On June 25, the U.S. District Court for the Northern District of California denied the House plaintiffs’ motion to exclude multimedia rights companies (MMRs) and third-party sponsors from the definition of associated entities under the House settlement enforcement.[1] Class counsel filed a motion seeking clarity on the definition of “associated entities or individuals,” arguing:
(1) MMRs are not associated entities, unless the party receiving and paying the athlete’s NIL is an associated entity; and (2) third-party sponsors are not associated entities if a school was merely helping connect a sponsor and athlete.
Class counsel sought to clarify this perceived ambiguity following the College Sports Commission’s (CSC) recent decision to reject more than $7.5 million in NIL deals between the University of Nebraska’s (Nebraska) student-athletes and its exclusive MMR partner.[2] In finding against Nebraska, the CSC applied the terms of the House settlement, noting that Nebraska’s exclusive MMR is an associated entity under to the terms of the settlement.[3] This decision left universities wondering whether MMRs are associated entities subject to heightened scrutiny by the CSC.
Magistrate Judge Nathanael M. Cousins answered this question last week, rejecting both arguments.[4] In denying the motion, Judge Cousins cited the initial Injunctive Relief Statement (IRS) draft from the House settlement that sought to regulate “boosters” from engaging in the recruiting and retainment of collegiate athletes; the term then was converted into “associated entities” in the final IRS draft to encompass any organization that is connected with the school.[5] The goal of the IRS by the House parties, said Judge Cousins, is to prevent any entity connected with the school from using NIL deals for recruitment or retainment purposes.[6]
First, Judge Cousins ruled that some MMRs are associated entities, which requires a fact-intensive inquiry.[7] If an MMR is helping a specific school with NIL deals, and increasing its recruitment pool, it is an associated entity subject to CSC enforcement.[8] Additionally, the plaintiffs have no evidence of intent to exclude MMRs from the “associated entity” definition because neither the terms of the settlement nor Judge Wilken’s two previous hearings contemplate excluding MMRs from the “associated entity” definition.[9]
Second, Judge Cousins disagreed with class counsel’s argument that all third-party sponsors are not associated entities under the IRS. Although third-party sponsors generally are only concerned with marketing their brand — regardless of school affiliation — they cannot be entirely ruled out from CSC enforcement.[10] Again, like MMRs, third-party sponsors can be used by universities as a back-end way of providing more money to athletes and increasing recruitment to that school.[11]
Judge Cousins found that the record presented too many factual questions to definitively exclude all MMRs and third-party sponsors from the definition of associated entities subject to CSC enforcement.[12] Whether an MMR or third-party sponsor falls within that definition depends on the nature of its relationship with the university.
In a statement to Law360, class counsel Jeffrey L. Kessler said that they “believe the decision is wrong, and [ ] are appealing it to Judge Wilken.” With Magistrate Judge Cousins ruling in favor of the CSC, the benefits pool that the parties negotiated as part of the House settlement remains undisturbed.
[1] In Re College Athlete NIL Litigation, Case No. 20-cv-03919-CW (N.D.Cal. June 25, 2026).
[2] Dan Murphy, CSC Wins NIL Arbitration Brought by Nebraska Football Players, ESPN (May 11, 2026, 8:03 PM), https://www.espn.com/college-football/story/_/id/48745201/college-sports-salary-cap-rules-upheld-arbitration-case-brought-nebraska-football-players
[3] Id.
[4] In Re College Athlete NIL Litigation, Case No. 20-cv-03919-CW (N.D.Cal. June 25, 2026).
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] Id.
[10] Id.
[11] Bonnie Eslinger, Athletes Vow to Fight Magistrate’s Third-Party NIL Deal Ruling, Law360 (June 26, 2026, 5:51 PM), https://www.law360.com/articles/2494284.
[12] In Re College Athlete NIL Litigation, Case No. 20-cv-03919-CW (N.D.Cal. June 25, 2026).