Is the NCAA Getting Serious About NIL?
Last week may have signaled a new era for the NCAA and its complex relationship with name, image and likeness.
The Division I council, which is charged with rulemaking for DI, approved measures that include the establishment of a voluntary registration process for NIL service providers, the formation of a requirement that college athletes disclose to their schools NIL deals exceeding $600 in value (something more than 20 states already require) and a pledge to craft an NIL template contract and recommended contract terms.
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The DI council also began a substantive review of a plan proposed by NCAA president Charlie Baker that contemplates DI colleges being able to pay athletes for their NIL. Baker also urges the launching of a new subdivision where, in addition to direct NIL payments, colleges would pay athletes at least $30,000 a year via “enhanced educational trust funds.”
Meanwhile, the DI committee on infractions announced that a Florida State assistant football coach had engaged in impermissible recruiting for his involvement in a booster attempting to induce a recruit to FSU via an NIL deal. The penalties include FSU being placed on probation for two years and a 5% reduction in football scholarships.
But arguably the most significant development netted the least media attention. A federal judge in Illinois agreed with the NCAA that it can limit its interpretation of NIL to payments for the commercial use of a player’s identity and deem pay-for-play arrangements cloaked as NIL to violate eligibility rules. In denying motions filed by former Overtime Elite players and twin brothers Matt and Ryan Bewley, Judge Robert Gettleman also clarified that although the NCAA lost NCAA v. Alston and is losing Ohio v. NCAA, neither antitrust case involves NIL. Instead each concerns specific and fairly narrow situations (education-related benefits and repeat transfers, respectively) that shouldn’t be interpreted as broad repudiations of amateurism.
It was perhaps the best week for the NCAA’s leadership on NIL in two decades. The topic has been nightmarish for the association, which lost to Ed O’Bannon in court, lost in lobbying against states passing NIL statutes, lost in scrambling to adopt an ineffectual interim NIL policy after Congress refused to pass federal NIL legislation and lost in helplessly watching the rise of collectives, some of which have used NIL to recruit.
The NCAA is finally doing something and getting judicial support, too.
Now the question is what happens next.
The new NIL rules contemplate incremental, rather than transformative, changes; more tectonic reforms will face more resistance.The FSU enforcement action sent a message to schools and boosters, but time will tell whether it’s a one-off or the start of meaningful NIL enforcement. While Baker’s plan is bold and garnered praise even from NCAA critics, it’s unclear if the constituency that counts–university leaders–support it.
Then there’s the law. The NCAA should be pleased with the trajectory of Bewley v. NCAA, but the association and its member conferences and schools still face other legal controversies where the results haven’t been encouraging. In Re College Athlete NIL Litigation, Johnson v. NCAA, Carter v. NCAA and NLRB petitions on behalf of USC and Dartmouth athletes all represent serious threats to amateurism and, collectively, could lead to the recognition of college athletes as employees who are owed shares of TV money and can form unions.
Baker’s plan, meanwhile, could trigger legal challenges if it became NCAA policy. Anytime the NCAA limits opportunities for athletes to pursue compensation or for schools and conferences to pay athletes, it creates the risk for antitrust challenge.
But fear of antitrust litigation isn’t a good way to conduct business, especially since defendants usually win antitrust cases. One study finds they win 97% of the time. And though the NCAA has lost high-profile antitrust cases, those cases involved extreme and hard-to-defend rules (for example, denial of players receiving NIL pay when they appear in video games). More flexible NCAA rules, such as allowing NIL but meaningfully regulating collectives, would probably withstand legal scrutiny. The NCAA could also credibly challenge state laws that restrict its ability to enforce NIL rules.
The NCAA had a good week with NIL, possibly for the first time. The hard part will be keeping it up.
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