When the House vs NCAA settlement was reached, one of the biggest reasons why member schools signed off was because of the establishment of the College Sports Commission. The CSC's main mission is to police revenue sharing and NIL deals. On Tuesday, 18 Nebraska football players became the first to take a potential ground-shaking shot at the NIL Clearinghouse's authority.
According to Yahoo! Sports' Ross Dellenger, these nearly two dozen Huskers are challenging more than a million dollars of third-party NIL deals rejected by the CSC. In doing so, the Nebraska football players are the first group of athletes to significantly advance in the industry's new arbitration process.
The university has retained Husch-Blackwell, a well-regarded law firm that has branches all over the US, to represent the players. The clearing house has notably fallen behind in approving the deals submitted to it (mainly because it only has a staff of 15). Dellenger said his sources told him the Cornhuskers players might be the first to push for arbitration over rejected deals, but certainly won't be the last.
Nebraska football's 18 players are setting a precedent in the NIL Clearinghouse arbitration process
Still, this case of 18 players will be precedent-setting for an industry adjusting to this new system. A neutral arbitrator — selected by the House plaintiff attorneys and the NCAA lawyers — is presiding over the case. The process is expected to take no longer than 45 days, but should the players lose their arbitration case, it may not be the end. In fact, should they lose out, there's one more step that could be even more earth-shattering in that it would once again severely undermine the NCAA's ability to enforce its own rules.
If an arbitrator upholds the CSC's rejections, the players must decline the compensation of the rejected NIL deals or return the payment if already paid. If the player does not, they are ruled ineligible. 18 Nebraska players all getting ruled ineligible at the same time would obviously have a crippling effect on head coach Matt Rhule's program.
The severe blow is why Nebraska's attorney general may get involved. A law recently passed by the state legislature prohibits an association or institution from penalizing athletes for participating in NIL or receiving compensation.
At the heart of this conflict is the university's deal with multi-media provider PlayFly. The CSC has ruled that organizations like PlayFly can't "warehouse" NIL deals in the way the clearing house alleges was done with these 18 players.
Earlier this winter, NU became the second school to get scolded by the CSC and officially became embroiled in a compliance investigation. That issue was reportedly settled, though it's likely the school's compliance with the clearing house was part of the reason these NIL deals were rejected, and this new phase began.
The names of the 18 Nebraska players at the center of this arbitration case have not been released.