Judge hands NCAA another loss, says compensation rules likely violate antitrust law, harm athletes

The NCAA lost another legal battle Friday as a federal judge barred the organization from enforcing its rules prohibiting name, image and likeness compensation for recruits by granting a preliminary injunction demanded by the states of Tennessee and Virginia.

It was another blow to the NCAA’s ability to govern college sports and more than 500,000 athletes.

Gabe Feldman, a sports law professor at Tulane, said an act of Congress might save the NCAA even as he noted this was just a preliminary injunction in one district court with the NCAA expected to appeal. That would go to the 6th U.S. Circuit Court of Appeals overseeing Tennessee, Kentucky, Ohio and Michigan.

“There’s no question the NCAA has never faced more attacks from different areas at one time,” Feldman said. “And things are snowballing. And I think that’s why there are so many serious discussions about how college sports needs to change and what those changes will look like.”

U.S. District Judge Clifton Corker in the Eastern District of Tennessee issued the injunction that undercuts what has been a fundamental principle of the NCAA’s model of amateurism for decades: Third parties cannot pay recruits to attend a particular school.

The judge wrote the NCAA’s stance likely violates antitrust law with Congress so far unwilling to give the association an exemption. The judge said athletes with a limited window are hurt by not being able to know their true value before committing to a school.

The decision led to questions about whether boosters will suddenly open the floodgates with offers to potential recruits. Oklahoma State University athletic director Chad Weiberg said the Cowboys had anticipated the decision but “we are awaiting further guidance from the Big 12 Conference and NCAA.”

The NCAA said it would review the ruling and talk with its member schools about possible policy changes. But the NCAA said turning rules supported by its members “upside down” will only make an already chaotic situation worse and lessen protections keeping athletes from being exploited.

“An endless patchwork of state laws and court opinions make clear partnering with Congress is necessary to provide stability for the future of all college athletes,” the NCAA said in its statement on the same day NCAA President Charlie Baker discussed the situation on Capitol Hill.

“I think in the end, we are going to need Congress to do something,” Baker said. “Because people will draw a lot of conclusions from court decisions. And then there will be new ones.”

Helen Drew, a professor of sports law at the University of Buffalo, said Baker is not identifying any specific bill for Congress. She also said this all is accelerating quickly after the NCAA did virtually nothing for years.

“Why have they not been addressing this?” Drew said. “The model’s falling apart.’”

The attorneys general of Tennessee and Virginia filed a federal lawsuit on Jan. 31 challenging the NCAA’s NIL rules after it was revealed the University of Tennessee was under investigation for potential infractions.

They argued that since the NCAA lifted its ban on athletes being permitted to cash in on their fame in 2021 recruits are factoring in NIL opportunities when they choose a school—decisions that should not be limited. The judge noted the NCAA’s contention that allowing so-called NIL collectives—business entities backed by boosters—to strike deals with recruits would eviscerate the difference between college athletics and professional sports.

“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,” the judge wrote.

Corker has made clear he believed the states are likely to prevail in the long run.

Tennessee Attorney General Jonathan Skrmetti said the injunction ensures athlete rights will be protected from the NCAA’s “illegal NIL-recruitment ban.” He said the bigger fight continues.

“We will litigate this case to the fullest extent necessary to ensure the NCAA’s monopoly cannot continue to harm Tennessee student-athletes,” Skrmetti said. “The NCAA is not above the law, and the law is on our side.”

Virginia Attorney General Jason Miyares called the injunction a significant ruling for athletes who deserve the freedom to negotiate and benefit as the NCAA and its member schools earn millions.

“It’s only fair that they have more freedom over what they earn,” he said. “The NCAA has taken advantage of talented young athletes for too long.”

Joshua Lens, an assistant professor at the University of Arkansas and former college athletics administrator, called this lawsuit and the judge’s order very specific. Lens said the NCAA still can enforce its other NIL rules. Whether this becomes a national precedent depends on the NCAA’s response.

The NCAA already is not enforcing certain transfer rules after a federal judge’s ruling in December.

“I think the NCAA is just going to pause for a minute on trying to enforce the so called NIL recruiting ban,” Lens said.

The injunction helps the University of Tennessee, which is facing an inquiry by the NCAA into possible recruiting violations. University officials declined to comment Friday but its chancellor revealed Jan. 30 in a scathing letter to Baker that the association was alleging Tennessee violated NIL rules through deals made between athletes and a booster-funded NIL collective that supports Volunteers athletes. Donde Plowman called it “intellectually dishonest” for NCAA staff to pursue infractions cases as if students have no NIL rights.

The NCAA’s authority to regulate compensation for athletes has been under attack from a variety of avenues and its legal woes are growing.

The Tennessee case is one of at least six antitrust lawsuits the NCAA is defending as it also asks for antitrust protections from Congress. A National Labor Relations Board official ruled in early February that members of the Dartmouth men’s basketball team are employees of the school and could vote to form a union, which the players plan to do.