(LEX 18) — President Trump signed an executive order that prohibits third-party "pay-for-play" payments to collegiate athletes while still allowing legitimate fair market value compensation such as brand endorsements.
The executive order aims to clarify the rules around Name, Image, and Likeness (NIL) deals in college athletics, distinguishing between acceptable brand endorsements and problematic recruitment payments.
"Prohibits third party... pay-for-play payments... to collegiate athletes," the order states, while noting this "does not apply to legitimate fair market value compensation... such as brand endorsements."
The market value and brand endorsements represent the original intent of the NIL era, giving athletes the opportunity to profit from their name, image, and likeness.
What the order specifically prohibits are the collectives that have emerged nationwide, particularly in football and men's basketball, creating a multi-million-dollar market in recruiting and the transfer portal.
This executive order aligns with guidance issued earlier this month by the College Sports Commission.
The order also specifies that revenue sharing between universities and their athletes should protect women's and non-revenue sports.
Additionally, it directs the Secretary of Labor and the National Labor Relations Board to "clarify the status of student-athletes."
