How arbitration works as NCAA, College Sports Commission handles NIL conflict

• The College Sports Commission (CSC) arbitration process evaluates deals based on factors like business purpose and fair-market value.
• A recent case involving 18 Nebraska athletes was struck down, but they can resubmit their deals with modifications.
• Some agents and executives may avoid submitting deals that could face extra scrutiny to the NIL Go platform.

Never forget: Arbitration is an option.

That’s the perhaps oft-overlooked element in the ongoing debates surrounding student-athlete compensation beyond House Settlement revenue sharing in the current NCAA landscape.

The College Sports Commission, via its third-party NIL Go platform, gives the option to request arbitration in the scenario in which an NIL proposal initially is denied.

It’s one of three formal options available available for student-athletes, their representatives (if applicable) and their schools in those circumstances:

1.        Accept denial

2.        Resubmit the deal with modifications

3.        Go to arbitration, which features a single arbitrator from the eight-person panel of arbitrators first selected for participation via a three-year term at the onset of the House Settlement in June 2025.

There are “three buckets” for considering a deal and potential arbitration: associated status, valid business purpose and range of compensation. A variety of factors - a student-athlete's public and social media profile, a school's size and media market, profile of the sport/team - contribute to the evaluation of whether a deal is structured with a "fair-market" value.

What once was 21 arbitration cases earlier this year then morphed into three when Nebraska’s 18 student-athletes filed as one collective party. The Nebraska athletes' bid for arbitration was struck down May 11.

Now, the CSC arbitration load has dwindled to two cases as of late-May, per CSC data. An athlete with a rejected deal must file an arbitration request within 14 days of a deal's rejection or forfeit that option.

The defendants and plaintiff counsel select the arbitrator from the eight-person panel, a group selected by the lawyers in the initial terms of the House Settlement. Members of the arbitration group "are subject to removal and replacement upon agreement of the Class Counsel and Defendant."

An unofficial additional option, student-athlete agents and college personnel executives familiar with the process tell USA TODAY Sports, is simply to not submit a potential deal that might draw extra scrutiny for review by the NIL Go platform.

Two power conference personnel executives and three agents representing players offered their transparency on the situation on condition of anonymity. 

The arbitration process, in general, also is supposed to be confidential, though the Nebraska athletes lost their arbitration case May 11. It was ruled that the CSC/NIL Go had properly enforced the parameters from the House Settlement when it determined PlayFly, Nebraska’s multimedia rightsholder, was both an associated entity and also had sought to “warehouse” student-athletes’ likenesses – something specifically barred by the House Settlement.

“We are pleased with the arbitrator’s decision to affirm the CSC’s fact-based application of the rules,” CSC CEO Bryan Seeley said in a statement obtained by USA TODAY Sports on May 11. “This process shows the system is working as intended: a decision we made was challenged and a neutral arbitrator assessed the facts to inform a final decision.”

However, the Nebraska athletes can resubmit the deals with different terms for the proposal and no ruling was issued on whether the proposed rates of pay were commensurate with the student-athletes’ profiles and Nebraska media marketplace. 

If a case goes to arbitration, either side has the option to petition witnesses into the hearing.

Otherwise, per an individual with direct knowledge of the arbitration procedures, “It’s meant to be a very quick process, completed within 45 days unless the arbitrator requests to extend. Generally, student-athletes are engaging counsel and there is a back-and-forth between student-athletes’ counsel and CSC’s counsel.”

The CSC has repeatedly stressed that it has worked to foster an environment of transparency. 

Another legal showdown looms June 10 with a hearing in California’s Northern District Court that sees the plaintiffs arguing that the CSC is overstepping its purview with its definition of “associated entities,” particularly as it pertains to multimedia rights companies. 

How the court rules that day is likely to dictate the volume of arbitration cases in the immediate future.