College athletes in the United States now sign endorsement agreements openly. The change came through litigation and state legislation rather than a single decision, and the resulting structure is unusual.
The old model rested on amateurism
Governing rules long prohibited athletes from receiving compensation beyond scholarships and defined expenses, on the argument that amateur status distinguished the product.
Athletes could not be paid for endorsements, appearances or use of their names even in ventures unrelated to their sport.
Legal challenges argued this restrained a market, and antitrust reasoning gradually eroded the defense that amateurism justified the restriction.
The revenue involved made the question difficult to contain, since television agreements and coaching salaries in the largest sports had grown to a scale that undercut the amateur framing.
State laws forced the issue
Several states passed laws permitting athletes at their institutions to earn from name, image and likeness, with effective dates that created a deadline.
Because schools in those states would otherwise have gained an advantage or faced conflicting obligations, national rules were relaxed to permit such earnings broadly.
The resulting patchwork left rules differing by state and by institution, and subsequent litigation and settlements have continued to reshape it.
Collectives became the main channel
Groups of donors organized entities that pool contributions and contract with athletes for appearances, social media posts and charitable work.
These operate separately from athletic departments, though the separation has narrowed as schools took on facilitation roles.
The practical effect is that a school's fundraising capacity influences which athletes it can attract, a factor that previously operated only through facilities and coaching.
Transfer rules changed at the same moment
Relaxed transfer eligibility allowed athletes to move between schools without sitting out a season, arriving alongside the earnings change.
The combination produced annual roster turnover resembling free agency, and coaches now recruit their own returning players as well as newcomers.
Programs responded by building staff functions dedicated to retention and to advising athletes on agreements, roles that did not exist previously.
Open questions remain unresolved
Whether athletes are employees is contested in litigation and before labor authorities, with implications for bargaining, benefits and taxation.
Revenue sharing arrangements agreed through settlement move money from institutions to athletes directly, which is distinct from third-party endorsement income.
Athletes entering these agreements are advised to obtain independent legal and tax guidance, since obligations differ by state and by contract.