The Tennessee Federal District Court has prohibited the NCAA from restricting schools’ use of NIL guarantees as incentives to attend a member university.
The US college recruiting scene continues to be a chaotic mess, following a ruling by the Tennessee Federal District Court, which now allows Athletes to be promised NIL deals as a condition to signing with an NCAA school.
The ruling states: “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.”
NIL, which stands for name, image and likeness, allows athletes to monetise their personal brands via sponsorships, endorsements, and various other opportunities leveraging their name, image, and likeness.
A recent example of this is Caitlin Clark, who broke the scoring record in women’s college basketball. Nike celebrated Clark’s achievement with social media posts that doubled as ads and in turn made Clark a lot of money.
Covering the entire country, the recent ruling prevents the NCAA from enforcing its NIL rules against any school and giving student-athletes latitude on signing deals, however, the NCAA has said that the decision will “aggravate an already chaotic collegiate environment, further diminishing protections for student-athletes from exploitation”.
“Pay-for-Play”, a term that the NCAA loathes and believes has no right in the collegiate ecosystem due to its amateur roots, is at the centre of this ongoing argument.
Yet, with the rise of collectives – companies typically founded by alumni of the school – financial resources are collected through these companies and are then directed to athletes for the rights to use their name, image and likeness.
Despite the NCAA’s best efforts to block college athletes from making money, the consensus from the players, schools and stakeholders is that athletes should not just be paid, but should also be treated like employees.
Currently, several states are in the process of introducing legislation that would mandate payment for student-athletes’ services by their schools, effectively overturning the NCAA’s prohibition on pay-for-play.
Additionally, there are ongoing lawsuits filed by student-athletes aiming to establish them as employees of their schools. These lawsuits argue that student-athletes should not only receive compensation but also have the right to collective bargaining if they opt to unionise and The National Labor Relations Board (NLRB) has concurred with this stance.
Although the recent ruling could be overturned, the likelihood of this happening is very small and in fact this ruling could be a catalyst for further developments in the pay-for-play concept.
On top of this, the NCAA has been struggling to keep up with problem gambling. Earlier this month, the NCAA handed former Alabama baseball coach Brad Bohannon a 15-year “show-cause” order for breaking betting rules in April last year.
