U.S. College Sports: Key Legal and Regulatory Developments

On April 3, 2026, President Donald Trump signed an executive order titled “Urgent National Action to Save College Sports”, which seeks to address growing structural concerns arising from the commercialisation of college sports, particularly regarding unregulated Name, Image, and Likeness (NIL) compensation, athlete mobility, and the preservation of non-revenue sports.

The order aims to establish a uniform regulatory framework by ensuring that college athletics are governed by clear and consistent national standards, rather than a patchwork of state laws. It directs the Federal Trade Commission and the Department of Justice to evaluate and implement appropriate regulatory and enforcement measures.

The existing governance structure of college sports in the United States is largely overseen by the National Collegiate Athletic Association (NCAA), a private regulatory body. However, recent changes, including the introduction of state-level NIL Laws and court decisions, have significantly altered this framework by weakening centralised enforcement and creating uncertainty.

Substantive provisions to restructure key aspects of college athletics have been introduced. The order defines “fraudulent NIL schemes” as arrangements that pay for goods or services at a price above their fair market value in connection with an athlete’s participation in college sports, including payments made through collectives or similar entities. Such schemes are prohibited, while legitimate compensation at fair market value for NIL rights from third parties unaffiliated with athletic departments remains permissible. Revenue sharing between institutions and student-athletes is also permitted when consistent with governing body rules.

The order also calls for the development of transfer regulations, including one free transfer during the five-year eligibility period with immediate playing eligibility, and one additional transfer only if the student-athlete obtains a four-year degree. Any further transfers would require the athlete to sit out a season. In addition, it supports introducing a five-year participation window and prohibits professional athletes from returning to college athletics.

Focus has also been placed on protecting non-revenue and women’s sports. The order highlights that unchecked commercialisation in high-revenue sports, such as football and basketball, may reduce resources and participation opportunities in other sports. Thus, it is important to maintain a wider range of athletic opportunities that are consistent with Federal law. 

Further, federal agencies have been directed to ensure that institutions receiving federal support adhere to consistent national standards for college athletics and to evaluate issues concerning the status and treatment of student-athletes. Notably, the order directs agencies to assess whether violations of transfer, eligibility, and pay-for-play rules render a university unfit for federal grants and contracts, potentially affecting suspension and debarment decisions. The operative sections of the order take effect on August 1, 2026.

However, as an executive order, this action cannot create new laws or override existing state laws. Multiple legal experts have indicated that the order is likely to face significant legal challenges, as it conflicts with previous court rulings and NCAA decisions that expanded athlete transfer rights. Whether the order can withstand legal scrutiny remains uncertain. The order strongly encourages Congress to expeditiously pass legislation that satisfactorily addresses these issues, including the bipartisan SCORE Act, which has stalled in the legislative process.