Judge grants preliminary injunction over NIL rules

A federal judge in Tennessee granted a preliminary injunction 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 student-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 student-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 student-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 student-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.

Virginia Attorney General Jason Miyares called the win in court “rewarding” and saw it as an extension of the Supreme Court ruling in the NCAA vs. Alston case in 2021, which he said should have put the NCAA “on notice” for its legal vulnerabilities.

“We’re finally getting to the point where you’re seeing real student athlete empowerment at the collegiate level,” Miyares told ESPN in a phone interview late Friday. “The NCAA in an arbitrary and capricious manner was trying to restrict that.”

Miyares said the NCAA model has gotten to the point where it’s unsustainable, pointing out the billion-dollar NCAA tournament television contract that was signed without the players getting any cut of it. The potential of change to NIL rules that would come with this ruling could just be the start.

“I think could be the first steps of significant change,” he said. “And I think it’s been coming for a long time.”

College athletics attorney Tom Mars, who worked with a Tennessee collective, Spyre Sports Group, on this case, said the ruling could mark the beginning of the end for the NCAA.

“I think this will be one more brick in the wall that is the end of the NCAA,” Mars said. “Short of intervention by Congress, the demise of the NCAA now seems inevitable based on nothing but a financial analysis, as it appears the NCAA is poised to lose all of its upcoming antitrust cases. The cumulative effect of which, could make the NCAA financially insolvent.”

“A bad case is a bad case, and they’ve put all their defenses forward,” Mars added. “And there’s no precedent anywhere in the United States that supports their defenses.”

“Turning upside down rules overwhelmingly supported by member schools will aggravate an already chaotic collegiate environment, further diminishing protections for student-athletes from exploitation,” the NCAA said in a statement. “The NCAA fully supports student-athletes making money from their name, image and likeness and is making changes to deliver more benefits to student-athletes, but an endless patchwork of state laws and court opinions make clear partnering with Congress is necessary to provide stability for the future of all college athletes.”

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 a student-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 student-athletes to transfer as many times as they would like during their college careers while the case is pending.