This week saw yet another shift in the world of college athletics. This time it came through an executive order from Georgia Governor Brian Kemp that creates a path for colleges and universities to directly compensate student-athletes for the use of their name, image, and likeness (NIL).

Kemp’s order prohibits the NCAA and athletic conferences from taking adverse action against a post-secondary educational institution in Georgia for "facilitating compensation, offering compensation, or compensating an intercollegiate student-athlete for the use of such student-athlete’s NIL." However, no post-secondary educational institution can use state allocated funds for NIL compensation.

Still, the order creates the potential for significant recruiting, retention, and competitive advantages for Georgia colleges and universities — including public and private Division I, II, and III schools and HBCUs — as other states await the outcome of the ongoing negotiations in House vs. NCAA.

The proposed $2.78 billion House settlement seeks, among other things, backpay for certain student-athletes for lost NIL revenues from television, video games, and other third-party dealers prior to 2016. The proposed settlement agreement would also create a revenue-sharing model for compensating student-athletes for the use of their NIL beginning in the 2025-2026 academic year. However, as discussed more below, the draft House settlement is far from final form or actual implementation. The Georgia executive order is effective immediately.

Here are some key takeaways on what the order means for Georgia colleges and universities going forward, including the latest updates on the House litigation.

Georgia's NIL Executive Order

The order was issued on Tuesday and is aimed at addressing what Kemp (and others) have identified as a "patchwork of inconsistent rules regulating intercollegiate athletics."

Student-athletes in Georgia "should compete on a level playing field and not forgo compensation" available to them in other states while the House settlement is pending, Kemp’s order states.

So Kemp’s order will remain in effect only until a formal settlement is reached in House or until federal legislation is passed to regulate student-athlete NIL compensation.

Kemp’s order is similar to legislation in Virginia. The new law, which went into effect on July 1, also gives schools in Virginia the legal protection to directly compensate their student-athletes for NIL deals without facing NCAA penalties. And interestingly, Missouri has a state law that allows schools to pay third parties who then pay student-athletes for NIL opportunities, but that law is nowhere near as permissive as the executive order or law in Georgia and Virginia.

Latest Updates on House Litigation

Kemp’s order points to the proposed House settlement as a potential terminating event for the new Georgia guidance. The proposed settlement represents a landmark shift in college athletics, reshaping NIL rights and signaling the realistic end of the NCAA’s battle-worn amateurism model for Division I athletics. It is not without controversy, with several challenges having been filed and initial concerns expressed by the presiding judge.

In House, class-action status was granted to around 15,000 athletes affected by the previous NCAA NIL restrictions. The class of athletes is limited to those who competed in 2016 or after.

On September 5, Judge Claudia Wilken held a preliminary approval hearing, during which she declined to grant preliminary approval of the settlement. She sent the parties "back to the drawing board" to discuss and address several concerns, including the settlement’s purported regulation of NIL collectives and how student-athletes are compensated moving forward.

The parties agreed to attempt to revise the settlement terms in the coming weeks, but a lack of consensus could result in termination of settlement discussions, sending the consolidated cases to trial.

Key Takeaways for College Administrators

Beyond seeking backpay for NIL, some student-athletes may be eligible to receive a capped revenue share distribution from their NCAA Division I athletics department if the House settlement (in its new form) is approved and implemented. In the meantime, however, Georgia colleges and universities of all sizes now have the option to facilitate, offer to compensate, or directly compensate student-athletes for the use of their NIL. While the executive order is temporary in nature, it provides Georgia schools and student-athletes with some pathway as they anxiously await more permanent, nationwide solutions.

Athletics administrators in Georgia must now grapple with decisions related to student-athlete compensation in the absence of an overarching federal regulatory scheme. School personnel must remain cognizant of the executive order’s prohibition on using funds allocated by the State of Georgia for NIL compensation and should carefully determine which, if any, funding sources will be used to pay student-athletes. In cases where schools do choose to fund NIL activities, administrators should be mindful and consult legal counsel about potential Title IX liability that may result from inequitable distribution of those payments to men’s and women’s teams and male and female athletes. Additionally, schools should consider whether they want to be involved in directly compensating student-athletes, or instead partner with collectives or donor groups to handle direct payments to student-athletes. We also strongly advise working proactively with counsel on related legal issues such as media rights agreements, funding, development, and revenue generation, and employment-related issues for student-athletes.

While fall sports are already well underway, this week’s executive order provides recruiting and retention advantages for Georgia higher education institutions by positioning the state as one of only a few across the country to have taken an affirmative legislative position on student-athlete compensation. Athletics administrators should consider whether and when to introduce student-athlete compensation to their athletics departments, and compliance staff should be poised to review increased numbers of NIL deal submissions in the coming months.

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