Executive Summary

The rapid commercialization of college sports—driven by Name, Image, and Likeness (NIL) rights, revenue-sharing settlements, and now private-equity–backed joint ventures—has pushed the NCAA’s “amateurism” model to a breaking point.

The University of Utah’s proposed private-equity partnership with Otro Capital, creating a co-owned for-profit company (Utah Brands & Entertainment LLC) to operate its athletic program and manage revenue-sharing with athletes, is the clearest signal yet that schools are building quasi-professional structures around college sports.

At the same time, federal regulators and courts have swung back and forth on whether college athletes are “employees” under labor and employment laws. An NLRB General Counsel memo in 2021 argued that scholarship athletes are statutory employees, but that guidance was rescinded in early 2025 by new leadership, signaling a more restrictive approach. Unionization efforts like Dartmouth men’s basketball moved the conversation but then backed off in anticipation of a less sympathetic NLRB. Meanwhile, Congress and the White House have floated competing proposals—some to clarify that athletes are not employees, others calling for clearer rules in the NIL era.

Against this backdrop, NIL and for-profit structures like Utah’s make it easier to apply traditional “employee” tests (control, compensation, integration into a business) to college athletes—especially at private institutions and in football and men’s basketball. If athletes are widely deemed employees, it would profoundly reshape:

Athletes’ lives: wages, taxes, benefits, unionization, workers’ comp, and bargaining power. Universities & athletic departments: higher labor costs, HR compliance, Title IX pressure, governance complexity, and potential stress on non-revenue sports. The college sports system: movement toward a collectively bargained, quasi-professional model closer to minor league sports.

This white paper maps how NIL + for-profit athletic ventures could move athletes into employee status, and explores the downstream consequences for athletes, schools, and the broader higher-education ecosystem.

(Nothing here is legal advice; it’s a policy and structural analysis.)

I. Background: NIL and the Collapse of Old Amateurism

1. From NCAA Amateurism to NIL

For decades, the NCAA relied on the “student-athlete” label and strict amateurism rules to argue that players were not employees and could not be paid beyond scholarships and limited stipends. That framework began to crumble with:

Antitrust challenges, culminating in NCAA v. Alston (2021), which struck down caps on education-related benefits. The NCAA’s 2021 interim NIL policy, allowing athletes to monetize their name, image, and likeness through endorsements, appearances, and other deals without losing eligibility.

Almost overnight, NIL collectives and third-party entities sprang up to route money to players, from local sponsorships to large, team-wide deals—Utah’s own high-profile truck and SUV lease programs being a prime example.

2. The House v. NCAA Settlement and Direct Revenue Sharing

The next big shock came from House v. NCAA, where a proposed settlement in 2024–25 opened the door for schools to share a portion of broadcast and commercial revenues directly with athletes—often cited in the billions of dollars over time.

This settlement effectively acknowledges that:

College sports generate enormous, professional-level revenues, and Athletes have a legally cognizable claim to some of that money beyond scholarships and NIL.

Once schools begin making institutionally administered revenue-sharing payments, the distinction between “scholarship plus incidental benefits” and “compensation for services” becomes harder to maintain.

3. Private Equity Enters the Picture

In that context, Utah has become the first school to finalize a private equity–backed structure for college athletics:

A new for-profit entity, Utah Brands & Entertainment LLC, will be jointly owned by Utah and Otro Capital. It will operate Utah athletics “as an independent offshoot” of the athletic department, oversee revenue-sharing with athletes, and function as the de facto athletic department for business purposes. Donors can also buy stakes in the entity, with total capital expected to exceed $500 million when combined with Otro’s investment.

In effect, Utah is standing up a professionally structured, profit-oriented company around its athletic program, while still trying to retain enough institutional control to satisfy NCAA membership rules.

II. Legal Framework for “Employee” Status

1. Common-Law Employee Test

Under U.S. labor and employment law (NLRA, FLSA, some tax rules), “employee” status often turns on a common-law control test:

Does the individual perform services for another in return for compensation? Is that individual subject to the other’s control or right of control over how, when, and where the work is performed? Is the work integral to the business?

The NLRB General Counsel’s 2021 memo applied this logic to scholarship football players and similarly situated athletes at private universities, concluding that they are employees under the NLRA.

That memo highlighted:

The intense control schools wield over athletes’ time, training, conduct, and public communications. The substantial economic benefit athletes confer on the institution. The reality that scholarships and related benefits function as compensation for services.

