Caleb Diaz Breaks Down the Latest News on NIL Litigation in Q&A with Reuters

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Adams & Reese attorney Caleb Diaz was interviewed in an expert Q&A by Reuters on “Litigating Student-Athlete Name, Image, and Likeness Cases.” The interview is published in Reuters’ Practical Law The Journal.

Diaz discusses recent changes to the legal framework concerning student-athletes and college athletics, examining key considerations for parties and their counsel involved in litigation over NIL claims. A member of the Adams & Reese Litigation Practice Group, Diaz has experience in sports law, authoring articles on NIL deals and the litigation and laws surrounding those deals among corporations, student-athletes, and NCAA rules and regulations. 

NIL is a legal concept that encompasses an individual’s right of publicity and allows individuals, particularly student-athletes, to control and profit from the commercial use of their identity. This includes engaging in third-party sponsorships and endorsements, such as brand partnerships, sponsored social media posts, and paid speaking engagements.

The legal framework surrounding NIL has undergone rapid and significant changes, transitioning from strict amateurism rules to a more permissible environment for commercialization. This evolution has been shaped by landmark court decisions, state legislative actions, and shifts in NCAA policy, creating a complex and sometimes inconsistent regulatory landscape.

Following final approval of the House v. NCAA settlement on June 6, 2025 (In re College Athlete NIL Litig., No. 20-3919 (N.D. Cal. June 6, 2025)), a new compensation framework for college athletics took effect, with key implementation dates that began on July 1, 2025.

Diaz discussed how the framework of the settlement includes the following elements:

• Schools may allocate up to $20.5 million annually in direct payments to student-athletes for use of their NIL or related athletic services, with this cap increasing by at least 4% annually over the 10-year settlement term. This revenue-sharing model, calculated as 22% of the average Power Five schools’ athletic revenue, allows opt-in schools to distribute funds across sports, though most prioritize football and men’s basketball due to their revenue generation.
• To stabilize the NIL environment, participating schools must:
  • disclose all third-party NIL deals worth $600 or more through the NIL Go portal (launched on June 11, 2025), which is operated by Deloitte and aims to curb pay-for-play arrangements by reviewing deals for fair market value and valid business purposes, while offering an arbitration process for student-athletes to appeal rejected deals; and
  • use technology platforms, such as NIL Go, to monitor and report NIL payments, ensuring compliance with settlement rules and state NIL laws.
• Schools and the College Sports Commission (CSC), formed by the Power Five conferences, oversee enforcement, replacing the NCAA’s prior role in NIL regulation.
• Mandatory roster limits replace traditional scholarship caps, setting maximum team sizes (such as 105 for football and 15 for basketball) to control costs and standardize competition. Athletes cut due to these limits before June 2025 may be designated as exempt Designated Student-Athletes, allowing schools to retain them without counting against limits, though reinstatement is at each school’s discretion.
• Full scholarships are permitted for all declared roster student-athletes, eliminating previous sport-specific scholarship limits. This change is expected to provide over 115,000 additional scholarships annually, though roster limits may reduce opportunities for walk-ons and student-athletes in equivalent sports like swimming or rowing.

With no applicable federal law, NIL compliance remains complex, prompting NCAA initiatives such as a public online deal database (NCAA: NIL Assist) and proposed school facilitation of NIL opportunities. Booster-led collectives, such as alumni or fan-driven groups that pool funds to offer NIL deals to student-athletes (often to attract or retain talent), face recruiting restrictions. However, ongoing legal challenges and high-profile NIL deals highlight the evolving landscape. Student-athletes must report deals, avoid restricted endorsements, and seek professional advice to successfully navigate these regulations.

The absence of federal NIL legislation continues to drive complexity, with NCAA reforms, state laws, and proposed federal oversight shaping an uncertain future.