The NCAA landscape has become the “wild west” concerning NIL (name, image and likeness) litigation where seemingly a new issue develops every month. There were two noteworthy matters this past week.
First, in the Eastern District of Tennessee, a federal judge issued an injunction enjoining the enforcement of the NCAA’s “recruiting ban” against Collectives’ attempting to attract non-committed student athletes with financial offers and other benefits. Second, the Dartmouth College men’s basketball team voted 13-2 to unionize after the NLRB declared the players employees of the college. Needless to say, the landscape of college sports continues to change at a breakneck pace.
The NIL Recruiting Ban
As previously discussed, the post NIL college sports world has given rise to the emergence of Collectives— pseudo booster club organizations whose sole purpose is the raising and distribution of funds and benefits to college athletes. Collectives operate outside colleges and the NCAA and serve to benefit student athletes by raising money from alumni, boosters, fans, and anyone willing to help increase the funding of their main goal: attracting as much athletic potential as possible. But, due to the lack of oversight, the NCAA issued a ban on the use of Collectives’ funds for any student athletes not already committed to or playing for the college they support.
The guidance from the NCAA essentially designates Collectives as boosters and prohibits them from “engaging in recruiting activities… on behalf of a school.” This includes promising NIL agreements contingent on initial or continuing enrollment at a particular institution. In other words, Collectives cannot use their resources to recruit either high school or transferring players to college or university programs— only for enrolled student-athletes.
The State of Tennessee and Commonwealth of Virginia challenged this guidance claiming it inhibited competition under the Sherman Antitrust Act. They argued the guidance suppresses price competition by limiting the negotiation leverage of student-athletes— whether transferring from another college or coming out of high school. The NCAA argued the guidance helps protect dwindling amateurism in college sports by keeping money out of the recruiting sphere. However, the Court decided that was not a good enough reason to limit the students’ negotiating power regardless of enrollment status with the school. “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 NCAA further sought to avoid the reach of the Court by claiming the guidance actually protects competition between schools. But, the Court found that despite the NCAA’s argument, the actions it was taking actually harmed competition by weighing down competitive advantage of one party and lifting up another. While the NCAA argued it has an inherent interest in doing so, the Court held it is the province of Congress to address the issue. The Court does not address the fact Congress is having trouble keeping up with the pace. In weighing these facts along with the other standards necessary for a preliminary injunction, the Court found in favor of the states and, in turn, the student athletes.
This is hardly the last word on this matter as the NCAA will undoubtedly appeal this decision. But, in the wake of the Alston decision through the prism of American antitrust laws, the Courts continue to lean in favor of student athletes seeking more economic freedom and against the NCAA that seeks to restrain it— regardless of the wisdom behind both sides’ arguments.
Unionization and College Sports
As mentioned earlier, the Dartmouth College men’s basketball team recently voted 13-2 to unionize— joining the ranks of the SIECU. One month earlier, the NLRB announced that college athletes could unionize. The NLRB found that Dartmouth “had the right to control the work” of the team and the team performed that work “in exchange for compensation” such as equipment, game tickets, and other benefits, thereby making them employees. This decision is in line with the recent trend, diverging from a decision by the NLRB in 2015 in which it declared players were not employees. Now, with the 2021 Alston decision and the deluge of dominoes that continue to fall from it, the NLRB decided to update its assessment of the situation.
Though they lack many similarities with typical American blue collar workers, the players carry the torch of professional athlete at the college level to the next logical step: unions. It is currently unclear what the players are seeking by forming a union and if it is similar to those of traditional unions in the United States— from the teamsters to teachers. But, as we continue to see these new developments come to light, one can imagine the benefits these athletes will be demanding in step with traditional union protections in the workplace.
The ground continues to shift underneath the feet of the NCAA and its student athletes. As these students become more litigious and seek to obtain more rights relating to their personal image, and the money that can be made from both, we will see how far the pendulum will swing before the NCAA is able to regain its footing in the race to maintain college sports’ amateur status.
Find out more about John P. Burns, here.