Executive Order Attempts to Remodel NIL Rules
The White House looks to give the NCAA wide latitude to curb pay-for-play deals.
A Presidential Executive Order issued July 24, 2025, represents a significant federal intervention into the collegiate sports system, with profound implications for the Name, Image, and Likeness (NIL) marketplace.
The order, "SAVING COLLEGE SPORTS," aims to curtail the high-dollar payments to athletes that have become common, stating the current system is an "out-of-control, rudderless" environment that threatens the existence of non-revenue sports programs (Sec. 1). For attorneys, boosters, collectives, and brands navigating the NIL space, the order introduces a new framework of compliance and risk.
The administration’s policy action is a direct reaction to the market forces unleashed by litigation that dismantled NCAA restrictions on athlete compensation. The order argues that escalating bidding wars for top talent are creating an "oligarchy of teams" and diverting funds from less visible sports, which it credits with developing a majority of America’s Olympic athletes (Sec. 1).
The "Fair Market Value" Gauntlet
At its core, the Executive Order seeks to create a sharp distinction between legitimate commercial endorsements and payments it considers improper recruiting inducements. It establishes a policy that "third-party, pay-for-play payments to collegiate athletes are improper and should not be permitted by universities" (Sec. 2(c)).
Crucially, the order provides a specific safe harbor for intellectual property rights, clarifying that the policy "does not apply to compensation provided to an athlete for the fair market value that the athlete provides to a third party, such as for a brand endorsement" (Sec. 2(c)).
This distinction places immense pressure on the concept of "fair market value" (FMV). Determining the FMV of an individual's right of publicity is already a complex analysis. Under the framework proposed by this order, that valuation could become the determining factor in whether a contract is permissible or deemed an "improper" payment. This may lead to increased demand for formal valuation opinions and a more conservative approach to structuring NIL agreements to ensure compensation aligns with demonstrable marketing deliverables.
A Shift in Antitrust Posture
The order also signals a potential reversal of the legal pressures that created the modern NIL landscape. It directs the Attorney General and the Federal Trade Commission to "stabilize and preserve college athletics" by protecting them from "unreasonably challenged" lawsuits under antitrust theories (Sec. 4(a)).
This could provide the NCAA and athletic conferences with the federal backing needed to establish new regulations on compensation, transfers, and recruiting—rules that were previously untenable due to the high risk of antitrust litigation.
The order also directly addresses the legal foundation that enabled the current NIL market: antitrust law. It directs the Attorney General and the Chairman of the Federal Trade Commission to "stabilize and preserve college athletics through litigation, guidelines, policies, or other actions... by protecting the rights and interests of student-athletes... when such elements are unreasonably challenged under antitrust or other legal theories" (Sec. 4(a)).
This directive appears to signal a potential shift in federal enforcement posture, possibly creating a safe harbor for collegiate governing bodies to establish new rules on compensation and transfers. For years, the threat of antitrust lawsuits has prevented the NCAA and conferences from implementing the very guardrails this order seems to encourage. The practical effect could be a newfound ability for these organizations to regulate the NIL market more aggressively, backed by a supportive stance from the Department of Justice and the FTC.
Implications for IP Practitioners and NIL Stakeholders
The Executive Order, if implemented as written, would have several direct consequences for those operating in the college sports and IP space.
Heightened Scrutiny on Agreements: Attorneys and agents drafting NIL contracts will need to meticulously document the justification for compensation levels. The structure of these deals, linking payments to specific services and outcomes, will be critical to defend them as representing fair market value.
New Regulatory Framework: The order tasks the Secretary of Education, in consultation with the AG and FTC, to develop an enforcement plan within 30 days (Sec. 2(d)). This could result in new federal regulations, funding conditions, or Title IX enforcement actions targeting institutions whose third-party NIL collectives are perceived as engaging in pay-for-play.
Federal Preemption Questions: The order notes that "more than 30 States have passed their own NIL laws in a chaotic race to the bottom" (Sec. 1). A strong federal policy could create significant conflicts with this patchwork of state legislation, raising complex legal questions about federal preemption for companies and universities operating nationwide.
Uncertainty Remains: An Executive Order is not legislation and is subject to legal challenges. The ambiguous distinction between a "brand endorsement" and a "pay-for-play" inducement is likely to be a focal point of future disputes. Furthermore, the directive for the Department of Labor and the National Labor Relations Board to "clarify the status of collegiate athletes" (Sec. 3) could independently create massive shifts in the legal landscape.
Potential Concerns and Regulatory Risks
While the order’s stated goal is to create stability, its implementation presents considerable uncertainty and new categories of risk for all market participants.
Enforcement Ambiguity: The order directs multiple federal agencies to create an enforcement plan but provides no objective standards for determining FMV. This leaves the door open for inconsistent or subjective enforcement actions. A deal deemed acceptable by one institution could be flagged as improper "pay-for-play" by federal regulators, creating a chilling effect on the market.
The Threat of New Litigation: The vague line between a permissible endorsement and a prohibited payment may simply shift the focus of legal battles. Instead of challenging NCAA rules on antitrust grounds, future litigation could involve challenges to the government's characterization of a specific NIL contract. This could pit federal agencies against universities, collectives, or even individual athletes.
Limits of Executive Authority: An Executive Order does not carry the same weight as a statute passed by Congress. The order will almost certainly face legal challenges on the grounds that it oversteps executive power and attempts to regulate an area governed by a mix of state laws and court precedent. Businesses and institutions relying on the order’s framework must account for the risk that it could be modified or struck down by the courts.
Unintended Consequences: In an attempt to curb perceived excesses, the new rules could inadvertently suppress the legitimate market value of athlete NIL rights. If brands and collectives become overly cautious to avoid regulatory scrutiny, they may offer less compensation than an athlete’s publicity rights are actually worth, harming the very individuals who have recently been empowered to monetize their IP.
The Executive Order to "Save College Sports" marks a pivotal moment. It attempts to solve the challenges of the current NIL era by imposing a federal framework.
For practitioners and their clients, this new environment requires a heightened focus on defensible valuation, careful contract structuring, and diligent monitoring of the inevitable legal and regulatory challenges to come.