NIL Go or No Go?
What is NIL Go? NIL Go is a tool developed by Deloitte to allow athletes to determine whether their NIL (Name, Image, Likeness) deal fits into the definition of fair market value. NIL Go, launched on June 11, functions as a centralized review and compliance system for student-athletes and reps to report third-party NIL agreements valued at $600 or more. The system aims to ensure that these deals adhere to fair market value standards (and are not disguised recruitment incentives). Reports must be submitted through NIL Go, which will be overseen by the newly established College Sports Commission (the "CSC"). The CSC may impose penalties—including loss of eligibility—if athletes proceed deals that are not cleared and approved on the system.
What will students need to report on NIL Go?
Student athletes will need to report all NIL deals worth $600 or more on the NIL Go platform, regardless of whether their school participates in the newly established revenue-sharing program, established as part of the House settlement. Each NIL deal gets reviewed and scrutinized to ensure it represents fair market value and isn't being used to go around other rules and regulations. Students must also continue to comply with NCAA regulations including maintaining enrollment status, making progress toward degree completion, meeting sport-specific academic standards and adhering to amateur status requirements. And while the recent House settlement allows schools to pay student athletes in a revenue share arrangement regardless of whether a school participates in the revenue share, students must report all deals via NIL Go.
It's an Algorithm, so.......
Deloitte has not revealed the inner workings of the NIL Go system, however, we can assume that it will rely pretty heavily on algorithmic assessment tools which will in turn, rely heavily on some sort of AI. This raises questions about the role of artificial intelligence in determining "fair market value" in NIL deals. Artificial Intelligence ("AI") has utility when analyzing thousands of pieces of data. It would be nearly impossible to manually review thousands of NIL deals efficiently. Ideally, using an algorithm would allow for uniformity across submissions and reduce risk of human bias. AI has been successfully deployed to identify market trends which could lead to more accurate fair market value assessments.
However, on the flipside, the use of AI to evaluate NIL deals raises concerns about algorithmic bias. What is algorithmic bias? Algorithmic bias refers to systematic errors in machine learning algorithms that produce unfair or discriminatory outcomes or reinforces existing biases (socioeconomic, racial etc...).
NIL Go and the Risk of Algorithmic Bias
AI learns from data. In the context of sports marketing, if the endorsement deals on which NIL Go evaluates market value have undervalued athletes from certain backgrounds, demographics or sports then that algorithm may perpetuate those disparities. Big rev share sports like football and basketball have historically commanded larger endorsements than most other sports. An AI trained on this data could undervalue other sports in other categories.
Other concerns ? Geographic – market value assessments might discriminate based on location, school size etc... Subjective – It will also take into account other subjective variables such as social media presence or historical data, which could result in reinforcing existing inequalities. Like most AI, there is the proverbial "black box" – if the algorithm is confidential or proprietary it will be very difficult to know exactly how decisions are made or deals evaluated. Deloitte has a confidential 12-factor fair market value rubric that they use to evaluate deals.
Tips and Tactics
Student athletes should understand the NIL Go submission and evaluation criteria as well as the appeals process if a deal is denied. Creating relationships with compliance professionals, lawyers, and other trusted advisors who are not only aware of the system but the compliance issues affecting NIL deals is also key to avoiding mistakes. Other laws, regulations and rules apply as well and several states have related laws that will or could affect an NIL deal. Institutions can provide training and support for athletes and can monitor outcomes for potential disparate impact on student populations. Athletes and institutions alike should understand the complex legal landscape around this emerging area.
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