In the aftermath of a U.S. Supreme Court oral argument that went poorly for the NCAA, the college sports governing body could rethink its strategy for name, image and likeness.
On Wednesday, most of the justices appeared hostile to the NCAA’s legal arguments in NCAA v. Alston, a case on the legality of NCAA compensation limits on athletes’ education-related expenses. While questions during oral argument do not necessarily signal how justices will vote, a majority of the Court appeared firmly opposed to the NCAA. Justice Brett Kavanaugh even described amateurism rules as “disturbing,” since schools “pay no salaries to the workers who are making the schools billions of dollars.” A ruling will likely be released in June or July.
NIL isn’t at issue in the Alston case and falls under a different area of law, intellectual property, and centers on opportunities for college athletes to hire agents and earn money through endorsements or sponsorships with apparel, sneaker, video game, camp and influencer businesses.
March Madness supplies recurring examples of where athletes could gain from NIL—and not just male athletes. Per Axios’ Kendall Baker, eight of the 10 most-followed NCAA Elite Eight basketball players on social media are women. In a world with NIL, they could profit from influencing without forfeiting NCAA eligibility.
There is no federal NIL law yet, but a handful of states, including California and Florida, have adopted statutes that make it illegal for colleges to deny their athletes NIL opportunities. Several members of Congress have introduced federal NIL legislation but none of the bills has advanced past committee. In January, the NCAA effectively punted on NIL reform out of concerns shared by the Trump Justice Department that restrictions (“guardrails,” in NCAA-speak) would attract antitrust scrutiny and potentially lawsuits.
The NCAA now faces the risk that if it loses Alston, the majority opinion could contain language that makes it more difficult to regulate NIL. Several of the justices openly rebuked the NCAA for rules that limit athlete compensation. Sweeping language in a majority opinion that is adverse to amateurism principles could be interpreted beyond the narrow set of issues presented in Alston and into other subjects, including NIL. The NCAA might wish to get ahead of an impending Alston ruling by establishing NIL rules that would likely pass antitrust scrutiny.
As Sportico recently reported, there is an effort on Capitol Hill to craft a federal NIL bill that would blend NIL with other college sports reforms, including group licensing and revenue sharing. However, the clock is ticking. Three months from today, Florida’s NIL statute takes effect. Unless the NCAA seeks and obtains a court injunction that restrains the statute from becoming operative, the NCAA would be faced with a situation where athletes at Florida colleges could sign endorsements while those in other states could not. The recruiting implications would be immense.
Sportico will be publishing one short business highlight every weekday (and on some weekend days) during the three-week NCAA tournament.
March 18: The NCAA’s Billion-Dollar Empire is Built on Basketball
March 19: How Much is an NCAA Tournament Win Worth?
March 20: Men’s vs. Women’s NCAA Tournament Money
March 21: Indexing the NCAA’s Corporate Sponsors
March 22: Largest Financial Mismatch Produces Biggest Upset
March 23: As Top Seeds Lose, Sportsbooks Win
March 24: #NotNCAAProperty Reaches Millions Online
March 25: Sidelined in 2020, TV Advertisers are Back in Force
March 26: Loyola’s Rambling Flutie Effect
March 27: Juwan Howard vs. Dawn Staley Money Matchup
March 28: The Other NCAA Men’s Tournament is a Profit Machine
March 29: UCLA, Under Armour Ignore Each Other During Run
March 30: Odd Start Times A Result of Cash Crunch