Valid Business Purpose

Valid business purpose is one of two tests a third-party NIL deal must pass to clear NIL Go. The payment has to be for genuine promotion or endorsement of goods or services provided to the general public for profit. Paying an athlete simply for being on a roster does not qualify.

Q. What does a valid business purpose look like?

A local restaurant paying for an appearance and a set of social posts. An apparel brand paying for a campaign. In both cases the business is selling something real, and the athlete’s name, image and likeness is being used to help sell it.

Q. What doesn’t qualify?

A payment from an entity whose only real purpose is to pay athletes. That was the Commission’s original position on many collectives, and it is the point that has generated the most dispute since launch.

Q. Is this about the amount of money?

No, that is the separate range of compensation test. A deal can have a perfectly valid business purpose and still fail because the price is out of line.

Q. Who decides?

The College Sports Commission, through NIL Go review.

Q. Has the standard changed since it launched?

Yes. Guidance has been revised, particularly around collective payments, so it is worth checking current guidance rather than relying on early interpretations.