Last Friday a ruling by District Court Judge Clifton Corker of the Eastern District of Tennessee made the NCAA’s worst nightmare a reality. The preliminary injunction he granted now prohibits the NCAA from enforcing its own rules barring the use of pay-for-play in recruiting.[2] Effective immediately, college athletes can now be promised name, image, and likeness (NIL) deals as a condition to their signing with an NCAA affiliated school.
How did we get here? On January 31st of this year, the state attorneys general for Tennessee and Virginia filed a joint federal lawsuit against the NCAA in which they alleged that the NCAA’s enforcement of restrictions on NIL deals violates federal antitrust law.[3] The complaint specifically targeted the NCAA’s current ban on using NIL deals as a recruiting inducement for athletes.[4]
Ever since the Supreme Court handed down the landmark Alston decision in 2021, it has been clear that the NCAA is subject to federal antitrust law. The Tennessee and Virginia attorneys general feel no different, as they believe the NCAA’s current NIL rules constitute an unlawful restriction on the market, as they prohibit athletes from negotiating for better deals with collectives before they arrive at school.[5]
The lawsuit came just days after University of Tennessee’s chancellor ripped apart NCAA president Charlie Baker in a fiery letter for attempting to sanction the school over the recruitment of quarterback Nico Iamaleava, who entered into a lucrative NIL deal with Tennessee’s largest collective, Spyre Sports.[6] Ever since the NCAA lifted its long-standing ban on collegiate athletes profiting from their fame in 2021 after heavy pressure from the states, the NCAA’s governing body has implemented an interim NIL policy and has since released multiple “clarification guidelines” as well.[7] The issue is that these “clarification guidelines” have done anything but clarify what exactly schools and collectives are allowed to do regarding NIL deals. While the argument made by University of Tennessee’s chancellor in her letter that the NCAA’s guidelines “hadn’t explicitly said booster collectives can’t be involved in recruiting” is questionable at best, it opened the door for someone such as the Tennessee and Virginia attorneys general to step in and challenge the NCAA’s underlying NIL rules.
In the preliminary injunction issued last Friday, the court stated:
“Effective immediately, the NCAA … (is) restrained and enjoined from enforcing the NCAA Interim NIL Policy, the NCAA Bylaws or any other order authority to the extent such authority prohibits student-athletes from negotiating compensation for NIL with any third-party entity, including but not limited to boosters or a collective of boosters, until a full and final decision on the merits in the instant action.”[8]
In granting the plaintiffs preliminary injunction, Judge Corker’s decision focused on the relationship between NIL collectives and collegiate athletes. He found that the NCAA’s existing NIL rule prohibiting athletes from having negotiations with NIL collectives before they commit to a school is likely an illegal restriction of trade.[9] In handing down his ruling, Judge Corker wrote that “Neither the NCAA nor any other affected individual or entity will face substantial harm with the issuance of an injunction, whereas…student-athletes face irreparable harm” due to the fact that the NCAA’s rules “[strip] athletes of their negotiating leverage and [blind] them to their true NIL value.”[10] While the NCAA attempted to make its tried-and-true amateurism argument against the injunction, Judge Corker was unpersuaded and stated: “While the NCAA permits student-athletes to profit from their NIL, it fails to show how the timing of when a student-athlete enters such an agreement would destroy the goal of preserving amateurism.”[11]
According to the ruling, the injunction is not limited to the current situation at the University of Tennessee, but instead “covers the entire country, preventing the NCAA from enforcing its NIL rules against any school and giving student-athletes latitude on signing deals.”[12] While the NCAA can pursue an interlocutory appeal to this ruling, it might be better off saving its money as in his injunction decision, Judge Corker ruled that the “Plaintiffs have demonstrated a likelihood of success on their Sherman Act claim.”[13]
It was inevitable that the introduction of NIL into college athletics would lead to this. The question now is what will the NCAA do in response? Will it fight this lawsuit tooth and nail? Will it beg Congress for an antitrust law exemption? Whatever the answer is, it is clear that the NCAA no longer has the law on their side.
[1] Photograph: https://www.forbes.com/sites/leonardarmato/2024/02/26/big-nil-court-loss-means-ncaa-must-embrace-pay-for-play–to-survive/?sh=24981b8c6284
[2] https://theathletic.com/5296175/2024/02/23/ncaa-nil-paying-recruits-tennessee-injunction/
[3] https://frontofficesports.com/tennessee-virginia-ags-are-suing-the-ncaa-over-nil-restrictions/
[4] Id.
[5] Id.
[6] https://apnews.com/article/tennessee-nil-ncaa-f8cd95db8717f8f6ae3d0dc1112ea186
[7] Id.
[8] https://www.forbes.com/sites/leonardarmato/2024/02/26/big-nil-court-loss-means-ncaa-must-embrace-pay-for-play–to-survive/?sh=24981b8c6284
[9] https://frontofficesports.com/pay-for-play-is-here-federal-judge-says-ncaa-cannot-enforce-any-nil-rules/
[10] Id.
[11] Id.
[12] https://www.forbes.com/sites/leonardarmato/2024/02/26/big-nil-court-loss-means-ncaa-must-embrace-pay-for-play–to-survive/?sh=24981b8c6284
[13] https://theathletic.com/5296175/2024/02/23/ncaa-nil-paying-recruits-tennessee-injunction/
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