Required Disclosure of NIL Transactions
To date, NCAA rules do not legislatively require disclosure of NIL activities primarily because NIL activities were, by and large, prohibited, nullifying the need to confirm details. As referenced above, the proposed disclosure requirements would encompass both pre- and post-college enrollment activities.
The new NCAA concept would require a prospect to disclose NIL activities, including compensation arrangements and details of relationships with involved individuals, commercial entities and other third parties. As referenced above in relation to prospects involvement with boosters on NIL opportunities, disclosure would be required before a prospect signs an offer of athletically related financial aid or accepts an offer of admission.
Legislation would require current student-athletes to disclose information related to their business activities and relationships with individuals and other entities in advance of any arrangements for the use of their NIL and when changes are made to such agreements. In the case of advertisements or promotions of a third-party commercial product or service (or charitable, educational or nonprofit entity) the disclosure would include both Compensation arrangements, as well as details of relationships with an involved individual, commercial entity and third parties.
The student-athlete would be required to provide disclosure information in advance of any arrangements for the use of their NIL and shall provide updates to the information within 14 days if arrangements with the commercial entity or third parties change.
The NCAA Division I NIL Disclosure Subgroup of the Legislative Solutions Group developed a template disclosure form to serve as the basis for a nationally consistent standard for gathering required disclosure information from student-athletes who seek to engage in activities that involve the use of their NIL for promotional purposes. Institutions and conferences would be permitted to seek additional information beyond the baseline information required in the form. It was noted that the form may need to be customized depending on state laws regarding disclosure. It seems likely the disclosure form will see a few iterations as the NCAA NIL process evolves.
The Legislative Solutions Group agreed that student-athletes should be required to disclose involvement in NIL activities. Disclosure requirements will help to provide support to student-athletes, monitor booster involvement, ensure integrity of the recruiting process, and identify activities that may not align with the values of the NCAA, conferences or institutions.
Some third-parties intending to cultivate opportunities and represent student-athletes in the new NIL marketplace have expressed resistance to having to disclose NIL agreements’ terms and conditions, including transaction value, as that would arguably undermine the third-parties’ competitive edge for their clients in the NIL marketplace. This brings forward the discussion around the role(s) of the NCAA’s third-party administrators.