Takeaways

• Recent guidance from the Department of Education’s Office of Civil Rights clarifies that Name, Image, and Likeness (NIL) agreements between athletic programs and athletes are subject to Title IX and must be “substantially proportionate” between men’s and women’s athletic programs. The guidance was less clear on third-party NIL agreements, but athletic programs should include Title IX analysis and considerations in administering all of their NIL programs – including any NIL arrangements with collectives and other third parties. Should the House settlement be approved, Title IX will likely also apply to revenue sharing arrangements between athletic programs and athletes.
• The Department of Justice’s objections to the proposed House settlement ignite broader questions around collective bargaining and the employment status of college athletes, ensuring the topic will remain front and center in 2025, both in court and in Congress.
• Developments in the Johnson v. NCAA and Schroeder v. University of Oregon cases, a potential House settlement, heightened Congressional activity in this space, and the actions taken by the outgoing Biden Administration present a complex landscape for athletic departments that will require vigilance on the departments’ part, regular monitoring of regulatory and legislative developments in Washington, and robust compliance and risk mitigation frameworks to ensure a smooth transition in what will likely be a turbulent 2025 for collegiate athletics.

Several developments in 2024 collegiate athletics have set the stage for potentially significant changes to college athletics throughout 2025.

The proposed settlement in the House v. NCAA case could be approved in April, introducing revenue sharing models and direct payments from institutions to players, as well as $2.8 billion in back payments for current and former Division I athletes. Ongoing litigation in the Johnson v. NCAA (for a case challenging the status of college athletes as “employees” under the Fair Labor Standards Act) and Schroeder v. University of Oregon (bringing Title IX claims against the University and their NIL collective for inequitable publicity, access, support, and NIL opportunities for their women athletes) also promise potentially significant labor and gender equality developments in 2025.

Furthering the complexity that each of these developments presents were two actions taken by the Biden Administration during its final days: (i) the Department of Education’s Title IX guidance regarding NIL activities and (ii) the Department of Justice’s objections to the proposed House settlement. The new Trump Administration notwithstanding, these two developments signal a busy – and potentially contentious – 2025 for athletic departments, conferences, and stakeholders across the collegiate athletics landscape.

The Biden Department of Education’s “Ensuring Equal Opportunity Based on Sex in School Athletic Programs in the Context of Name, Image, and Likeness (NIL) Activities” Guidance

In one of the final actions undertaken by the Biden Administration, the Department of Education’s Office of Civil Rights (OCR) issued the guidance, “Ensuring Equal Opportunity Based on Sex in School Athletic Programs in the Context of Name, Image, and Likeness (NIL) Activities.” The long-awaited guidance clarified that NIL payments from schools to athletes are “athletic financial assistance” under Title IX such that the “benefits, opportunities, and treatment” afforded to male and female athletes must be “substantially proportionate.” In clarifying Title IX’s applicability of the substantially proportionate standard to NIL arrangements, the guidance notes that athletic programs must ensure, inter alia, “equivalent publicity” opportunities for male and female athletes for NIL and equal access to NIL-related support services. Most notably, given the reliance that many athletic programs have on third-party administrators of their NIL programs, NIL collectives, and the substantial role that private donors play in the NIL landscape, the guidance includes the following passage:

“OCR has long recognized that a school has Title IX obligations [even] when funding from private sources, including private donations and funds raised by booster clubs, [as such funding] creates disparities based on sex in a school’s athletic program or a program component. The fact that funds are provided by a private source does not relieve a school of its responsibility to treat all of its student-athletes in a nondiscriminatory manner. It is possible that NIL agreements between student-athletes and third parties will create similar disparities and therefore trigger a school’s Title IX obligations. Because these NIL agreements vary widely and continue to evolve and because the application of Title IX’s equal athletic opportunity requirements is a fact-specific inquiry, this Fact Sheet does not offer specific guidance on Title IX’s application in the context of compensation provided for the use of a student athlete’s NIL by a third party, including an NIL collective.”

It is unclear whether the new Administration will rescind or revise the OCR’s guidance. But, even if they do, the OCR’s interpretation of Title IX will likely inform private Title IX litigation, the ongoing Schroeder case (more below), and where federal policymakers – particularly Congressional and Senate Democrats (also more below) – will view the interplay of Title IX, NIL, and any potential revenue sharing.

The Biden Justice Department’s Statement of Interest in the House v. NCAA Case

The day following the issuance of the OCR guidance, the Department of Justice (DOJ) submitted to the Northern District of California a “Statement of Interest” (“Statement”) raising objections to the proposed House settlement’s 22 percent revenue cap that will serve as the basis for any potential revenue sharing between athletic programs and athletes. Similar to the OCR’s guidance, the DOJ’s Statement of Interest previews a long-standing issue in college athletics that will likely come to a head in 2025: the lack of collective bargaining in college athletics and the lack of employment status for college athletes. The Statement describes the proposed revenue cap as “replacing one cap with another,” finding that the 22 percent revenue cap “is still fixed by agreement among organizations that collectively control the entire labor market.” The Statement goes on to further distinguish between the proposed House cap and professional sports league salary caps noting that the only means of setting compensation to avoid future antitrust liability would be through collective bargaining. The DOJ recommends that the District Court either decline to approve the proposed settlement or that the 22 percent revenue cap be removed altogether (removing any limitations on what programs could pay athletes).

