"The clearinghouse is there to authenticate NIL": Nick Saban breaks down concept of NIL Go after Trump's new executive order gets enforced

On Friday, legendary coach Nick Saban explained US President Donald Trump's executive NIL order to stop bidding wars. The new order that was signed on Thursday completely bans the pay-for-play concept in college athletics, where the NIL collectives and boosters were misusing their authority by funneling money to build rosters and aid high school recruiting.

No more extra funds can be pumped into a program unless the players directly get involved in endorsements and third-party deals. Speaking about the recent changes, Saban mentioned the concept of an NIL Go clearinghouse, an attribute introduced in the House vs. NCAA settlement.

This clearinghouse will work as a watchdog or a regulatory authority to validate the NIL contracts signed by the players. Any third-party deal that exceeds a $600 limit needs to be authenticated by NIL Go, which is subject to being accepted or rejected after certain background verifications.

“I think the clearinghouse is there to authenticate name, image and likeness," Saban said to Fox News [Timestamp - 1:40]. "In other words, is your marketing value relative to what you're getting paid to do a marketing opportunity?

“That's where, when you cross that line, that's where it becomes pay-for-play. So you have collectives that raise money that pay players, and they really don't do a relative marketing job to earn that money. And that's where, you know, this whole thing has kind of gotten sideways.

"And I think this whole clearinghouse is there to, you know, sort of protect the collective affecting competitive balance in college sports."

How NIL executive order could affect other sports

In college athletics throughout the country, only football and basketball are known for generating a major chunk of total revenue for a school. With football taking a share of over 75%, all other sports fall under the shelter of the remaining 25%. With a sudden hard stop on pay-for-play and NIL booster money, the cash flow is expected to take a massive hit.

Nick Saban reacted to this scenario, saying that college athletics was never meant to be a business. Such rules are introduced in order to maintain the sanctity of college athletics. There is only a limit to how many non-revenue-generating sports can be accommodated in a school. Hence, the universities need to play it smart.

Saban hopes there will be more such legislation coming in to eradicate disparity in men's and women's sports while also helping other sports find ways to generate more money.