The U.S. Department of Education’s Office for Civil Rights issued a pivotal memo on Thursday addressing the intersection of Title IX and Name, Image, and Likeness (NIL) revenue-sharing payments in collegiate athletics. The nine-page document has clarified longstanding questions about how schools must ensure compliance with federal gender equity laws when distributing NIL-related financial assistance to athletes.

Title IX, enacted in 1972, prohibits sex-based discrimination in any educational institution receiving federal funding. This landmark law mandates that schools provide equitable treatment, resources, and benefits to male and female athletes. The memo, released on January 16, reaffirms that revenue-sharing payments from schools to athletes based on NIL rights must adhere to these principles, potentially disrupting current plans for how such funds are allocated.

Revenue Sharing Classified as Financial Assistance

In the memo, the Department of Education categorizes revenue-sharing distributions as a form of “financial assistance,” much like scholarships or grants. As a result, these payments must be proportionally divided between male and female athletes to avoid violating Title IX. This classification underscores the need for institutions to balance their NIL-based compensation programs to ensure equity across genders.

“When a school provides athletic financial assistance in forms other than scholarships or grants, including compensation for the use of a student-athlete’s NIL, such assistance also must be made proportionately available to male and female athletes,” the memo stated.

This new interpretation could pose significant challenges for athletic departments, particularly at institutions with high-revenue sports like football. For the 2025-26 academic year, schools will be subject to a revenue-sharing cap of $20.5 million, contingent on the approval of the House v. NCAA settlement this spring. Many schools had initially planned to allocate $15 to $17 million of this total to football programs, with the remaining funds spread across other sports. The Department’s guidance, however, requires schools to revisit these plans to ensure compliance with Title IX.

Implications for Athletic Departments

Athletic departments, already grappling with NIL-related reforms, must now address how to fairly distribute revenue-sharing payments across male and female sports. This could involve reducing the disproportionate focus on high-earning men’s sports, such as football and basketball, and reallocating funds to women’s programs.

Legal experts suggest that this guidance will force schools to rethink their NIL revenue-sharing strategies entirely. Boise State legal scholar Sam Ehrlich commented that the ruling could be a turning point for NIL policy in collegiate athletics. “This is not just about compliance but about fundamentally reshaping how schools approach NIL revenue-sharing in a way that aligns with the principles of Title IX,” he noted.

Exemptions and Third-Party Compensation

The Department’s memo also clarified that Title IX requirements do not extend to NIL compensation provided by third parties, such as endorsement deals with private companies. These payments, which often represent a significant portion of an athlete’s NIL earnings, are considered separate from institutional financial assistance. As such, third-party deals will remain unaffected by this guidance, leaving athletes free to negotiate agreements without schools needing to ensure proportionality.

Broader Impacts on College Athletics

The new guidance is expected to cause a ripple effect across collegiate sports, altering the financial landscape for athletes and institutions alike. Sources close to the matter have indicated that this shift will require schools to collaborate more closely with compliance officers and legal experts to avoid penalties for Title IX violations. Moreover, it highlights the growing complexities of managing NIL policies, which continue to evolve as athletes gain more financial autonomy.

As the NCAA and its member institutions navigate these changes, the memo serves as a reminder of the federal government’s commitment to gender equity in education. For schools, the challenge will be balancing the competing demands of compliance, athlete compensation, and financial sustainability in an increasingly competitive athletic environment.