NCAA Athlete Compensation in Georgia: A New Era of College Sports

The landscape of college athletics is undergoing a seismic shift, particularly concerning how student-athletes are compensated. This article delves into the evolving rules and regulations surrounding NCAA athlete compensation, with a specific focus on the implications for Georgia's colleges and universities. From landmark legal settlements to state-level legislation, the path toward compensating athletes for their name, image, and likeness (NIL) is complex and rapidly changing.

The House Settlement: A Multibillion-Dollar Game Changer

A pivotal moment arrived with a federal judge's approval of the multibillion-dollar class-action legal settlement known as House v. NCAA. This settlement arose from three different lawsuits addressing compensation for collegiate athletes. The plaintiffs comprised approximately 390,000 current and former college athletes, while the defendants included the NCAA and five of its athletic conferences. Looking back, the NCAA and schools have agreed to pay $2.75 billion to former college athletes who played before 2021, the year the NCAA changed its rules to allow players to sign licensing agreements to earn money from their name, image, and likeness rights, known as NIL.

Starting this fall, colleges and universities in the NCAA's top division will be allowed to directly pay athletes for the first time. This marks a significant departure from the traditional amateur model that has defined college sports for over a century. Payments will be limited by a salary cap initially set at $20.5 million per school. The approval of the settlement "marks a huge step forward for college sports," said NCAA President Charlie Baker.

The settlement puts in place a new system that allows schools to pay players directly. Schools will be able to decide which players to pay and how much to pay them. The settlement also sets a salary cap. For each school, player compensation across all sports will count against a cap initially set at $20.5 million and that could rise as high as $33 million in 2035. Also new are roster limits, which replace the traditional scholarship limits for each sport.

Around half of the NCAA's 365 Division I schools are expected to adopt the new framework, either because their conferences - the SEC, ACC, Big Ten, Big 12 and PAC-12 - are named as defendants and they are required to comply with the settlement or because they are expected to opt in to its terms, according to court documents filed by lawyers negotiating the settlement.

Georgia's NIL Law: Paving the Way for Athlete Compensation

Georgia has been proactive in addressing the issue of NIL compensation for college athletes. Gov. Brian Kemp signed House Bill 617, making Georgia one of the many states joining the movement of allowing athletes to receive compensation for their Name, Image, and Likeness (NIL). Starting on July 1, 2021, Georgia athletes can profit from NIL through endorsements, sponsorships, social media marketing, personal appearances, autographs, and other uses of their name, image, and likeness.

While state of Georgia NIL laws will have yet to be seen long-term implications, the immediate shift in NCAA rules means college athletes can start making money now. But how? Because the new guidelines have created a gray area, lawyers and athletes from different states are sorting out what NIL can look like for them. One thing is for sure: Georgia athletes don’t need to wait before beginning to take advantage of the new opportunities that come from the state of Georgia NIL rules.

Currently, the NCAA reports that the NIL rules are temporary until Congress creates clearer regulations through national laws. Until that happens, state laws will rule the NIL landscape, meaning University of Georgia athletes, Georgia Tech athletes, Kennesaw State athletes, and all other NCAA student athletes can profit from their NIL.

Unique Provisions of Georgia's NIL Law

The state of Georgia’s NIL law contains a few provisions that make it unique among the other states with NIL laws. One of these statutes gives Georgia schools the option to require that their student athletes share up to 75% of their NIL compensation. These “pooled” funds would end up in an escrow account to be entrusted to the athletic director of the school. Then, one year after the student has graduated, the athletes would be eligible to receive their pro-rata share of these funds. Even with this option, however, the University of Georgia has already shown disinterest and it’s expected that other schools will do the same.

The other unique provision in the state of Georgia NIL law is that the legislation requires universities to provide a minimum of five hours of financial literacy and life skills teaching as their students prepare to receive and handle the income from their NIL. While both of these provisions appear to be in the students’ best interest, it’s up to the individual Georgia schools to determine how they will act upon them.

Read also: The Dynasty of Excellence

Partnering with Georgia Athletes: Opportunities for Businesses

For business owners who want to know how can my company partner with a UGA athlete, it’s important to first understand the basics of NIL. When you’re looking for athletes to represent your brand, you want those who are available and recognizable. Available means that it’s best if the athletes haven’t signed with other brands and therefore diluted your advertising power. Recognizable means you want the best athlete for your specific business-whether that student is nationally or locally known is dependent on your goals.

The University of Georgia has already seen quarterback Brock Vandagriff sign an endorsement deal with Onward Reserve apparel, as well as running backs Zamir White (Z3 Chosen One) and Kendall Milton (KM2) each release trademarked logos on social media. These are just the beginning. If you are a brand that wants to partner with UGA athletes, Icon Source can help connect you to your ideal brand ambassador.