2. NLRB, Courts, and Political Swings

Since then, the legal environment has been highly volatile:

Dartmouth case: In 2024, an NLRB regional director held that Dartmouth men’s basketball players were employees and ordered a union election, which the team won. Facing a likely more conservative NLRB under President Trump and fearing an unfavorable nationwide precedent, the players and union withdrew the petition in late 2024–25. In early 2025, the NLRB’s acting General Counsel rescinded the 2021 memo asserting that many college athletes are employees, signaling a shift away from aggressive enforcement on this issue—for now.

Separately, cases like NCAA v. Johnson (FLSA) and ongoing NLRB complaints involving USC and other programs continue to test whether athletes are employees under wage-and-hour and labor laws.

3. Legislative and Executive Branch Activity

Congress and the executive have begun to jump in:

Draft legislation has been floated that would declare student-athletes are not employees under federal or state law, effectively freezing the status quo if passed. In July 2025, an executive order called on the Department of Labor and NLRB to clarify athletes’ status amid NIL-driven commercialization, emphasizing preservation of educational roles and non-revenue sports but stopping short of endorsing full employee status or collective bargaining.

The result is a patchwork and unstable legal environment. Yet the factual trajectory is clear: athletes look more and more like workers in a commercial entertainment business.

III. How NIL + For-Profit JVs Push Toward Employee Classification

Even if current federal leadership is more skeptical about labeling athletes as employees, NIL and Utah-style structures strengthen the facts that courts and future regulators would examine.

1. Compensation Becomes Central and Predictable

NIL started as individual deals—endorsements, social media promo, appearances—often negotiated by third parties. But three developments change the character of that compensation:

Team-wide & standardized NIL deals – Example: Utah’s truck and car lease programs that covered entire teams, functioning less like marketing deals and more like quasi-benefit packages tied to roster status and continued participation. House settlement–driven revenue sharing – Institutional revenue-sharing with athletes, administered by the school or its controlled entity, looks very much like wages tied to participation in games and media. For-profit operating companies – Utah Brands & Entertainment is explicitly structured as a commercial enterprise that will operate athletics and oversee revenue sharing. Athletes become central contributors to the company’s revenue stream.

The more compensation is predictable, standardized, and tied to playing obligations, the more it satisfies the “pay for services” prong of employee tests.

2. Control and Integration Intensify

College athletes already face:

Mandatory practices, meetings, strength training, film study. Strict codes of conduct, social media guidance, brand-use rules. Travel schedules and restrictions that dominate their calendar.

When a for-profit entity operates the program:

The athletic company’s revenue depends heavily on athlete performance, availability, and marketability. It may implement even more structured performance metrics, branding obligations, and content creation schedules. Staff whose job is to maximize revenue (marketing, sponsorship, content, ticketing) gain more day-to-day influence on athlete activities.

Under the common-law test, this combination of control + compensation + integration into a commercial enterprise is precisely what courts look for in deciding employee status.

3. Employer-of-Record Becomes Easier to Identify

Historically, the NCAA and schools argued there was no employer because:

“Student-athletes” were participants in an educational program, not workers in a firm. Revenue flowed through the university and conferences, not through a clearly defined business unit.

Entities like Utah Brands & Entertainment change that:

You now have a named for-profit company with a board chair (the AD), an external president, and investors. It is explicitly described as the entity that will “act as the school’s athletic department” and manage revenue sharing.

If that entity is writing checks, controlling schedules, and enforcing performance expectations, it looks very much like an employer—even if the institution currently tries to label payments as “NIL” rather than wages.

IV. Scenario: What If College Athletes Are Treated as Employees?

Suppose, through future litigation, NLRB precedent, or new legislation, major-program college athletes are broadly recognized as employees under federal law. What then?

A. Consequences for Athletes

1. Wages, Taxes, and Benefits

Athletes would receive taxable wages or salaries, subject to payroll withholding (FICA, income tax) rather than only scholarships and sporadic NIL payments. Schools or their athletic companies might need to provide employee benefits: health insurance, retirement contributions, possibly paid leave, depending on structure. Injured athletes might gain access to workers’ compensation systems and, in some cases, unemployment insurance if their “employment” ends.

2. Collective Bargaining and Unionization

Under the NLRA, athletes at private institutions (and perhaps those in joint structures) would have the right to: Unionize by team, school, conference, or sport. Bargain over wages, hours, and working conditions. This opens the door to CBAs setting: Salary scales, scholarship guarantees, health-care coverage, concussion protocols. Transfer rules, practice-hour limits, postseason revenue shares.

