Editor’s Note: This article was originally published by Law & Liberty on March 21, 2025. With edits to match MTC’s style guidelines, it is cross-posted here with permission.
College athletics have been undergoing rapid change over the past five years. One of the most significant changes involves policies surrounding “NIL,” a shorthand for name, image, and likeness—an individual’s right to commercially exploit one’s identity, also known as the right of publicity. Thanks to a raft of state legislation and NCAA policy concessions, college athletes are now authorized to monetize that right through endorsement deals and other commercial activity free from NCAA interference.
For decades, the NCAA denied NIL rights to college athletes in the service of its amateurism principle. That principle forbids college athletes from receiving any compensation connected to their sports participation, so as to integrate them into the campus culture and the university’s educational mission. In other words, no “pay-for-play.”
As the NCAA has gradually embraced NIL rights, however, they have come wrapped in complicated and varied regulations promulgated by states and universities. These rules wind up further segregating college athletes from the broader campus community and do little to advance the interests of the sports, universities, NCAA, or athletes. It’s time to consider a freer market in college athletics.
The Bifurcation of the College Campus
To preserve and enforce the amateurism principle, over many decades the NCAA promulgated a vast and complex regulatory scheme that paradoxically resulted in segregating, rather than integrating, athletes into campus life. College athletes are subject to a host of specialized rules and restrictions affecting their financial aid, off-campus jobs, course and major selection, class attendance, academic support, housing, meal plans, and socializing. For example, athletes in revenue sports are often provided with their own dining facilities and living quarters and are answerable to professional non-faculty coaches. Athletics can interfere with academic pursuits, and make enrolling in certain majors virtually impossible because their time demands conflict with practice and game schedules. This has resulted in the phenomenon of “clustering,” where many members of one athletic team all major in the same discipline and/or take the same pre-approved classes, supported by dedicated academic advisors and tutors not available to the general student body.
Meanwhile, nonathlete college students have enjoyed increasing autonomy to pursue expressive and economic activity. While NCAA regulation of athletes was intensifying over the last 50 years, universities were retreating from the doctrine of in loco parentis for the general student body. The 1960s campus protests, changing demographics, and resistance to institutional authority forced a new conception of the university’s relationship with its nonathlete students. Today those students are actively encouraged to pursue professional success while enrolled, and those with marketable talents and skills are not expected to filter any external, professional activity through a university approval process. The university is not the guardian of those students’ public image.
The case is different with athletes today. The NIL revolution is only one front in the liberation of the college athlete, as intercollegiate athletics are transitioning from the amateurism model to a version of professional sports. But rather than simply placing college athletes on the same footing as all other students on campus, the NIL era has generated cycles of public and private regulation that continue to bifurcate campus into athlete and nonathlete fiefdoms.
For college athletes, the current regulatory landscape is a compliance minefield, lacking clarity and predictability.
While state laws sparked the NIL revolution, in many respects they codified the NCAA’s paternalism, erecting all sorts of guardrails and obligations with respect to college athlete commercial activity. Depending on the state, athletes are required to disclose NIL deals to the institution; file annual reports identifying anyone who has paid them; refrain from NIL deals that conflict with university agreements; adhere to time, place, and manner restrictions on NIL activity to avoid conflicts with team activities; limit the duration of their NIL deals to the period in which they participate in the athletic program; and refrain from promoting “vice” products in conflict with institutional values.
Nonathlete students face none of these constraints when exploiting their NIL. When Emma Watson, who famously played Hermione Granger in the Harry Potter movies, was attending Brown University, she was free to reap the royalties from the movie-themed video game released at that time without university oversight. Or consider campus social media influencers. They proceed under laws of general application such as the state’s existing publicity rights statute. They enter marketing deals with fashion and consumer product brands, even those in conflict with the university’s apparel sponsorship. To the extent permitted as a “fair use,” they incorporate images and experiences from their campus life into their social media content, capitalizing on the university’s reputation. Yet, the communications major and gaming design whiz are not required to disclose to their university deals with third parties, file reports, defer to preexisting university deals, or eschew certain product categories. In some cases, schools even pay nonathlete students to promote the institution on social media—“pay-for-play.”
