The NCAA’s NIL ‘clearinghouse’ is a joke, would get laughed out of court

The portion of the House vs. NCAA settlement that is getting the most attention is the $20.5 million that universities can spend themselves on NIL payments for their athletes. However, there is a part of the settlement that you will be hearing much more about if you have not already.

There is a stipulation in the agreement that states any third-party NIL deals (e.g. anything that does not come directly from the university) worth $600 or more must be approved by a “clearinghouse” called “NIL Go.” The clearinghouse would be managed by an accounting firm called Deloitte and they would seemingly have the power of rejecting deals that they deemed were above market value and/or did not serve any actual business purpose.

Sounds good, right?

Well, there is absolutely zero chance that any NIL deal rejected by Deloitte would hold up in a court of law. Apparently, whoever added this ridiculous stipulation in the recent House settlement – and the parties that agreed to it – were not aware that the nation’s highest court has already spoken on this matter. Perhaps not directly, but the Supreme Court’s ruling in the 2021 NCAA vs. Alston case spoke volumes and set a strict precedent. In short, good luck getting a court to agree that an athlete’s NIL deal is “above market value” and therefore voided. There is not one judge in the country that would do that after NCAA vs. Alston. The Supreme Court ruled unanimously that the “NCAA attempting to restrict athletes from collecting benefits beyond full-ride scholarships violated antitrust law.” That is precisely what this clearinghouse would be doing.

Furthermore, how is Deloitte going to determine what is “above market value?” Here’s the thing in a capitalist society: Your market value is whatever someone is willing to pay you. We have what I would consider above-average college quarterbacks who will be making $4 million this season. Like it or not, that is literally their market value.

And get this, at a recent conference, Deloitte stated that “70 percent” of previous NIL deals across college athletics would have been denied by them (per Yahoo’s Ross Dellinger). Oh, that’s rich.  Seventy percent, eh? Well, 100 percent of those cases would have been thrown out in court. Imagine the first time a local car dealer gives a kid seven figures and the agreement is voided by Deloitte. That kid would eventually get every penny because the NCAA — even using a third party — cannot restrict athletes from collecting benefits beyond full-ride scholarships. There is no gray area here. NIL — which really should be called PTP (pay to play) — gives athletes benefits beyond scholarships and therefore cannot be restricted. This is what makes the “NIL Go clearinghouse” one of the most absurd things I’ve ever seen. How could anyone think preventing an athlete from making a certain amount of money would hold up in court, after the country’s highest court already ruled unanimously on this issue?

Justin Williams from The Athletic quoted college football coaches and administrators who are convinced “the bagman” will return in full force because of this settlement. They also believe athletes won’t even use the NIL Go system to declare what they are making through their various NIL deals. Here is an excerpt from his piece:

In candid conversations, coaches and staffers have serious doubts that athletes will declare those deals, or do so accurately. Some have suggested that players are being encouraged not to declare deals at all, but to simply take the money and keep quiet rather than risk the clearinghouse flagging it. And if that’s the case, where do we suspect that money might be coming from?

 “I guess it would just be the same as the way things used to work,” lamented an athletic director, frustrated by those already angling to undermine the settlement. “We’d be right back where we started.”

Before NIL, “bag men” were the not-so-invisible hands of big-time college sports, boosters who secretly funneled cash to top players and recruits. It was cheating in the same way that driving over the speed limit is a crime: If it wasn’t flagrant or egregious, you probably weren’t getting caught.

Keep it locked to Bucknuts for full coverage of all things Ohio State football. Athletic director Ross Bjork will meet with the media on Thursday to discuss the changing NIL landscape.