In turn, CBAs could give schools and conferences access to the non-statutory labor exemption from antitrust law, allowing them to impose collectively bargained limits (e.g., caps, drafts) that would be illegal if imposed unilaterally by the NCAA.

3. Trade-Offs and Differentiation

Top athletes in revenue sports might benefit greatly—higher guaranteed pay and benefits. Lower-profile players or those in non-revenue sports might see: Fewer roster spots (if schools cut costs). Restructured scholarships or performance-based renewals. Athletes would face the full complexity of employment law, including potential discipline for cause, negotiated grievance procedures, and restrictions in CBAs.

B. Consequences for Universities and Athletic JVs

1. Rising Labor and Compliance Costs

If athletes are employees of the university, a for-profit JV, or both, institutions must:

Budget for wages + benefits for large rosters across multiple sports. Administer HR compliance: wage-and-hour (FLSA), anti-discrimination statutes (Title VII, ADA), occupational health and safety obligations, etc. Manage payroll systems, HR investigations, and legal disputes like any employer.

For Utah-style entities:

The for-profit company may become the nominal employer, but the university is still likely exposed to joint-employer theories if it retains control over key aspects of athletic life.

2. Title IX and Pay Equity Pressures

Title IX applies to educational programs receiving federal funds, not directly to employment. But once athletes are employees, schools will be simultaneously:

Running an educational program with gender-equity requirements, and Operating a workforce where federal and state anti-discrimination laws apply.

Potential friction points:

Large pay disparities between men’s football/basketball and women’s sports could provoke: Title IX claims related to unequal treatment in the overall program. Title VII or state-law claims if female athletes can argue disparate pay for substantially similar work. Schools might need to: Guarantee minimum pay floors for women’s sports. Devise creative revenue-sharing models (e.g., program-wide pools) to mitigate gender disparities.

3. Governance and Tax-Exempt Status

For schools like Utah that spin athletics into a for-profit joint venture:

The for-profit entity must pay income tax on its profits. The university must ensure that: Its ownership interest and control structure do not jeopardize its own tax-exempt status (e.g., excessive unrelated business income). Conflicts of interest between investors’ profit motives and educational mission are managed.

Investors will expect:

Competitive teams (to drive media value and ticket sales). Aggressive revenue maximization (sponsorships, dynamic ticket pricing, more games, more content).

That pressure could push the athletic company to demand more from athletes—precisely the kind of intensified control that bolsters future employee claims, even if current regulators are reluctant.

4. Academic Mission and Work-Study Boundaries

Once athletes are legally workers, schools must wrestle with:

How to protect academic integrity when substantial employment demands conflict with coursework. Whether athletes’ time must be tracked and compensated under wage-and-hour laws—including potential overtime for long weeks during the season. How to structure academic support: is it an educational service or part of the employer’s duty to provide training/working conditions?

Universities risk further criticism that they are operating quasi-professional entertainment businesses under the banner of higher education.

C. System-Level Consequences: Conferences, NCAA, and the Model of College Sports

1. A Move Toward Tiered or Split Systems

If employee status takes hold:

Power-conference football and men’s basketball could become: Fully professionalized, unionized, collectively bargained. Perhaps even spun off into separate leagues or subsidiary entities. Smaller schools and non-revenue sports may: Retain a more traditional “amateur” or grant-in-aid model, especially if they can argue their athletes fail the employee test due to lower commercialization and less control. The NCAA’s role could shift to: Coordinating health and safety standards and eligibility rules within the boundaries of labor law. Serving as a league office rather than a strict regulator of compensation.

2. Competitive Balance and Market Stratification

With athletes as employees:

Deep-pocketed schools (and their private-equity partners) can: Offer higher salaries and richer benefit packages. Take more risk on long-term contracts or creative revenue-sharing. Less-resourced schools may: Drop to lower divisions, shrink their sport offerings, or accept permanent competitive disadvantage.

Without some national framework—through CBAs, league rules with labor exemption, or federal legislation—college sports could slide into a market-driven hierarchy resembling European football: a true elite tier and a set of smaller, semi-professional or amateur tiers beneath.

