The landscape of college sports is about to get a jolt. The April 3, 2026 executive order, *Urgent National Action to Save College Sports*, is set to shake things up in a big way.
President Trump’s directive ramps up federal oversight in college athletics—especially around Name, Image, and Likeness (NIL) activities. It’s not just talk; this order builds on the July 2025 executive action, but shifts from vague policy to a strict, enforcement-driven approach that ties compliance to federal funding.
With August 1, 2026 looming, colleges, universities, collectives, and investors are feeling the heat. If they don’t get in line with the new rules, they could lose federal funding—no small threat.
Federal Funding and Compliance
Federal agencies handing out grants or contracts to universities now have to check if schools are following athletics rules. That means NIL, eligibility, transfers, revenue sharing—the whole nine yards.
The Office of Management and Budget (OMB) and General Services Administration (GSA) are in charge of making this happen. If a school doesn’t comply, it could get locked out of federal funding programs.
Eligibility and Transfer Limits
The order’s take on eligibility and transfers is a big deal. It pushes for national rules, overseen by an interstate athletic body, to limit athlete movement and keep things balanced—not just on the field, but in the classroom too.
- Limits college athletics participation to five years, with only narrow exceptions
- Bans former pro athletes from jumping back into college sports
- Allows just one immediate-eligibility transfer, and maybe one more after earning a four-year degree
- Requires transfers to happen outside of competitive seasons, so games aren’t disrupted
- Stresses the importance of academics and graduation
NIL Regulation and Restrictions
The executive order wants to get rid of pay-for-play setups but keep a smaller, market-based NIL system. Only fair market value for real commercial purposes is allowed, and it can’t depend on which school an athlete plays for.
- Bans “fraudulent NIL schemes”—like paying above market rates just for athletic participation
- Blocks knowingly accepting money from collectives or boosters involved in shady NIL deals
- Prohibits using federal funds for NIL or revenue-sharing payments
- Prevents meddling with a student-athlete’s contract with another school
Revenue Sharing Oversight
The order tries to keep football and basketball money from swallowing up resources that support other sports or research. It’s looking at revenue-sharing models that don’t gut scholarships or shrink opportunities in women’s and Olympic sports.
Regulation of Collectives, Agents, and Third Parties
Accountability in the NIL world is a big focus. The order cracks down on third-party actors by:
- Banning improper NIL activities by collectives or similar groups
- Calling for a national registry of student-athlete agents
- Protecting student-athletes from sky-high agent fees
The Federal Trade Commission (FTC) is also being pulled in. They’re supposed to enforce consumer protection laws, going after agents and others who push misleading NIL deals or make empty promises to student-athletes.
Federal Preemption and Litigation Strategy
The executive order wants to ditch the patchwork of state NIL laws for a single national rulebook. The Attorney General is told to challenge state laws that clash with NCAA and College Sports Commission (CSC) rules, block out-of-state commerce, or mess with contracts in a way that violates the Constitution or federal law.
Impact on Colleges and Universities
Colleges and universities are staring down a new set of risks. Athletic department practices could now affect whether a school keeps its federal grants and contracts.
- Revisit NIL policies and how they’re monitored
- Take a closer look at relationships with collectives, recruiting, and transfer policies
- Do a full NIL compliance check to see if deals are fair and for real commercial purposes
- Assess federal funding risks, especially schools with big research or contract portfolios
- Get ready for more reporting—financials, rosters, the works
Impact on Other Stakeholders
NIL Collectives, Sponsors, and Brands are facing a new level of regulatory risk. The “fraudulent NIL scheme” standard means compensation has to actually match fair market value and real commercial work.
With federal enforcement and FTC scrutiny likely, these groups should think hard about their current deals with schools and athletes. The government’s suddenly paying a lot more attention.
Private Equity and Investors are in for a bumpy ride too. More regulation and enforcement uncertainty means extra diligence is needed for NIL compliance, revenue-sharing models, and any funding dependencies.
That could change how investments are valued, structured, or even exited. Not exactly the stable environment investors usually prefer, right?
Student-Athletes are about to enter a more tightly controlled NIL world. Compensation structures are in the crosshairs, and eligibility and transfer flexibility could shrink, which means fewer earning opportunities.
The order kicks off a multiagency process that’ll probably lead to new guidance, proposed regulations, and maybe even congressional action. Could this finally stabilize college sports? Hard to say just yet.
Looking Ahead
These changes are going to play out right in the middle of ongoing lawsuits and shifting state laws. The NCAA and CSC are still trying to clamp down on pay-for-play deals and keep the new revenue-sharing rules—thanks to the House Settlement—on track.
All of this just adds more uncertainty to an already wild regulatory scene, at least for now. If you’re a stakeholder, it’s probably time to take a hard look at your legal risks, especially when it comes to antitrust, consumer protection, labor, and NIL compliance.
What should you actually do? Here are a few moves to consider:
- Conduct a thorough NIL compliance review to make sure you’re in line with fair market value and commercial purpose standards.
- Take a close look at your ties with collectives, agents, and third parties—are you at risk under the “improper financial activities” rules?
- If your institution relies on big federal grants or contracts, assess your federal funding risk.
- Review your transfer, recruiting, and eligibility practices, keeping in mind all the lawsuits and the possibility of new national standards.
- Get ready for more reporting—think financial and roster disclosures.
- Keep an eye on updates from agencies like the OMB, GSA, Department of Education, and FTC.
- Stay involved with Congress as they keep working on legislation that could finally bring some predictability to college sports rules.
Want to dig deeper? There’s a full article on the executive order and what it could mean for you over at Morgan Lewis.
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