisions in the agent agreement may still apply

NIL collectives are booster-organized groups that pool funds to create NIL opportunities for athletes at a specific school. They emerged as a vehicle to work within the NCAA's prohibition on institutional pay-for-play. Collectives are the most common form of "associated entity" under the post-House Settlement framework — see the Associated Entities section above for the rules that now govern collective payments.

Collectives typically operate by:

• •Contracting directly with athletes for content, appearances, or social media posts
• •Providing a marketplace for local businesses to connect with athletes
• •Organizing group deals across the entire team or program

Post-House Settlement, every collective deal worth $600 or more must be reported to NIL Go and reviewed by the College Sports Commission for valid business purpose and fair market value. Many collectives are formalizing into more structured entities or merging with athletic department operations, since schools can now pay athletes directly. Collectives may continue to supplement direct school revenue sharing.

The transfer portal and NIL have become deeply intertwined. Athletes frequently transfer to gain access to better NIL opportunities at schools with larger collectives or higher revenue sharing capacity.

Key points:

• •Moving schools (via the transfer portal) does not cancel existing valid NIL agreements
• •New schools may offer their own NIL opportunities as part of the recruiting process
• •Schools and collectives may not offer NIL as an illegal inducement — but regulators and enforcement bodies have found it nearly impossible to disentangle legitimate NIL from recruiting inducement in practice
• •A transfer athlete's existing third-party contracts should be reviewed before the move to check for any geographic exclusivity, school-branding restrictions, or termination provisions