NIL glossary
What is a valid business purpose in NIL Go?
A valid business purpose, in NIL Go review, means a deal uses an athlete's NIL to promote or endorse goods or services that are provided to the general public for profit.
On this page
In detail
It is one of the two tests for deals with associated entities and individuals (the other is range of compensation). The "for profit" question asks whether the goods or services are sold for profit, not whether the company is profitable. Raising money to induce athletes to enroll or stay is not a valid business purpose, and deals must show real activation of the athlete's NIL rather than warehousing rights.
Deals with a nonprofit can qualify only if the money comes from the nonprofit and the athlete takes part in an activity whose main purpose is raising money for its charitable mission.
Frequently asked questions
Is pay for play a valid business purpose?
No. Money raised to get athletes to attend or play at a school does not satisfy the requirement.
Sources
- Student-Athlete NIL Deals — College Sports Commission
- Rules and Policies — College Sports Commission
- Frequently Asked Questions — College Sports Commission
This is general information, not legal advice. NIL rules differ by state, school, association and sport, and they change often. Check the official sources linked on this page and talk with your school's compliance office, your state association or a licensed attorney before you sign anything.