Hey, NCAA: NIL is just the start

Outside pressures forced the NCAA to adopt long-overdue NIL legislation, ushering in a new era of athletes’ rights and proving the NCAA no longer has autonomy to govern collegiate athletics.

As the clock was about to strike midnight the NCAA finally caved and voted to allow all college athletes to earn compensation from their Name, Image, and Likeness (NIL) beginning July 1, 2021–the day before similar NIL legislation would become law in seven states across the nation.  This long overdue reform will introduce a new era of college athletics in which athletes will be permitted to earn compensation by making appearances, hosting summer camps, appearing in advertisements, or putting on exhibitions. 

And, while the athletes (rightfully) stand to gain from this NIL legislation, the critical takeaway is that the NCAA is no longer in control of its own destiny. By failing to enforce its rules while driving revenues into the billions and refusing to share those profits with its labor force, the NCAA proved it was incapable of governing by itself, requiring outside actors to step in and set new standards the NCAA must abide by. NIL is the first of these.

Credit where credit is due

At the outset, credit for the NCAA’s interim proposal to introduce NIL compensation legislation must be given, but not to the NCAA. 

This change was the direct result of the mounting pressures from change advocates across the country.  Whether by bringing lawsuits, battling on Twitter, speaking out during the NCAA tournament #NotNCAAProperty, or even starting a law school sports blog, the conversation concerning college athletes’ rights gained significant momentum in the latter half of the 2010s and into the 2020s.

All of this culminated in state legislatures across the country either introducing or passing legislation that made it illegal for the NCAA to prevent college athletes within its borders from earning compensation from their NILs.  In September of 2019, California became the first state in which athletes could legally make money off the use of their NILs without running afoul of NCAA rules.  Almost two years later, 19 other states have enacted NIL legislation, seven of which go into effect on July 1st and an eighth later in July.  These state lawmakers (along with a helpful shove from LeBron James’ HBO program, Uninterrupted) were the impetus behind this change.

Although this legislation loomed over the NCAA’s head for almost two years, the turning point in the NIL conversation was the Supreme Court’s July 21, 2021 unanimous decision in Alston v. NCAA, which affirmed the trial court’s ruling that NCAA member institutions could not place any restrictions on academically-related benefits offered to student-athletes.  While the Alston case did not concern NIL specifically, its impact on the NCAA’s NIL legislation is undeniable. 

Writing for a 9-0 majority, Justice Gorsuch gutted the NCAA’s decades-old argument that it was immune from antitrust challenge based on the high court’s 1984 decision in NCAA v. Board of Regents. See Alston (“On the NCAA’s reading, [Board of Regents] expressly approved its limits on student-athlete compensation—and this approval forecloses any meaningful review of those limits today. We see things differently.”). Now, no longer could the NCAA claim its bylaws were entitled to blanket antitrust deference under the Sherman Act, leaving the NCAA exposed to future attack should its rules foster anticompetitive conduct.  Adding insult to injury, Justice Kavanaugh’s concurring opinion took aim at the very core of the NCAA’s billion-dollar amateurism scheme, and fired a warning shot should the NCAA continue to restrict its athletes’ rights.  In a Judge Dredd-esque pronouncement, Kavanaugh made clear that “[t]he NCAA is not above the law.”

The Enforcement Issue & Pay-for-Play

It’s exciting (and about time) that NCAA athletes will no longer be restricted from monetizing their NIL–something that every other student on campus is and has always been entitled to do.  Schools thinking progressively will see this as an opportunity to empower their athletes and encourage them to be entrepreneurial.  The best athletics departments will be the ones who facilitate and foster NIL compensation, but without stepping over the line.

The issue is, no one knows where the line is or how it will be enforced.

And that is the NCAA’s fault.  Under this interim legislation–which was concocted over the course of a week based on the threat of additional litigation stemming from Kavanaugh’s ominous pronouncement–for states that have passed NIL laws, those laws govern.  For states that have not passed such legislation, the institution itself must draft and implement the policy.  In either case it is up to the schools to determine whether an athlete’s NIL compensation complies with the NCAA’s NIL bylaws–whatever those actually are.

There is no precedent.  There will be hundreds of different policies.  Each will be enforced differently.  And NIL will be used as a major recruiting, retention, and transfer tool.  This would all be okay if the NCAA stepped out of the way and let the free market run its course.  Yet the NCAA continues to hang on, feigning a paternalistic commitment to governing its amateur sports cartel. 

In the past, this may have been a bad thing, but with the Alston case as precedent, the NCAA’s attempt to govern may just open the door for the final change the athletes have sought since Ed O’Bannon filed his lawsuit in 2009—pay-for-play. Justice Kavanaugh was clear that any additional restrictive activity by the NCAA could mean doomsday for the NCAA’s amateurism model.  If the NCAA unnecessarily or improperly restricts the market for college athletes to earn money off their NILs, it could result in an immediate legal challenge that includes not just NIL, but also raises the pay-for-play issue.  With Board of Regents out of the way and Kavanaugh’s language still resonating across the country, one misstep and the NCAA could be toast.

Takeaway

The NCAA passing its interim NIL legislation is a huge win for college athletes, but it’s just the beginning.  Revenue-generating athletes still receive no share of their schools’, conferences’, or the NCAA’s billion-dollar profits and the NCAA continues to restrict its athletes from realizing their true earning potential based on a disingenuous and/or selectively enforced definition of amateurism.  Until true pay-for-play is introduced for the deserving athletes in college sports, the challenges, legal or otherwise, will not stop.  And now, the athletes have the legal precedent to do it as well as some additional artillery from Justice Kavanaugh.

What is more, this NIL legislation proves that outside actors have the potential to introduce institution-altering change into college sports.  For years, the NCAA was given deference to run its model as it chose, holding its position as the last true bastion of amateur sports in the United States.  Yet the NCAA’s commitment to revenue and failure to actually enforce its rules against offending member institutions has cost the organization its antitrust exemption, its autonomy, and ultimately, its respect from this country’s leaders. Future change is inevitable. The question remains whether the NCAA or someone else will be bringing it about. My money is on the latter.

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Attorney. University at Buffalo School of Law alum. Former legal intern and hitting partner at the US Open. Former Division I athlete and assistant coach at Davidson College.

2 thoughts on “Hey, NCAA: NIL is just the start

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  1. I think the biggest problem with this will involve high school and AAU athletes, especially in men’s basketball.

    Although the NCAA rules prevent NIL from being used to entice a kid, and they are all kids, in high school to be given endorsements to attend a particular school, it may limit kids to schools based upon shoe deals.

    For years shoe companies have pushed kids to go to college at a school that wears the same brand of shoe and uniforms that they wear in high school/AAU. With endorsements possible will the shoe companies tell kids go to a school, any school, that uses our products and we will give you an endorsement deal.

    That does not violate the letter of the NCAA rule, but certainly its spirit. Will this lead to college coaches only recruiting kids wearing the brand that their school wears because they have no shot a kid that is perfect for their school?

    What will happen if in the middle of a student’s time in school if the school were to switch from Brand N to Brand A or Brand U? If a school’s rule is that a student cannot endorse a product that competes with what the school uses? Can the school’s decision void a students endorsement contract? Is a private institution in a better position to void the contract than a public university? After all a private institution is not bound by the contract clause of the United State’s Constitution’s Contract Clause.

    It will be an interesting couple of years as all of these issues are worked out across the country.

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