What UGA Athletes Should Know About Georgia NIL

The University of Georgia has led the way on making sure their student athletes are taken care of when it comes to Georgia NIL laws. UGA announced that they would partner with Altius Sports Partners, an NIL advisory and education firm, to educate student athletes at Georgia on what it could look like to profit from their name, image, and likeness and how to handle the unique benefits and challenges that come with it.

Josh Brooks, University of Georgia athletic director, explained, “I’m thrilled to be able to offer this educational and personal development opportunity to all our student-athletes in advance of the expected NIL changes in collegiate athletics.”

If you’re an athlete looking to find a sponsor to partner with and profit off of your NIL, it’s important to connect yourself with a group that can provide you the resources you need as you navigate this complicated market. Student athletes already have their days full of academics, sports activities, and studying. NIL is only going to add to those everyday burdens. With Icon Source, student-athletes can manage their profiles on a single mobile app-which sends all required reporting data directly to the school, or to the school's desired disclosure software.

Read also: Choosing Your UGA Major

And what about taxes? No matter how many deals, large or small, that an athlete completes on Icon Source, they will be provided a single 1099. Most importantly, Icon Source forces brands to use a single contract, non-editable, which protects the students from unforeseen issues.

Founded by NFL veteran and University of Georgia alum, Drew Butler, Icon Source is leading the way in helping athletes make the most of their NIL while also partnering with brands to ensure the creation of mutually-beneficial relationships between athletes and companies.

Georgia Tech and NIL Opportunities

Georgia Tech wide receiver Marquez Ezzard is among the first to take advantage of new Georgia NIL laws, which he did by representing a designer underwear brand. Ezzard is not alone. Safety Juanyeh Thomas, basketball player Dallan Coleman, and Kenyatta Watson have joined Ezzard in representing PSD, described as affordable designer underwear.

Also, football players Miles Brooks and Tariq Carpenter (along with Watson and Coleman) struck deals with Yoke, a video-game app that lets fans play video games against athletes. For PSD, all it took was a direct message on Instagram to attract Ezzard’s attention. Seeing as he was already a fan of the brand, getting him to come on board and use his name, image, and likeness to support their company was a simple next step.

This method points to the simplicity that can happen when brands know the type of athletes that would best fit their advertising objectives. If you work for a company that wants to know what athletes are available and recognizable, Icon Source can help you collaborate with Georgia Tech athletes.

The various brands that sponsor Georgia Tech athletes represent the many opportunities awaiting athletes looking to take advantage of Georgia NIL laws. From football standouts to walk-ons, there’s a place for every athlete to use their NIL to achieve their personal or financial goals. Whether an athlete is simply looking for free gear or a way to make some extra cash, or if they’re looking to turn their personal brand into a long-term business, there are opportunities to do both.

Kennesaw State and NIL: A Transparent Approach

When it comes to Georgia NIL law, Kennesaw State is one of many universities that have gone above and beyond in making it clear how Kennesaw State athletes can profit from NIL and what it takes for businesses to endorse Kennesaw State athletes. In their outline of Kennesaw State NIL policy, they make it clear that students must “disclose each potential agreement providing compensation for their NIL before entering into compensation agreements.”

That means for brands looking to partner with Kennesaw State athletes, it’s important to maintain a healthy level of transparency to ensure a positive relationship with the university. Of course, this is easier said than done, and it’s yet to be seen what can happen when a school disapproves of a student athlete’s choice of brand partnership.

Since the new Georgia NIL laws were announced, seven Kennesaw State athletes have endorsed brand partners-including three track and field athletes, two baseball players, a lacrosse player, and a volleyball player. All of these athletes are reportedly Barstool Sports Athletes, which is an example of a brand encouraging athletes to approach them in the hopes of creating a sponsorship relationship. While the details of each endorsement is uncertain, it’s clear that athletes from school all across the country have the freedom to take advantage of their state’s NIL laws however they see fit.

The Broader Implications of the House Settlement

The now-approved settlement covers three combined class action lawsuits brought against the NCAA: House v. NCAA, Hubbard v. NCAA, and Carter v. Approval of the House settlement came two months after a final hearing, in which Judge Wilken allowed student-athletes and attorneys to address issues and objections that were raised against the settlement. The settlement fund will be split into two funds, a $1.976 billion fund referred to as the “NIL Claims Settlement Amount,” and a $600 million fund referred to as the “Additional Compensation Claims Settlement Amount.” These two funds will be further divided and distributed based on the sort of injury class members suffered. Class members include all student athletes who were eligible and on a Division I team roster, regardless of the team or conference, between June 15, 2016 and September 15, 2024.