[RELATED: No to Biological Males Competing Against Women]
The Cycle of Private and Public Regulation
In the wake of specialized state legislation protecting college athlete publicity rights, the NCAA withdrew its blanket prohibition on college athletes exploiting their NIL. But it issued a series of “interim rules” that continued to ban the use of NIL deals as an inducement to recruit an athlete to a university program. The ban was honored largely in the breach, with schools operating off-the-books through booster organizations and “NIL collectives” to offer de facto “pay-for-play” and gain a recruiting edge. When the NCAA threatened to enforce its interim rules, a coalition of state Attorneys General sought to enjoin them in antitrust and empower schools to enter NIL deals directly with their athletes. The NCAA ultimately threw in the towel, settling the lawsuit by agreeing to drop the ban.
Private class actions have similarly attacked the NCAA and its member institutions over eligibility rules that restrained economic opportunities for college athletes. A pending settlement of three massive class actions comes before a federal district court for final approval in April 2025. It promises to compensate 390,000 class members for depriving them of past NIL compensation and to authorize NCAA institutions to directly pay for athlete NIL going forward. The settlement will nonetheless continue to differentiate athletes from their peers, requiring disclosure and vetting of marketing deals for conflicts with university interests and whether they exceed fair market value and are disguised pay-for-play.
Each installment of private rulemaking is shaped in part by state legislative activity, which in turn begets further NCAA response in a perpetual cycle of specialized regulation and differentiation of college athletes. This morass of private and public law customized to the college athlete has led to calls to federalize those regimes. Proposals for federal legislation would establish national standards and a centralized regulatory authority for college athlete NIL exploitation. No such bills have gained traction in Congress. For college athletes, the current regulatory landscape is a compliance minefield, lacking clarity and predictability.
The Free Market Solution
Both public and private law regimes singling out college athletes for customized regulation have it wrong. Instead, states, schools, and athletes would benefit from discarding specialized rules and reverting to laws of general application. In other words, let’s embrace a free market alternative that treats college athletes like any other student on campus. Adopt a principle of nondiscrimination that deals with all college students the same way when they seek to benefit from and monetize their identities and publicity rights. States and institutions should simply declare that participation in intercollegiate athletics in no way detracts from any student’s right to control and profit from their NIL.
Deregulation is necessary because athletes are entitled to at least equal treatment with fellow students who are not subject to legislated redistribution of their worth. Colleges argue that athletes have contracted away these freedoms in exchange for the right to play their sport and, for many, to receive full cost-of-attendance. But no other students are asked to make such sacrifices to enjoy participation in extracurricular activities, even when the university offers scholarships dedicated to participants in those activities (see orchestras) or provides the facilities and brand to offer a professional pathway (see the college daily newspaper editor). Despite the NCAA insisting that its rules are designed to afford athletes a typical campus experience, they have shackled the athlete with endless proscriptions, while the nonathlete enjoys increasing expressive and economic freedoms.
Deregulation would not translate into preferences for the college athlete. An athlete engaged in NIL commercial activity, like any other student, would not be entitled to incorporate school intellectual property into the deal beyond fair use. Trademark law would continue to protect schools and conferences from unlicensed, unauthorized commercial use of their names and logos. Athletes would still have to wear the uniforms designated by their school and comply with school branding deals while practicing and playing their sport, just as a member of the university orchestra must dress in all black while on stage.
Customized rules addressing a specific industry or class of individuals—whether set forth in public or private law—are often a form of rent-seeking by an interest group. While they may be cloaked in rhetoric about societal values or the broader welfare, customized rules create systems that deliberately skew the distribution of benefits. The NCAA promulgated a private legal system that ostensibly protected the values of amateurism and students from commercial exploitation, but operated to advance its own commercial interests. Repeated finetuning of state NIL laws similarly reflects states’ efforts to tilt the recruiting playing field in their favor.
