LINCOLN, Neb. (AP) -An arbitrator ruled in favor of the College Sports Commission on Monday in a case brought on behalf of Nebraska football players that is viewed as a key test for the new entity in charge of approving third-party name-image-likeness deals in college sports.
The CSC in a statement said the arbitrator affirmed the commission’s decision to reject third-party NIL agreements between Nebraska’s multimedia rights (MMR) partner, Playfly, and the players.
At issue was whether Nebraska’s MMR partner would be considered an “associated entity” — deals from which are subject to CSC scrutiny.
With that decided, the CSC said the arbitrator rejected the deals because:
— They lacked what the CSC calls a “valid business purpose” because they did not include goods or services offered to the general public for profit.
— Playfly violated a rule against “warehousing” NIL rights — i.e., paying for the rights to use for some purpose later instead of employing them right away.
Speaking to media at the Atlantic Coast Conference meetings in Florida, the CSC’s CEO, Bryan Seeley, said he didn’t consider the deal to be a precedent.
“Even if it’s not precedential, the fact is it’s influential, and it’s influential in people’s minds about how they think about enforcement,” he said. “So, for me, it was a good day.”
The CSC said it would release the arbitrator’s full decision later.
Some observers are curious to see whether the university or the state will sue over the decision, something the CSC was hoping to avoid when it sent out a “participation agreement” for schools to sign that forbid them from suing the commission.
Many schools have been reluctant to sign the agreement, arguing they’re not allowed under their state laws to sign away their ability to take legal action.
“It’s whether their state attorney general challenges it in court and what the outcome of that is, I think that is the true test of whether this (CSC) is a legitimate governing body,” sports attorney Paia LaPalombara told The Associated Press in an interview last week in discussing the Nebraska case.
In acknowledging the decision, Nebraska AD Troy Dannen said the school would continue to operate under the CSC process “while monitoring changes in the collegiate landscape.”
“We fully support all our student-athletes maximizing the value of their Name, Image and Likeness during their time at the University of Nebraska,” he said.
Officials from the Nebraska attorney general’s office did not immediately respond to emails from the AP.
Seeley still thinks there are ways for the Nebraska players to get paid within the rules.
“I don’t believe litigation is necessary for these student-athletes to get money for their NIL,” he said. “I cannot control what happens, though, outside of what we do.”
In a separate case pending in the federal court that approved NIL payments via the House settlement, attorneys are arguing that MMR partners should not be considered “associated entities.” A hearing in that case is scheduled for May 27.
