Court Pauses Rule Requiring Student-Athletes to Commit to Schools Before Cashing in on NIL

The playing field continues to shift in favor of college athletes who wish to freely strike licensing deals for their names, images, and likenesses, or NILs.

U.S. District Judge Clifton Corker in the Eastern District of Tennessee has temporarily stopped the National Collegiate Athletic Association (NCAA) from enforcing rules that bar students from signing contracts until they commit to a school. He said the plaintiffs – the states of Tennessee and Virginia suing on behalf of the students – will likely prevail on their Sherman Act claims and so granted their motion for preliminary injunction.

The judge found sufficient evidence that the rules “likely harm competition.” Referring to his prior holding, Judge Corker said the NIL-recruiting ban is “an agreement among competitors to refuse to discuss prices with [recruits] until after negotiations have resulted in the initial selection of [a school].” … Such an agreement suppresses price competition by limiting negotiating leverage and, as a result, knowledge of value.”

The NCCA once again tried to argue that the amateur status of the athletes maintains the balance between academics and athletics, calling this procompetitive. Judge Corker was not moved, saying the NCAA did not show how the timing of when a student-athlete signs a NIL contract would destroy the preservation of amateurism. Less restrictive rules would accomplish the same goal, he wrote.

He also found that the harm suffered by the student-athletes is irreparable, adding that even a judgment in their favor would not make them whole.

Among his other findings, the judge said blocking the NCCA rule is in the public interest of preventing anticompetitive behavior.

Judge Corker concluded that the NCAA and related parties are enjoined from enforcing the NCAA Interim NIL Policy, the NCAA bylaws, or another other rule that prohibits student-athletes from negotiating NIL deals “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 ….”

Read our recent article – Cracking the College Sports “Cartel”: Good for Athletes, Competition, and the Games – by Joy M. Sidhwa and Tim LaComb, published in the Journal on Emerging Issues in Litigation.  


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