In December 2023, members of the Oregon female beach volleyball and rowing teams filed a lawsuit under Title IX of the Educational Amendments. The women allege the University of Oregon discriminates against female student athletes by providing unequal benefits and financial assistance with men’s sports, specifically focusing on the treatment compared to the football team. This case could drastically alter the landscape of NIL any current or future NIL collectives.
Title IX seeks to provide equal opportunities to men and women by prohibiting discrimination on the basis of sex at universities which receive federal funding. The federal government has identified nine areas in which athletes must receive equal treatment and benefits under Title IX, these are:
- The provision of equipment and supplies
- Scheduling of games and practice time
- Travel and per diem allowance
- Opportunity to receive coaching and academic tutoring
- Assignment and compensation of coaches and tutors
- Provision of locker rooms, practice and competitive facilities
- Provision of medical and training facilities and services
- Provision of housing and dining facilities and services
- Publicity
The law does not define publicity, and no courts have, to date, held it to encompass NIL. However, courts have held Title IX to apply to activities not listed above, such as recruiting. Thus, the court in this case, or a future case, could decide that equal opportunity to publicity encompasses equal opportunity to profit on an athlete’s name, image, and likeness.
If this were to happen, the structuring of the relation between your NIL collective and the university becomes of paramount importance due to the Title IX implications. If there is a sufficiently close relationship between the university and your collective, a court could find Title IX to apply which you severely curtail how your NIL money has to be divided.
As this is a novel field of law, there is no tried and true test to determine how close this relationship must be. However, in cases brough under the Equal Protections Clause of the Fourteenth Amendment, courts use the “state action doctrine” to decide when a private actor has sufficient ties to the state to be considered a state actor. The analysis generally focusses on the entanglement between the government and the private entity, here the NIL collective and the university. Alternatively, courts may look to state agency principles to find the NIL collective was acting as an agent of the school. However courts decide to address this issue when faced with it, it behooves your collective to be proactive in the structure and conduct of your organization to be best protected in the event a court rules Title IX applies. And, most importantly, to be best positioned to function in such a world.
Whether your NIL collective is already up and running or you are just starting on the process to form one, it is important to look forward to these kinds of potential issues and try to address them in the structure of your organization. Evaluating your NIL collective’s association with the university and ensuring it is structured as a truly independent legal entity is just one step in protecting your organization from liability. Additional issues that may arise include:
- Whether the athletes who sign NIL deals with your collective or associated business are employees under federal or state law
- What steps your collective can take to ensure players don’t “take the money and run”
- Navigating the NIL laws of your own state and the states of the student athletes and recruits you work with
- The associated tax implications for your organization, concerning any tickets or other benefits received from the school, and for your business partners.
The attorneys at Dalton & Tomich, PLC are ready to help in structuring your NIL collective’s organization and operation to best compete in this new and evolving field. We are experienced in working with nonprofit and for profit entities from formation to governance and are ready to put this experience to work to help guide you through any and all legal complexities to help achieve your goals.
