Jeffrey Kessler, a lead attorney for athletes in House v. NCAA and arguably the nation’s top sports litigator, says he is “happily monitoring” the situation surrounding the NCAA’s announcement Monday that its Division I Board of Directors had passed specific guidelines aimed at adding enforcement teeth to its nearly year-old interim NIL policy.
“Frankly, I think a lot of this will be talk and very little action, precisely because they know what will happen,” said Kessler.
Late Monday, the NCAA announced it was adopting, effective immediately, a working group’s recommendations for cracking down on booster-funded collectives and other athlete NIL arrangements that are perceived to cross into recruiting inducements.
In foreshadowing the proposed guidelines, one of the working group members, Ohio State athletic director Gene Smith, publicly acknowledged over the past week that the move could spur new lawsuits against the courtroom-weary NCAA, but that this was nonetheless necessary to uphold the integrity of the “recruiting space.”
Hours before the NCAA announced it had adopted the new guidelines, Smith told Sportico the working group did not itself “go into depth on the potential legal issues,” but that it was mindful that “our society was highly litigious.”
On Monday morning, The Athletic published a story that curated the preemptive dares of lawyers and agents representing NIL collectives and athletes for the NCAA to release its hounds.
NCAA leaders have said they failed to anticipate such developments as NIL collectives or all-team endorsement deals, which were never intended to take hold during the interim period. But in Kessler’s mind, these ships have already found their way to open waters.
“The only basis you could have for going after that concern would be some claim that it was necessary to preserve competitive balance,” said Kessler. “But the problem in that argument is that it has already been established that there is no competitive balance in FBS football or Division I basketball. And, if there is no balance, there is no balance to preserve.”
The new NIL sanction guidelines, which were first reported on last week by Sports Illustrated, come almost 10 months after about a dozen state laws allowing college athletes to profit off their NIL took effect last summer. The NCAA, which had indicated that it would adopt its own formal NIL guidelines ahead the state laws’ July 1 kickoff, ultimately kicked the can after receiving a written admonition from the Department of Justice’s Antitrust Division. Instead, the association adopted a vaguely worded, interim policy, which suspended its previous ban on college athletes earning money from endorsement deals while broadly insisting that amateurism be preserved.
The NCAA’s course change closely followed a stinging, 9-0 rebuke by the U.S. Supreme Court in NCAA v. Alston. Former West Virginia running back Shawne Alston convinced the court that the NCAA and its members had violated federal antitrust law by conspiring to cap education-related benefits schools could provide their athletes. Although Alston was not an NIL case, it set the precedent that the NCAA would not receive deference in future antitrust challenges—including those involving NIL.
Kessler, who argued for Alston, is now co-class counsel in House, which is poised to follow both the Alston case and O’Bannon v. NCAA as antitrust actions that stir NCAA sea change. Led by Arizona State swimmer Grant House, Oregon basketball player Sedona Prince and former Illinois football player Tymir Oliver, the consolidated litigation claims the NCAA and its members have illegally conspired, until 2021, to deny both NIL opportunities and pay for college athletes appearing in televised broadcasts. NCAA rules, the players argue, have unduly interfered with the basic tenets of competition and market economies.
In an amended complaint filed last July—weeks after the NCAA adopted its provisional NIL instruction—the players’ attorneys maintained athletes were enjoying NIL opportunities “without any harm to consumer demand.” This was a reference to NCAA arguments that compensation for college athletes would repel fan interest. If that were true, courts would be more amenable to NCAA restrictions on NIL and other forms of player compensation. But as Kessler told Sportico, college sports, at least as measured by revenues and ratings, have only thrived with NIL.
“The fan reaction to surveys is that (they) greatly support athletes getting NIL rights without limits,” said Kessler. “There is no groundswell of fans who are upset by any of this. How do I know? Look how many people watched the Final Four.” (A March poll by Marist College found 74 percent of respondents supportive of college athlete NIL rights, while almost half believed that schools should be paying players directly.)
If successful, House would lead to an injunction that compels the NCAA to change its rules. It would also bring treble damages—a sizable dollar figure if college athletes should have been paid to be on TV in recent years and if the case is certified as a class action on behalf of tens of thousands of athletes.
To that end, the trio seeks certification of classes on behalf of different groups of current and former D-I athletes who have competed since 2016. The case is before U.S. District Judge Claudia Wilken, who presided over O’Bannon and Alston, but is a long way from resolution. Judge Wilken is scheduled to hold a hearing on class certification on May 24, 2023, and a jury trial in Oakland is scheduled for Sept. 26, 2024. With potential appeals, the case could be on the docket well into the 2020s. But time hasn’t been a deterrent to those who seek NCAA reform. Both O’Bannon and Alston took more than six years, and both cases defeated the NCAA.
Kessler maintained that if the NCAA “posts additional restrictions regarding NIL rights,” those restrictions would be challenged under existing claims in the lawsuit. He also contended that other antitrust lawsuits brought by athletes over NIL would likely be brought into House. “We don’t need a new lawsuit,” he stressed, “we already have a lawsuit.” At the same time, Kessler noted that potential antitrust suits brought by boosters and businesses wouldn’t be part of House, which is a players’ case. He added that new cases brought against the NCAA and schools for violating state NIL statutes would have their own trajectories, as well.
For his part, Kessler wouldn’t rule out the possibility that he could eventually “represent other plaintiffs consistent with my representation” of college athletes, such as boosters who may be punished for paying such athletes.
But the NCAA’s new guidance seems designed to mitigate the risk of litigation. Noticeably, the guideline includes a disclaimer that it “is subject to state NIL laws or executive actions with the force of law in effect.” The guidance also contends it is merely clarifying rules that are already in place, as opposed to instituting new rules.
Still, the guidance leaves room for interpretative disagreement. It notes that “NIL agreements must be based on an independent, case-by-case analysis of the value that each athlete brings to an NIL agreement,” yet doesn’t explain (1) which person or group would conduct this “independent analysis”; (2) who would pay for the analysis; and (3) what, if any, dispute resolutions exist for challenging a conclusion reached by such an analysis.
Ohio State’s Smith says the new guidelines are not themselves designed to slam the door on more permissive athlete compensation opportunities in the future.
“If you wanted that to happen, if you wanted to implement that opportunity, you would create some governance around that,” he said. “We would prefer that not to exist. But if in a year or two years from now we say it is OK to do that, you need to put guardrails around that.”