On July 24, 2025, former President Donald Trump issued a sweeping executive order to tackle what he described as the escalating chaos in college athletics—including unchecked NIL payments, diverging state laws, and growing legal challenges. Among its key directives:
- Clarify whether college athletes are university “employees”, by directing the Department of Labor and the National Labor Relations Board (NLRB) to issue guidance or regulations. This move supports the long-held NCAA stance that athletes should remain amateurs.
- Ban third-party “pay-for-play” NIL deals, while allowing fair-market-value endorsements. This restricts booster-driven payments aimed at recruiting and gives schools control over compensation.
- Safeguard women’s and non-revenue sports by urging high-revenue athletic departments to maintain or increase scholarship and roster commitments for these programs.
- Prompt executive agencies—including the Education Department, DOJ, FTC, and HHS—to develop a plan within 30 days for regulatory or enforcement actions. This could include leveraging federal funding or litigation authority. The Washington Post
Why This Matters: Legal & Labor Implications
▶️ Amateurism vs. Employee Classification
Under the Biden Administration, the NLRB’s general counsel signaled that college athletes could qualify as employees—potentially opening the door to unionization and labor protections. Trump’s order, by contrast, pushes agencies to clarify that athletes are not employees, reinforcing amateurism. The stakes are high: if athletes are deemed employees, schools might owe wages, benefits, and Workers’ Compensation—and face collective bargaining.
▶️ Controlling NIL Payments and Antitrust Risks
Without standard federal rules, donor-driven “bidding wars” for athletes have proliferated, especially in football and men’s basketball. Trump’s order directly targets these practices by banning third-party inducements and advocating low-value, performance-linked payments tied to competition equity. This aims to preserve program balance and long-term sustainability.
Protecting Non-Revenue and Women’s Sports
When athletics budgets spike to accommodate mega NIL deals, lesser-known sports often lose funding. The executive order steps in, calling for schools generating more than $50M or $125M in athletic revenue to maintain or increase scholarship investment in non-revenue and women’s Olympic sports.
Broader Legal Landscape
- 2021 Supreme Court ruling: Banned NCAA caps on education-related benefits under antitrust.
- NCAA settlements: Schools can now directly pay athletes, and a $2.8B settlement allows for institutional revenue-sharing up to ~$20.5M per school annually.
- State-level NIL laws: Over 30 states have enacted divergent rules, creating a chaotic, inconsistent legal patchwork.
Key Takeaways
| Issue | Trump EO Response | Legal Effectiveness |
|---|---|---|
| Athlete Employment Status | Directs DoL/NLRB to define athletes as not employees | Symbolic; enforceability awaits agency action |
| NIL Deals | Bans booster “pay-for-play”; permits fair-market endorsement payments | Relies on regulatory follow-up |
| Equity in Sports | Mandates support for non-revenue/women’s sports via scholarships | Aspirational unless enforced |
| Antitrust Protection | Calls on AG & FTC to defend NCAA | Dependent on legal strategies |
Considerations for Students, Athletes, and Advisors
- If you’re a college athlete, watch for incoming agency guidance—it could shape your rights, compensation, and protections.
- Schools and boosters should reevaluate NIL practices, especially if you participate in or fund third-party deals.
- Lawmakers and advocates should view this as a call to finalize legislation (like the SCORE Act)—clear rules will provide stronger, more stable protections than guidance alone.
At Employees First Labor Law, we monitor these developments closely—whether you’re an athlete, coach, or school administrator navigating evolving NIL rules, employment status, or equity protections, understanding this landscape now can inform your next move.
