NCAA Bylaw 22.1.3 provides that “[a]n associated entity or individual shall not enter into an agreement with or provide payment to a prospective student-athlete or student-athlete unless the agreement or payment terms, as determined by the name, image and likeness clearinghouse, are for a valid business purpose related to the promotion or endorsement of goods or services provided to the general public for profit …” To meet this requirement, the NIL payment or license must be for a valid business purpose related to the promotion or endorsement of goods or services to the general public and those goods or services must be sold “for profit.”
The CSC’s “for profit” inquiry focuses on whether the sale of goods or services is for profit and not whether the entity itself is operating at a profit or a loss at any given time. As part of this inquiry, the CSC may require student-athletes or the entities with whom they seek to enter NIL agreements to provide information and documentation to establish compliance with the requirements, including the entity’s efforts to profit from the deal. Refusal to provide this information or the provision of insufficient information to establish compliance may result in deals not being cleared by the CSC.
In addition, an associated entity or individual can serve as a marketing agent matching student-athletes with businesses offering NIL opportunities.
Finally, any NIL deal with an associated entity or individual must actually use the student-athlete’s NIL in a clear and specific manner. Simply paying for the rights without explaining how those rights will be used (i.e., “warehousing”) may not satisfy the requirements for payments by associated entities or individuals.