Donald Trump signs executive order to reshape college athletics and ban pay-for-play deals

Trump NIL executive order: In a move that could reshape the future of college athletics, US president Donald Trump signed an executive order on Thursday aimed at keeping college athletes from turning professional and setting out specific guidelines for preserving athletic scholarships based on an athletic department's annual revenue and declares that schools should not permit athletes to accept "third-party, pay-for-play payments," as reported by ESPN.

Donald Trump's Executive Order Targets “Pay-for-Play” and Third-Party Payments

The order, signed just months after a landmark antitrust settlement opened the door for direct payments to student-athletes, Trump has now asked his cabinet to develop a plan to preserve college sports opportunities while blocking so-called “pay-for-play” systems, especially payments from third parties, as per an ESPN report.

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White House Pushes Education Department to Enforce Compliance

The order urges the Department of Education, led by Secretary Linda McMahon, to use federal funding and other tools to pressure schools into following the administration’s guidelines, according to the report. Those guidelines include blocking athletes from accepting payments that don’t meet “fair market value” standards and increasing scholarship support in non-revenue sports like many women's sports, as reported by ESPN.

Trump Warns of Threat to Non-Revenue and Women’s Sports

Trump mentioned in his order, "A national solution is urgently needed to prevent this situation from deteriorating beyond repair and to protect non-revenue sports, including many women's sports, that comprise the backbone of intercollegiate athletics," as quoted by ESPN.

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NIL Deals and Athlete Compensation Under Increased Scrutiny

His move comes amid a wave of change in college athletics. Over the last decade, the NCAA's long-standing ban on paying athletes has slowly eroded, according to the report. Federal laws have cleared the path for student-athletes to earn money from name, image, and likeness (NIL) deals, as per a TOI report.

Antitrust Settlement Prompts Reaction From Trump Administration

In June, the NCAA and major conferences agreed to settle a massive antitrust lawsuit that will allow schools to pay up to $20.5 million to their athletes annually, payments often framed as endorsements but widely seen as salary equivalents, as reported by ESPN.

One of the co-lead plaintiff attorneys in the antitrust settlement, Steve Berman said, "Plain and simple, college athletes don't need Trump's help, and he shouldn't be aiding the NCAA at the expense of athletes," adding, "As a result of our case, college athletes are now free to make their own deals. For Trump to want to put his foot on their deal-making abilities is unwarranted and flouts his own philosophy on the supposed 'art of the deal,'" as quoted in the ESPN report.

NCAA President Charlie Baker Welcomes Trump's Support

However, NCAA President Charlie Baker welcomed the executive order, calling it a sign of support for preserving college sports opportunities, as per the report. Baker said, "The Association appreciates the Trump Administration's focus on the life-changing opportunities college sports provides millions of young people and we look forward to working with student-athletes, a bipartisan coalition in Congress and the Trump Administration to enhance college sports for years to come," as quoted in the report.

New Scholarship Rules for High-Revenue Athletic Departments

Under Trump's executive order, athletic departments that generated more than $125 million in the last academic year are now required to increase the number of scholarships they offer in non-revenue sports, as reported by ESPN. Departments that earned at least $50 million are not allowed to cut scholarships in those sports, according to the report. Most schools in the Power 4 conferences meet or exceed the $50 million mark, and about 30 to 40 schools have passed the $125 million threshold, as reported by ESPN.

Employment Status of College Athletes Remains Unclear

The order also calls on the Secretary of Labor and the National Labor Relations Board to clarify college athletes' employment status in a way that will "maximize the educational benefits and opportunities" for all athletes, but does not provide any specific timeline for those agencies to act, as reported by ESPN.

FAQs

What does the executive order say about athlete payments?
It bans “pay-for-play” deals and limits third-party payments unless they reflect a “fair market value.”

Will college athletes be treated as employees now?
That’s still unclear. The order asks labor authorities to look into it, but no decision or timeline has been given.