We should take a pessimistic view of special interest legislation because it abets the redistribution of wealth from large groups, including the public as a whole, to small ones. In the case of college athletics, the body of customized private rules has effectuated a similar transfer of wealth from revenue-sport athletes to nonrevenue sports, athletic departments, conferences, and the NCAA. It’s been observed that this transfer of wealth has largely flown from predominantly black labor in football and basketball to coaches, administrators, and other athletes who are overwhelmingly white.
Founded in an age of minimal revenues, the NCAA may not have started out rent-seeking, but that is where it has landed today with its layers of rules that prohibit the principal contributor to its athletic prosperity from capitalizing on it. An additional layer of customized public laws arrived in the NIL era, ostensibly to liberate athletes from the redistributive burden. But, as described, those laws have embraced paternalistic treatment of athletes to protect state school recruiting interests and the rents flowing into the coffers of the NCAA and its member institutions.
[RELATED: How to Fix the Constitution of Soccer]
Deregulation is Optimal
Deregulation is optimal because it is more likely to achieve the goals of the stakeholders on all sides of the issue.
It is a paradox of special interest legislation that those who succeed in obtaining customized legal treatment for their members nonetheless often find themselves disappointed with the results. The interest groups campaigning for specialized systems are often not homogenous, forcing the adoption of rules that are more politically feasible, as opposed to more sustainable and profitable. Nor are these interest groups any better at predicting economic and technological developments. As a result, they adopt short-sighted rules incapable of adapting to inevitable change.
NIL deregulation would enable the NCAA to divert enforcement budgets to other worthier causes within its purview, including athlete health, safety, and educational programs.
This phenomenon is evident in the NCAA’s continually evolving guidance on NIL commercial activity. The push-and-pull among universities, conferences, and NCAA headquarters has coalesced around a “worst-case” mentality that greater freedom conferred on athletes and alumni will result in a recruiting or competitive advantage for some members. That mentality is also reflected in state NIL laws that initially sought to micromanage the NIL space and were later narrowed or repealed.
From the perspective of the college athlete, beyond the financial windfall of NIL, they have already begun to access a host of benefits long available to similarly situated nonathletes, including business and brand building, entrepreneurial freedom, community engagement, and career preparation. Deregulated NIL will amplify those benefits and confer greater autonomy in choosing a school and charting an educational path.
From the perspective of the universities, NIL activity has furthered institutional values. Female athletes have thrived in the NIL space, advancing gender equity in college and professional sports. More athletes have opted to stay in school because deferring a professional career no longer means deferring opportunities to earn money. Freeing schools to partner with athletes in NIL exploitation will raise the value of an athletic department’s existing sponsorship deals and open new markets.
From the perspective of the NCAA, a NIL-free market will enhance competitive balance among its member institutions. NIL compensation has already facilitated spreading out talent among more schools, rather than concentrating it among the best and richest programs. Basic economics instructs that expanding the permissible resources to recruit athletes will better distribute those athletes across college programs. Before NIL, caps on scholarship aid meant that schools had to funnel their resources solely through hiring the top coach, building the best facilities, and offering the most television exposure. It follows that athletic talent would be concentrated in fewer schools. Introduce outside sources of athlete compensation and freedom of movement through the transfer portal, and the result is talent dispersed across a wider swath of athletic programs.
NIL deregulation would also strengthen the NCAA’s financial position. It would enable the NCAA to divert enforcement budgets to other worthier causes within its purview, including athlete health, safety, and educational programs. While some enforcement staff may be out of a job, the organization and its members would benefit from dialing down the negative public attention generated by the NCAA infractions process. On the revenue side, the NCAA has already revived business lines that incorporate athlete NIL, including resuming the licensing of video games abandoned after prior antitrust losses.
NIL deregulation does not solve the myriad other legal challenges to the current operations of intercollegiate athletics. It won’t help us determine whether athletes in some college sports programs should achieve employee status or whether NIL compensation is subject to Title IX’s prohibitions on sex discrimination in higher education. But simplifying the regulatory landscape for NIL might well clear a path toward other innovations that rationalize college sports for the benefit of all constituencies.
This essay is based on an article published at 11 Texas A&M Law Review 786 (2024).
Follow Jodi Balsam on X.
Image: “DSC_4502” by San Diego City College on Flickr
