New CSC Guidelines Jeopardize House Settlement

CLEMSON — It did not take too long.

What is “it” exactly.

On Friday, attorneys for the plaintiffs in the House settlement believe the NCAA and power conferences are violating terms of the legal agreement and are threatening to report the wrongdoing to the court, according to Ross Dellenger of Yahoo Sports.

Friday’s news is in response to what the College Sports Commission did on Thursday, when the new commission denied name, image and likeness deals (NIL), including many booster-backed collectives. In a two-page letter sent to NCAA and power conference officials, Jeffrey Kessler, a co-lead House plaintiff attorney along with Steve Berman, requested the NCAA and conferences “retract” a statement of guidance from the College Sports Commission (CSC).

In the letter, according to Dellenger, Kessler describes the guidance as “not consistent” and “undermining” settlement terms.

On Thursday, the CSC issued guidance on NIL deals, indicating a stricter stance on arrangements involving collectives and a focus on “valid business purpose.” Kessler’s argument is that collectives should not be treated any differently than other businesses.

“There is nothing in the Settlement Agreement to permit (NCAA and conference) or the CSC, acting on their behalf, to decide that it would not be a valid business purpose for a school’s collective to engage in for-profit promotions of goods or services using paid-for student-athlete NIL,” the letter reads, according to Dellenger. “To the extent the NIL payment is for the promotion of a valid business purpose, it is irrelevant whether that payment comes from a NIL collective or any other third party.”

Dellenger writes that the letter was addressed specifically to the NCAA’s outside counsel, Rakesh Kilaru, the organization’s lead attorney and one of the key designers of the settlement. Also copied on the letter were the general counsels of the Big Ten, Big 12, SEC, ACC and Pac-12 — all named defendants in the case.

Attorneys are planning to bring the issue before Judge Nathanael Cousins, Dellenger reports. Cousins is the appointed magistrate in the settlement and has been appointed to resolve such disputes.

“We urge the CSC to retract the July CSC Memorandum and clarify that the valid business purpose requirement applies to NIL collectives in the same manner as any other entity,” the letter reads.

The NCAA told Yahoo Sports they had “no role” is the CSC’s decision, while the CSC sent Yahoo Sports the following statement when asked to address the letter they received from Kessler.

“The guidance issued by the College Sports Commission yesterday is entirely consistent with the House settlement and the rules that have been agreed upon with class counsel. The defendants have been in close coordination with class counsel on the key provisions in the memo and will continue to work with them to resolve any concerns they may have.”

Kessler disagrees. In the letter, according to Dellenger, Kessler notes that the “valid business purpose” rule in the settlement “was meant to prohibit NIL collectives from simply receiving donations and paying athletes for play.

“It does not, however, prohibit a NIL collective from paying athletes itself — not as a marketing agent for others — if the payment is ‘for a valid business purpose’ related to the promotion or endorsement of goods or services provided to the general public for profit.”

Some of the collective deals paid athletes to attend autograph signings or make event appearances for payment — all of which should be deemed legal, according to the letter.