Donald Trump signs NIL executive order: 3 biggest setbacks for college football programs after POTUS' bold move

The NIL landscape in collegiate athletics witnessed a rapid overhaul on Thursday after President Donald Trump signed an executive order. Titled “Saving College Sports,” the order was aimed at establishing a national standard for NIL deals while addressing the core issues of it.

The executive order focuses on prohibiting “third-party, pay-for-play” payments in college sports, intending to stop bidding wars and preserve non-revenue sports. While the move is aimed at stabilizing the landscape, it brings in quite a number of challenges for athletic departments.

Here's a look at three setbacks Donald Trump’s bold NIL executive action will have on college football programs:

3 setbacks that come with Donald Trump's executive order for college football programs

#1. Recruiting challenges

The introduction of NIL into college football has enabled programs to leverage booster-funded NIL collectives to attract top talent. However, the executive order has prohibited third-party, pay-for-play deals, limiting the possibility of getting top recruits for many programs.

Programs on the smaller level have been able to use NIL deals to compete with powerhouses for high-profile talent. However, they now face steeper challenges of doing that more often with the Donald Trump executive order, entrenching the recruiting dominance of traditional powerhouses.

The emphasis of the executive order on “fair-market” compensation would only limit the power and capability of small programs on the recruiting trail.

#2. Uncertainty in transfer portal dynamics

The transfer portal has been a widely used platform to recruit talent in the last couple of years in college football. It's been a medium for programs to acquire ready-made talents that can ensure instant competition.

However, Donald Trump's executive order restricting pay-for-play deals is bound to disrupt the multi-million-dollar transfer portal market. The realm has seen programs spend tens of millions to secure talent from the transfer portal, but such payments now face a strong restriction.

This raises many uncertainties about the dynamics of the transfer portal moving forward. A host of programs may now focus more on high school recruiting due to the impending struggle to attract talent seeking immediate financial reward.

#3. Widening competitive imbalance

One thing that has been noticed since the introduction of NIL into college football is the sudden rise of smaller programs. A couple of small programs have capitalized on the concept to build strong teams that can compete with the powerhouses on the field.

However, Trump's executive order's prohibition of pay-for-play deals is bound to limit the less prominent programs from using NIL as a leveling tool. This would widen the competitive imbalance in the realm, which will be very evident on and off the field.

While there's a $20.5 million revenue-sharing cap, only programs with larger stream revenue will be able to maximize it. The smaller ones will struggle to match it, and competitiveness dies slowly.