NCAA can’t enforce NIL rules after judge grants injunction

A federal judge in Tennessee granted a preliminary injunction on Friday afternoon that prohibits the NCAA from punishing any athletes or boosters for negotiating name, image and likeness deals during their recruiting process or while they are in the transfer portal.

The injunction is not a final ruling in the case, but the judge’s decision will likely have an immediate and dramatic impact on how NIL deals are used in the recruiting process.

«The NCAA’s prohibition likely violates federal antitrust law and harms student-athletes,» U.S. District Judge Clifton Corker wrote in his decision Friday.

NCAA rules prohibit athletes from signing NIL contracts that are designed as inducements to get them to attend a particular school — one of the few restrictions in place for how athletes can make money. For example, the NCAA recently announced sanctions against Florida State football because a member of its coaching staff connected a prospect with a booster collective that works closely with the Seminoles. The collective made a specific offer to the player, who was considering transferring from his current school to Florida State.

The attorneys general of Tennessee and Virginia argued that the NCAA is illegally restricting opportunities for athletes by preventing them from negotiating the terms of NIL deals prior to deciding where they want to go school. The lawsuit was filed Jan. 31, one day after University of Tennessee chancellor Donde Plowman revealed in a letter to the NCAA that the school’s athletic department was being investigated for potential recruiting rules violations.

In Friday’s ruling, Corker determined that the attorneys general have a reasonable chance of winning their case and that athletes could suffer irreparable harm if the restrictions remain in place while the case is being decided.

Anthony Skrmetti, Tennessee’s attorney general, said in a statement Friday that his office plans to litigate the case «to the fullest extent necessary to ensure the NCAA’s monopoly cannot continue.»

«The NCAA is not above the law, and the law is on our side,» Skrmetti said.

The NCAA did not immediately respond to a request for comment after Friday’s ruling.

Corker said the NCAA’s lawyers did not make a compelling argument for why using NIL contracts as recruiting inducements would undermine the academic side of college 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.

Earlier this week, Skrmetti told ESPN that he was willing to work with the NCAA to find some middle ground on how it could enforce some of its recruiting rules while the case is resolved.

«If they want to talk about possibilities for finding a workable solution in the short term, we’re always open to conversation,» Skrmetti said, noting he had not discussed the case with NCAA leadership. «There’s no guarantee we’ll be able to reach an agreement, but if there’s a mutually agreeable path forward as we work to get these issues figured out, we’re open to that.»

In an interview with ESPN on Tuesday, NCAA president Charlie Baker said the restriction on recruiting inducements was written because the association wants athletes to choose their future schools based on the best educational opportunities rather than where they could make the most money.

«I also think it makes it enormously challenging, as we are currently seeing in the existing NIL environment, for kids and families to figure out what the right choice is in the first place because an enormous amount of information flows their way that may not in fact be accurate,» Baker said.

ESPN asked Baker if having contracts that the prospective athletes could sign before committing to a school would help ensure that the offers they were receiving were accurate or could provide some way to hold a booster or school accountable for false promises.

«I don’t know,» Baker said.

Since adopting new rules that opened the door for NIL deals in 2021, the NCAA has issued two sanctions related to how boosters used NIL opportunities as an inducement in the recruiting process: the recent Florida State case and one involving the Miami women’s basketball team in February 2023.

The NCAA has struggled to enforce the inducement rules despite widespread acknowledgement and complaints from coaches, players and administrators that offers for NIL money have become a central discussion in recruiting players out of high school and the transfer portal. The rules allow coaches and collectives to share information about a prospect’s potential earning power as long as they don’t make specific offers or promises. Without documented evidence of a violation or cooperation from parties directly involved in an offer, the NCAA’s enforcement staff doesn’t have the power to compel the information they need to levy sanctions.

Plowman, Tennessee’s chancellor, said in her letter to the NCAA that it was «intellectually dishonest» to have rules that allow collectives to meet with recruits and enter into contracts with recruits but prohibit «conversations that would be of a recruiting nature.»

«Any discussion about NIL might factor into a prospective student-athlete’s decision to attend an institution. This creates an inherently unworkable situation, and everyone knows it,» Plowman wrote. «Student-athletes and their families deserve better than this.»

Baker told ESPN that he didn’t think the NCAA was ignoring reality by asking athletes to pick their schools based on academic and athletic opportunities and worry about NIL opportunities after they arrive.

«I think the most important thing here is let’s deal with some of the issues around accountability and transparency and consumer protections first,» Baker said. «And if we then want to have a conversation about other stuff, about how this should all work, especially if we get to the point where we give schools the ability to do more in this space, I’m all-in on that.»

In a separate case about the NCAA’s rules that restrict an athlete’s ability to transfer to a new school without penalty, a federal judge decided in December to grant an injunction. That ruling compelled the NCAA to change its rules to allow athletes to transfer as many times as they would like during their college careers while the case is pending.