It remains to be seen how much the Statement will impact the District Court’s decision-making, as a number of objections to the proposed settlement have been filed to date. And, while there is also a possibility that the new Administration’s DOJ could withdraw the Statement, Judge Wilken (a Clinton appointee who also ruled in favor of college athletes in the landmark O’Bannon case) will consider the issues raised by the Statement and other objections that have been filed in House leading up to the final approval hearing on April 7, 2025.

Johnson and Schroeder

Consistent with the themes of employment and gender equity in connection to NIL (and potentially revenue sharing) are two unresolved cases from 2024 in Johnson and Schroeder.

In Johnson, the U.S. Court of Appeals for the Third Circuit ruled on July 11, 2024, that the plaintiff-athletes could bring Fair Labor Standards Act (FLSA) claims for unpaid wages. The Third Circuit remanded the case back to the Eastern District of Pennsylvania to determine whether athletes can be considered employees under the FLSA. The case remains in the Eastern District of Pennsylvania as of this client alert. The Johnson ruling also creates a potential circuit split with the Seventh Circuit who, in their 2016 Berger decision, denied the FLSA claims of college athletes. No matter the outcome with the District Court in Johnson, the party that does not prevail will likely appeal, and the issue will likely be resolved by the U.S. Supreme Court or by Congress (more below).

In Schroeder, current and former University of Oregon women’s rowing and beach volleyball athletes allege, inter alia, Title IX violations involving the University’s NIL program by failing to provide them with the same treatment and benefits provided to male varsity student-athletes regarding potential NIL deals. Notably, the alleged disparate claims implicate the University’s NIL program and its engagement with its two leading NIL collectives describing the university’s role as “facilitating unequal distribution of NIL opportunities.” This is believed to be the first Title IX lawsuit focused on the administration of an NIL program, and it could have far-reaching implications for both NIL and any potential revenue sharing should House be approved.

Considerations for Athletic Departments and Other Collegiate Athletics Stakeholders

• Updating your Title IX Compliance Plans to incorporate all aspects of your NIL program and any potential revenue sharing under consideration. As the OCR guidance and Schroeder make clear, Title IX is expected to apply to both direct NIL payments to athletes – and very likely – to any NIL payments from collectives or other third parties. Similarly, as a part of any House-related revenue sharing planning, departments should also include Title IX considerations in the development of any revenue-share planning and incorporate these considerations into any updated Title IX Compliance Plan and your ongoing compliance efforts.
• Preparing your House compliance program. The proposed House settlement in some form could be approved in April 2025. In addition to revenue sharing, any potential House settlement could bring significant changes to how departments operate with changes to NIL and new reporting and compliance obligations, among others. Athletic department compliance and operational capacity to comply with House – which would include incorporating the Title IX compliance considerations referenced above – should be accelerated in light of the pending House settlement.
• Keeping an eye on Washington. There will be significant action in Washington regarding collegiate athletics. We anticipate legislation and hearings within the next thirty (30) days in both the Senate Commerce and House Energy and Commerce Committees focusing on NIL reform. We also anticipate that there will be legislative proposals regarding the employment status of athletes, antitrust protection for the NCAA, potentially codifying House, and other health, safety, and education proposals. Republican majorities and the Trump White House notwithstanding, there is not a clear consensus on any of the aforementioned issues that can attract 60 votes in the Senate and 218 votes in the House, so any NCAA-related legislation will have to be bipartisan. The Guidance and the Statement from the Biden Administration are both “markers” for where many Congressional and Senate Democrats will be on these issues, so absent a compromise position on employment (a special, non-employee designation under the FLSA that would allow for collective bargaining has been floated as a potential compromise) and a consideration for codifying Title IX’s applicability to NIL and revenue sharing (as opposed to regulatory guidance and/or caselaw that can change), bipartisan progress on these issues may be difficult to achieve.
• Understanding the implications of an adverse decision on Johnson and Schroeder. For athletic departments, an adverse finding in Johnson could mean significant changes where state and federal employment laws could apply to athletes. And while the consequences of federal courts siding with the athletes in Schroeder may be less disruptive than FLSA compliance, establishing and maintaining Title IX-compliant NIL infrastructure would still be a significant undertaking. For athletic departments, understanding the implications of both of those decisions if the courts side with the athlete-plaintiffs should be a part of any departments’ long-term planning.

Ice Miller’s Collegiate Athletics Practice includes attorneys from our Title IX, Workplace Solutions, Business, and Government Affairs & Regulatory Law practices who are closely monitoring each of the issues referenced above. Please feel free to contact Jarrod Loadholt, Gai Sher, Tiffany Releford, or Germaine Willett should you have any questions about this client alert, or any collegiate athletics matters where we could potentially be helpful.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.