V. Special Issues

1. International Athletes and Immigration

If athletes are employees:

International players on F-1 student visas may not be allowed to work in the ways required (beyond limited on-campus jobs or authorized OPT). Schools might need: New or expanded visa categories (P-1, O-1, or a new athlete-specific status) to legally employ foreign athletes. Without reform, international recruitment could become much more complicated or shrink substantially.

2. High School Pipeline and Early Professionalization

A professionalized college model would:

Encourage early specialization and contract-minded behavior in high school recruiting. Intensify debates over: NIL at the high-school level. “Prep academies” functioning as de facto minor-league feeders. Give athletes earlier leverage to negotiate: they could evaluate universities not just as schools but as prospective employers, with lawyers and agents involved from the outset.

3. Non-Revenue Sports and Olympic Pipelines

The financial strain of employee status is most acute for non-revenue sports:

Schools may: Cut sports with low spectator or media interest. Consolidate teams or push some into club or intramural status. That, in turn, threatens: Olympic development pipelines (swimming, gymnastics, track & field, etc.). Opportunities for athletes in less commercial sports, especially women’s programs built in the Title IX era.

VI. Strategic Options and Policy Pathways

1. For Universities and Athletic Departments

a. Design For-Profit Structures with Explicit Intent

Schools considering Utah-style JVs face a strategic choice:

Option 1: Minimize employee risk (short term) Keep payments labeled as NIL/licensing rather than wages. Route most compensation through third-party collectives. Maintain strict “educational” framing of athletic participation. Option 2: Embrace professionalization (long term) Accept that revenue-sport athletes will be employees. Build robust HR compliance, benefits, and bargaining capacity. Use CBAs to restore some predictability after years of chaotic litigation.

Utah’s model is a hybrid: it creates a clear commercial entity while still rhetorically leaning on “student-athlete” language. That may be unstable over time; eventually, regulators and courts will expect the corporate form to line up with the economic reality.

b. Governance and Safeguards

Regardless of path, schools should:

Build clear governance charters for athletic companies, specifying: Academic protections (minimum GPAs, class-time priority). Limits on practice and travel that respect student status. Mechanisms to resolve conflicts between revenue goals and educational mission. Implement robust compliance systems for: NIL transparency and tax reporting. Labor and employment law (if or when it applies). Title IX and broader gender-equity considerations.

2. For Athletes and Their Advocates

Athletes should prepare for both worlds:

If not classified as employees (status quo plus NIL): Negotiate more sophisticated NIL agreements. Push for enforceable health and scholarship guarantees at the state or institutional level. If recognized as employees: Consider unionization or other forms of collective bargaining for: Fair pay. Career-spanning healthcare and injury protections. Clear, predictable transfer and eligibility rules.

In either case, access to independent legal and financial advice will be critical as the amounts at stake grow.

3. For Policymakers

Policymakers at the federal and state level face a design problem: how to reconcile three goals

Protect athletes’ economic and labor rights in a multibillion-dollar industry. Preserve educational opportunities and broad participation, including non-revenue sports and women’s athletics. Provide regulatory certainty for schools and investors.

Possible components of a policy framework:

A clear federal definition of when college athletes are employees and when they are not—possibly sport-, revenue-, or division-specific. A mechanism for nationally recognized CBAs that cover major conferences and protect a baseline of athlete rights. Guardrails on private equity involvement, ensuring: Transparency of ownership and decision-making. Protection of academic standards and non-revenue sports. Incentives or funding streams to support Olympic and women’s sports, even if revenue sports become explicitly professionalized.

VII. Conclusion

NIL, the House settlement, and now private-equity–backed ventures like Utah’s Utah Brands & Entertainment LLC have dragged college sports into a new era where the economic realities look unmistakably professional.

Even if current political winds temporarily slow the formal recognition of athletes as employees, the underlying facts—structured compensation, intense control, commercial integration, and now defined for-profit employers—are steadily aligning with the traditional legal tests for employment.

When, not if, those facts and the legal framework finally line up, the consequences will be far-reaching:

Athletes will gain wages, benefits, and bargaining power—but face the burdens and trade-offs of being workers. Universities and their athletic companies will carry higher costs, greater legal obligations, and mounting pressure to reconcile profit motives with educational missions. The NCAA and conferences will have to reinvent themselves around professionalized, collectively bargained models in revenue sports, while deciding what becomes of the rest of the collegiate athletic ecosystem.

Utah’s experiment is thus more than a clever financing vehicle. It is a structural bet on what college sports will become—and a warning that the line between “student-athlete” and “employee” is growing thinner by the season.