NCAA rules will be modified to permit schools who opt in to the settlement to provide additional direct benefits and compensation to Division I student-athletes that are worth up to 22% of the Power Five schools’ average athletic revenues each year, with yearly increases. Opting In: Division I schools that opt in must comply with the House settlement’s financial terms for directly compensating student athletes. The direct payment model allows for Division I schools to pay a portion of their revenue directly to student-athletes, with $20 million as the cap for the first year (2025-26). The pool cap increases annually over the 10-year term of the agreement, reaching a projected $32.9 million in 2034-35. The justification for these direct payments from schools is that money earned by schools via media deals stems from student-athlete NIL.

Importantly, the pool cap is the total money that will be distributed from schools directly to student athletes and does not include an athlete’s third-party NIL deals. However, if student-athletes are entitled to buyout payments under their agreements and elect to transfer to another school, then their transfer may trigger pool cap reductions. Pursuant to the House settlement, there are no longer limits to the amount of scholarship athletes a school that opts in can have on a team. For example, NCAA rules previously limited Division I football programs to 85 full scholarships but put no limit on roster numbers. As the settlement took shape, Judge Wilken expressed concerns that the roster limits would deny current athletes the right to continue to participate.

All NIL transactions with a total value of $600 or more must be reported by student-athletes and member institutions to the Commission. Reporting will be done via an online platform called NIL Go, which will be overseen by LBi Software and Deloitte. The Commission will be responsible for determining whether reported NIL payments from Associated Entities and Individuals are at fair market value. Thus, Associated Entities and Individuals must attempt to determine valuation based on other deals entered into by similarly skilled and similarly famous athletes. Organizations that are not categorized as “Associated Entities or Individuals” - e.g., athletic apparel, sports drinks, and other consumer brands - may enter NIL deals with student athletes, without the need to comply with the fair market value rule.

Although House was an antitrust suit, issues remain as to the NCAA’s status under antitrust law. The NCAA is seeking an antitrust exemption from Congress. Professional sports leagues have such exemptions, allowing the leagues to regulate players more easily. Although the NCAA has been lobbying Congress since 2021 on this issue with little progress, new draft legislation could give the NCAA the antitrust protection it has been seeking. Specifically, the draft legislation would prevent legal challenges to direct payments to athletes. The issue of employment status of student-athletes remains open. There are already challenges on the basis of Title IX following the House settlement.

Navigating the New Landscape: Challenges and Opportunities for Georgia Schools

Schools have been aware of the general contours of the House settlement and have been preparing for months following the announcement of the initial settlement. Many schools are exploring creative ways to brace themselves financially for direct payments to athletes beginning, including possibly spinning out different entities for their athletics programs, private equity financing, and other alternatives. For other schools, opting in may result in drastic measures such as eliminating certain varsity sports, or even reclassifying to a lower division, both of which have already occurred.

University of North Carolina Asheville announced its decision that it will not opt in to the settlement for the 2025-2026 school year, stating, “the revenue generated by our athletic department is essential for enhancing and sustaining various aspects of our program, including scholarships, sports medicine services, mental health resources, and more. Although athletic conference commissioners are reportedly confident in the Commission and its ability to successfully oversee enforcement, some critics are skeptical as to the effectiveness of the new enforcement arm. Although the House settlement imposes restrictions on payments by Associated Entities including collectives, it is unlikely that NIL collectives will take a back seat despite the settlement.

In a significant move, Gov. Brian Kemp signed an executive order allowing Georgia colleges and universities to pay athletes directly for NIL agreements without fear of sanctions from the NCAA or athletic conferences. The order was praised by school administrators and lawmakers as a way to help Georgia institutions remain competitive in the fast-evolving college sports landscape. The executive order builds on earlier legislation - House Bill 617 - which took effect in July 2021. That law formally legalized NIL compensation for student-athletes in Georgia, allowing them to sign sponsorships, endorsements, and other marketing deals. More recently, lawmakers have proposed Senate Bill 71, which would exempt NIL income from state income taxes. Supporters, including officials from the University of Georgia, say the tax break would make the state more attractive to top recruits by letting athletes keep more of what they earn.

Compliance will be overseen not by the NCAA, but by the major conferences and a third-party auditing firm, Deloitte. That means Georgia schools will now be accountable to a shifting landscape with fewer centralized rules - and potentially, more legal challenges. Georgia’s universities must also grapple with varying state laws on NIL, which could create inconsistencies and trigger further litigation. NCAA President Charlie Baker has called for federal legislation to unify the system and provide legal protections for the new model.

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