The NCAA suffered another major blow last week when a federal judge in Tennessee granted a preliminary injunction against the NCAA. In early February, the state attorney general in Tennessee and the commonwealth's attorney in Virginia sued the NCAA alleging that the organization's rules precluding using NIL as a recruiting inducement is a violation of federal antitrust law. The plaintiff states argued that not allowing NIL to be used as a recruiting inducement forced athletes to commit, enroll, and/or transfer without fully understanding their NIL opportunities, thereby putting them at a disadvantage.
Accordingly, the plaintiff states sought a temporary restraining order (TRO) and preliminary injunction to stop the enforcement of the NCAA’s rules. The judge denied the TRO finding that there was no immediate harm that the plaintiff states would suffer. However, the judge made it clear that the plaintiff states were likely to succeed at trial based on the merits of their case. On Friday, the judge granted the preliminary injunction invalidating the NCAA's rules prohibiting boosters and NIL collectives from engaging with recruits during the recruitment process. This ruling is a little surprising given the fact that the TRO was not granted because the plaintiff states failed to show any irreparable harm. This means that any harm could be remedied with monetary damages.
However, in regards to the preliminary injunction the judge found that the athletes do in fact face irreparable harm due to the NIL-recruiting band. Per the ruling, the harm the college athletes face is not strictly monetary. The Court reasoned that college athletes face irreparable harm by having their negotiation leverage suppressed and by being denied the opportunity to fully access their true NIL value. The Court reasoned that prospective college athletes or a college athlete seeking to transfer have a certain window of time to commit to a school. It is during that period that the athletes have the most leverage to negotiate with NIL collectives and have the best shot of attaining their true NIL value. The Court pointed out that NIL opportunities are an important aspect of college athletes recruiting and transfer process.
Accordingly, the Court reasoned that being denied the opportunity to freely negotiate with NIL collectives during that time frame amounts to irreparable harm. The ruling states, "It would be difficult, if not impossible, to recreate this negotiating environment after the signing periods close or after a student-athlete begins their college career at a particular school". This ruling is sure to have a profound effect on college athletics going forward. This is especially true as NIL collectives are free to begin negotiation and making offers to prospects.
College and high school athletes have been granted the right to profit from their name, image, and likeness! Yayyyyyy!!! College and high school athletes can now enter NIL Deals. This is an exciting opportunity for college and high school athletes. However, there are certain topics that college and high school athletes and their parents need to know before entering any NIL Deal. Download by free NIL Contract Checklist for 5 contract terms to know! For more on college athletes' name, image, and likeness rights follow me on Twitter @esquire_coach and on Instagram and TikTok @the_esquirecoach. To receive updates from The Esquire Coach Blog directly to your email please subscribe below.