True NIL: What NIL Really Means Under the House Settlement

NIL stands for name, image, and likeness, but most student-athletes and families already know that. What matters more now is understanding what NIL actually means under the new college sports structure created by the House Settlement. That is where the idea of True NIL comes in.

UNCASVILLE, CT - MARCH 07: Destiny Agubata #4 of the Georgetown Hoyas warms up before the BIG EAST Women's Basketball Tournament Quarterfinal game between the UConn Huskies and the Georgetown Hoyas on March 7, 2026 at Mohegan Sun Arena in Uncasville, CT. (Photo by Erica Denhoff/Icon Sportswire)

I coined the term True NIL to describe what NIL is supposed to be: real marketing money paid to athletes for a real business purpose. That distinction matters because the term “NIL” has been used so loosely in college sports that it seems to cover every type of contract. For a while, schools and collectives were using “NIL” to describe all kinds of athlete payments, including money that looked much more like pay-for-play than actual endorsement compensation.

That’s why student-athletes need to understand the difference between the two basic types of money that may be coming in.

One type is salary money. That’s money tied to playing a sport. In today’s language, that is revenue sharing, or Rev-Share.

The other type is marketing money. That’s money paid for promotion, endorsement, appearances, content, or some other valid commercial purpose. That is NIL, or what I call True NIL.

The difference is important because the rules are changing, and labels alone are no longer enough.

Before the House settlement, almost everything got thrown into the NIL bucket. Schools, often through collectives, were paying athletes in ways that were widely described as NIL, even when the payments did not really look like traditional marketing deals. There were very few meaningful guardrails, and even fewer that were ever enforced.

The House settlement changed that by putting an actual definition around NIL and creating a system where athlete eligibility can be affected if the rules are not followed.

For the fellow nerds out there, the definition is in Article 4, Section 3 of the House settlement.

Under that framework, a marketing or NIL deal is prohibited unless certain requirements are met. The payment must be for a valid business purpose. That business purpose must be related to the promotion or endorsement of goods or services. Those goods or services must be offered to the general public for profit. And the payment must be at a fair market rate for comparable athletes.

That is True NIL.

Notice what’s missing from that definition: playing a sport.

That’s the point. True NIL is not supposed to be compensation for scoring points, making tackles, enrolling at a particular school, or remaining on a roster. It’s supposed to be compensation for the commercial use of an athlete’s name, image, and likeness in connection with a real business activity.

That’s why athletes need to learn how to spot the difference.

If the money is tied to athletic participation, it’s probably not true NIL. If the money is tied to a real promotional or endorsement activity for a legitimate business purpose, it’s much more likely to be NIL.

And if you want a practical way to pressure-test the issue, use the Transfer Test.

Ask this question: if I transfer during the term of this contract, will I violate the deal?

If the answer is yes, that’s a strong sign the money may not be True NIL at all. It may be Rev-Share or some other form of compensation tied to staying and playing at that school.

Student-athletes need to know the difference. Parents need to know the difference. Agents need to know the difference.

Because once eligibility rules start being enforced more seriously, it won’t be enough for someone to just say, “It’s NIL.”

The real question is whether it’s True NIL.