College Sports Commission loosens prohibition on NIL payments - ESPN

The College Sports Commission has loosened its blanket prohibition on athletes receiving payments from NIL collectives, according to a memo the new enforcement agency sent to athletic directors Thursday morning.

The collectives, an evolving industry built to funnel money to athletes at a particular school, will still face significantly more scrutiny when trying to sign deals with players than they had in past years.

Thursday's memo from the CSC, which revises guidance it first issued three weeks ago, ends the first notable scuffle under the industry's new enforcement structure without needing to return to a courtroom. However, it provides more of a punt than a definitive answer to an essential question for the future of how major college sports will function: Will wealthy teams and their boosters be able to game the system designed to create competitive balance?

The new rules say athletes and collectives will have to show that each deal they sign requires the athlete to promote a product or service that is being sold to make a profit rather than just being a vehicle to channel money from boosters to athletes. Collectives might need to show documentation of «the entity's effort to profit from the deal,» according to the memo.

College athletes can now make money in two ways: via direct payments from their school and through endorsement contracts with third parties. As part of a landmark legal agreement known as the House settlement, which was finalized in June, lawyers for the athletes and the schools agreed to put a cap on direct payments starting at $20.5 million per school in the coming academic year.

During the previous four years, when only NIL payments were permitted, a cottage industry of collectives evolved to