Arbitrator upholds College Sports Commission's ruling in Nebraska NIL case

A group of 18 Nebraska football players has seen their NIL arbitration case with the College Sports Commission denied, in a landmark challenge to the enforcement power. A neutral arbitrator has issued a final, binding decision affirming the College Sports Commission’s application of the rules in connection with third-party NIL agreements between Playfly and Nebraska athletes, according to a CSC press release on Monday night.

The CSC, the body tasked with enforcing revenue-sharing and NIL regulations, previously rejected over-the-cap deals submitted this offseason by 18 current Nebraska players through the NIL Go clearinghouse.

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The rejected Nebraska deals involve payments to the players via Playfly, which partnered with Nebraska in 2022 to pay the school more than $300 million for usage of its multimedia rights over 15 years. In December, Playfly agreed to redirect $10.25 million – including approximately $8 million by June – to NIL payments.

The CSC classifies Playfly and other multimedia rights holders, such as Learfield, as associated entities. An associated entity is defined as a third party affiliated with a university that exists primarily to promote that school’s sports or to create NIL opportunities.

“We are pleased with the arbitrator’s decision to affirm the CSC’s fact-based application of the rules,” said College Sports Commission CEO Bryan Seeley in a statement. “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. We hope and expect that the student-athletes will submit new deals that comply with the rules, so we can promptly review them.”

Now comes a potential other test for the College Sports Commission. The Nebraska state Attorney General Mike Hilgers could get involved. He previously said he would file a suit if the CSC won. A law in Nebraska prohibits associations from penalizing athletes for participating in NIL. On3 reached out to the attorney general’s office on Monday night for comment.

The arbitrator upheld the CSC’s application of the rules based on Playfly meeting the definition of an associated entity, the deals not satisfying the valid business purpose rule and the deals not including the direct activation of athletes’ NIL rights. The arbitrator did not find for either party on the issue of whether the deals were at rates and terms commensurate with compensation paid to similarly situated individuals.

“I am proud of our football student-athletes and how they represented themselves during this process and the patience they have shown,” Nebraska athletic director Troy Dannen said in a statement. “We continue to operate within the parameters of the House settlement and 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.”