The Executive Order on Athlete Status: What It Means—and What It Doesn’t
NEW YORK | July 24, 2025 — Today, the President issued an Executive Order addressing the classification of college athletes amid the rapidly expanding NIL marketplace. This action adds a new federal perspective to the ongoing debate over whether athletes should be considered employees—a question with significant legal, financial, and operational implications for universities, athletes, and industry stakeholders. While the Order underscores the government’s intent to maintain amateurism, its legal authority is uncertain and likely to face swift judicial challenges. As the situation unfolds, it is essential for everyone involved in college sports to understand both what this Order means and what it does not, in order to navigate the evolving regulatory landscape with confidence and foresight.
Policy Meets Precedent
This Order lands in the center of a rapidly evolving legal field. It directly confronts the recent landmark settlement in House v. NCAA, a court-approved agreement that opened the door for universities to pay athletes directly from their revenues. That settlement was the culmination of a legal trend that has seen courts and labor regulators increasingly scrutinize the NCAA's amateurism model. This judicial skepticism was most powerfully articulated by Supreme Court Justice Brett Kavanaugh. In his concurring opinion in NCAA v. Alston, he stated that the NCAA’s business model “would be flatly illegal in almost any other industry in America” and questioned how the organization’s remaining compensation rules could survive future antitrust challenges. The new Executive Order is a direct attempt to reverse this judicial tide, directing federal agencies to formally define college athletes as non-employees and curtail the "pay-for-play" arrangements that have emerged through NIL collectives.
What the Executive Order Says—and What It Doesn’t
The Executive Order directs federal agencies—including the National Labor Relations Board (NLRB) and the Department of Labor (DOL)—to issue guidance clarifying that college athletes should be considered amateurs, not employees. This directive aims to reinforce the principle of amateurism that underpins collegiate athletics. However, the Order itself is not law; it cannot override existing statutes or judicial precedent. Instead, it reflects the Administration’s policy stance and attempts to influence agency interpretation of laws already on the books. Notably, the Order does not alter current labor law tests or court decisions but challenges them in spirit by issuing a broad categorical statement about athlete status. This creates tension between the Executive Branch’s policy objectives and established legal frameworks.
Strategic Imperatives for Educational Institutions
For universities, this creates a deeply precarious situation. Institutions are now caught between a federal court settlement that permits them to pay athletes—an act that points toward an employment relationship—and a new executive policy that demands they deny that relationship. Relying on this Executive Order as a shield against lawsuits over wages or working conditions would be a high-risk legal strategy, as the Order does not eliminate an athlete’s right to sue for what they may be owed under existing law.
Implications for Athletes and Their Advisors
For athletes and their advisors, it's important to recognize that this Executive Order does not carry the force of a final legal determination. Existing rights and protections under current labor laws remain intact and may still be asserted through legal channels. In this uncertain environment, strategic counsel and a thorough understanding of both current and future agreements are more essential than ever, as the legal and regulatory framework surrounding athlete compensation continues to evolve and face active challenges.
Market Volatility: Key Considerations for Commercial Partners
For commercial partners, brands, and investors in the NIL space, the Order introduces a degree of regulatory uncertainty. While its long-term effects remain to be seen, it raises questions about the sustainability of some business models that have gained traction in recent years. This evolving legal landscape may warrant a reassessment of contracts and investments related to athlete compensation. Moving forward, strategies built on direct, transparent partnerships with athletes may be best positioned to adapt to potential shifts in policy and enforcement.
The Path Forward: An Unsettled Legal Frontier
Looking ahead, the legal landscape remains unsettled. The Order is likely to face judicial review, and any resulting litigation may take time to resolve. The fundamental question—are college athletes employees?—remains the central, unresolved issue of a multi-billion-dollar industry. A durable, nationwide solution will likely require either a definitive ruling from the U.S. Supreme Court or a comprehensive new law from Congress. Until then, all participants in the college sports ecosystem must navigate this turbulent environment with diligence and foresight.
Navigating the Changing Landscape: Practical Guidance for Stakeholders
For Universities and Athletic Departments: Review existing athlete agreements and compliance policies to ensure they account for possible shifts in federal enforcement and litigation outcomes. Stay engaged with legislative developments and consider proactive risk assessments.
For Athletes and Advisors: Understand your current rights under labor and contract law, and consult with legal counsel before entering NIL agreements. Be prepared for ongoing uncertainty and evolving definitions of employment status.
For Brands and Investors: Conduct thorough due diligence on contracts and partnerships to anticipate regulatory changes. Favor transparent, athlete-centered deals that can adapt to shifting legal frameworks.
Conclusion
The Executive Order marks another chapter in the evolving story of college athlete classification and NIL rights, but it is far from the final word. As courts weigh its legality and Congress debates possible legislation, uncertainty will persist. Stakeholders who stay informed, adopt flexible strategies, and prioritize transparency will be best positioned to adapt and thrive in this shifting environment. Navigating these complexities thoughtfully is essential to safeguarding the future of college sports and ensuring fair and compliant opportunities for all involved.
In a landscape redefined overnight, proactive and sophisticated counsel is essential. To understand how these changes impact your interests and to formulate a forward-thinking strategy, contact Sharpe Counsel.