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In a much-anticipated decision, on May 11, a neutral arbitrator upheld the College Sports Commission's (CSC) rejection of NIL agreements for 18 University of Nebraska (UN) football players worth more than $7.5 million in total. This is the first time the CSC's enforcement framework, which was created to implement and police compensation rules adopted after the House v. NCAA settlement, has been publicly tested and upheld in arbitration.1
The CSC was established to facilitate revenue-sharing in college sports and to regulate collegiate name, image, and likeness (NIL) deals following the House settlement. One of the CSC's primary functions is to evaluate NIL deals between athletes and third parties to determine whether they are legitimate endorsement opportunities priced at fair market value.2
The UN Football players were the first to challenge the CSC's rejection of their proposed NIL deals via arbitration. 18 players entered into NIL agreements with Playfly Sports, a marketing firm that partnered with UN in 2022 to pay the university more than $300 million for usage of its multimedia rights over 15 years.3 The CSC found these NIL deals to be improper on the grounds that, under the heightened scrutiny afforded “associated entities” like Playfly, these deals constituted "warehousing," meaning payments to players for amorphous work not tied to specific tasks or services, and therefore lacked a valid business purpose.4
The neutral arbitrator found that the CSC properly determined that Playfly is an associated entity, a term originating from the House settlement that is defined as a third party affiliated with a university that exists primarily to promote that university's sports or to create NIL opportunities.5 6The arbitrator further found that the CSC properly denied the NIL deals at issue based on a lack of a valid business purpose, writing that: "Playfly appears to be guaranteeing certain payments to each student-athlete in exchange for performance of as-yet unspecified services that it hopes to sell in the future to some as-yet unidentified sponsor on an as-yet unidentified date, in promotion of an unidentified good or service for sale to the general public."7
This arbitration decision comes at a crucial moment for the CSC's enforcement authority and in the broader context of the evolving NIL system in college sports. There is an upcoming hearing on May 27 in the House matter before the House settlement administrator, US Magistrate Court Judge Nathanael Cousins in the Northern District of California, concerning whether multimedia rights companies (MMRs) like Playfly count as associated entities within the meaning of the settlement.8
While this decision is the first supporting the CSC's authority, it may lead to further legal challenges. The Nebraska State Attorney General, Mike Hilgers, previously stated that if the CSC won this arbitration, his office would file a lawsuit challenging the result under a Nebraska law that prohibits associations from penalizing athletes for participating in NIL.9 Nebraska's NIL law is not unique: Alabama, California, Georgia, New Jersey, Mississippi, Missouri, Texas, Tennessee, and Virginia have similar statutes limiting the NCAA's ability to regulate NIL activity, and we should expect similar threats of AG litigation to arise where resident athletes of these states are subject to adverse CSC rulings. At a minimum, the world of NIL enforcement remains in flux.
Steptoe's Sports Integrity Team advises clients across the college sports landscape in NIL contracts and enforcement. Check our website for continued alerts about this and related developments in collegiate sports.
Footnotes
1. Dan Murphy, CSC Wins NIL Arbitration Case Brought by Nebraska Football Players, ESPN (May 11, 2026), https://www.espn.com/college-football/story/_/id/48745201/college-sports-salary-cap-rules-upheld-arbitration-case-brought-nebraska-football-players.
2. College Sports Commission, Student-Athlete NIL Deals, https://www.collegesportscommission.org/nil.
3. Oliver Vandervoot, Nebraska Just Took an NIL Loss that Could Rattle College Sports, Husker Corner (May 11, 2026), https://huskercorner.com/nebraska-football-nil-arbitration-csc-playfly-ruling.
4. 18 Student-Athletes on the University of Nebraska-Lincoln Football Team v. The College Sports Commission, CSC Case No. 2026-002 (May 11 2026), https://assets.tina.io/29b83311-e587-42b1-861e-87ebde9aa253/May%2012%20-%20Final%20Neutral%20Arbitration%20Decision%20in%20Playfly-Nebraska%a20Matter.pdf.
5. House v. NCAA, No. 4:20 cv 03919 (N.D. Cal. June 6, 2025)
6. College Sports Commission, Student-Athlete NIL Deals, https://www.collegesportscommission.org/nil.
7. 18 Student-Athletes on the University of Nebraska-Lincoln Football Team v. The College Sports Commission, CSC Case No. 2026-002 at 13, (May 11 2026), https://assets.tina.io/29b83311-e587-42b1-861e-87ebde9aa253/May%2012%20-%20Final%20Neutral%20Arbitration%20Decision%20in%20Playfly-Nebraska%20Matter.pdf.
8. See Michael McCann, The NCAA House Settlement is Suddenly Unsettling, Sportico (May 11, 2026), https://www.sportico.com/law/analysis/2026/ncaa-house-settlement-multimedia-rights-nil-dispute-1234892391/.
9. See Neb. Rev. Stat. § 48-3603.
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