UNM Takes Over NIL Payments As New Rules Spark More Legal Controversy
Former UNM men’s basketball Donovan Dent celebrates with a win over San Jose State in the 2025 Mountain West Conference Tournament back in March at the Thomas & Mack Center in Las Vegas, Nev. Photo courtesy of UNM Athletics
Paying college athletes is more complicated than it sounds.
For UNM, payments to student-athletes that were traditionally made by the NIL collective 505 Sports Venture Foundation are now being made directly by UNM.
“As of July 1, I can tell you first-hand that [UNM] assumed payments on contracts we had entered into with football players and now the school is paying the players directly,” Kurt Roth, President of 505SVF said on “The 505 Sports Venture Foudnation Show" on July 2.
Roth told the Pit Press that 505SVF does not currently have any student-athletes under contract.
However, that could change in the future.
“I see a need to do that if we’re raising ancillary money and we’re getting kids individual deals.”
Currently, UNM is the primary payer for UNM student-athletes who receive NIL compensation.
UNM is asking that all donations that were given to 505SVF now go to UNM through the Lobo Alliance.
“If you’ve previously supported our student-athletes through 505SVF, we encourage you to continue to support through the Lobo Alliance,” UNM said in a statement.
Fans wanting to donate to the Lobo Alliance can do so here.
Image courtesy of the University of New Mexico
The 505SVF will still play a role in helping UNM generate fundraising to support student-athletes.
“Our fundraising efforts at 505 will continue in close collaboration with UNM and I think what you’re going to see going forward is we will do the NIL work,” Roth said. “505 SVF will be out in the community looking to get the student athletes out in public appearances to increase their financial exposure.”
Valid Business Purpose Rule
The College Sports Commission announced guidelines interpreting the “valid business purpose” rule.
This rule came out of the House Settlement and it regulates NIL deals paid by NIL collectives or third parties to student-athletes that are over $600. The revenue-sharing payments that come directly from the university to the student-athletes are not subject to the valid business purpose rule.
The most controversial guideline is the interpretation of valid business purpose as “any entity with a business purpose of providing payments or benefits to student-athletes or institutions, rather than providing goods or services to the general public for profit, does not satisfy the valid business purpose requirement.”
Further information is provided on the College Sports Commission’s website.
The new interpretation of the rule has drawn sharp criticism. Most NIL collectives, like 505SVF, exist primarily to generate money to pay student-athletes. The guidelines would make hundreds of NIL deals invalid.
The rule has no immediate impact on 505 SVF because it currently does not have any UNM student-athletes under contract. However, Roth has expressed his frustration with CSC’s new interpretation of the valid business purpose rule.
“It will stand up nowhere in court. It’s a joke,” Roth told The Pit Press on Saturday.
House Settlement lawyers for the Plaintiffs have already challenged the rule.
More lawsuits are expected over the rule change if the CSC does not retract the guidelines.
Burn the Whole House Down
Speaking of lawsuits, seven appeals have been filed in the House Settlement case after it was given final approval on June 6.
Amanda Christovich of Front Office Sports reports that the appeals challenge multiple aspects of the settlement, including the damages awarded to athletes and the revenue-sharing portion.
Currently, there is no known request to halt revenue-sharing payments for student athletes, so those are expected to continue while the appeals get litigated.
