Name, Image, and Likeness: The NCAA and College Sports Landscape One Year After Alston
July 1, 2022
By: Joshua A. Claybourn and C.J. Donegan
The college sports landscape changed forever on July 1, 2021, when the NCAA permitted student-athletes to earn compensation for their name, image, and likeness (NIL). Now, a year later, we look back and evaluate how this change happened; the impact of this change on the NCAA, institutions, and student athletes; and the future of NIL.
Background
In June 2021, the NCAA was preparing to launch a new NIL policy years in the making. But the Supreme Court upended the NCAA’s plans in its decision in National Collegiate Athletic Assoc. v. Alston.[1]That case concerned the NCAA’s cap on educational related expenses. Ultimately, the Court determined that the NCAA’s restrictions on education-related expenses violated the Sherman Act, forcing the NCAA to shift course quickly and drastically on NIL policies.
In the past, the NCAA received a “quick-look” from courts regarding their anti-trust policies, which generally assumed the NCAA policies were in the best interest of preserving amateur college athletics. But the Alston decision denied the NCAA’s request for an “abbreviated deferential review” on potential anti-trust violations. Going forward, the NCAA will receive a “hard-look” review and subjecting the NCAA to a full rule of reason analysis for suits under the Sherman Act. A rule of reason analysis is “‘a fact-specific assessment of market power and market structure’ aimed at assessing the challenged restraint's ‘actual effect on competition’—especially its capacity to reduce output and increase price.”[2]
Alston’s second major impact came from a concurrence by Justice Kavanaugh, himself a former student-athlete. Justice Kavanaugh criticized the NCAA’s business model and asserted that Alston did not go far enough in striking down the NCAA’s policies regarding player compensation. Although Kavanaugh’s concurrence is not binding, it may invite further anti-trust lawsuits against the NCAA and force the NCAA to re-evaluate all of its related policies.
Post-Alston
The NCAA heeded Justice Kavanaugh’s concurrence in Alston and dramatically re-evaluated their structure. In January 2022, the NCAA ratified a new constitution decentralizing the NCAA’s governing power to give more control to the divisions and conferences, thereby reducing the NCAA’s legal liability in future anti-trust suits.
Furthermore, following the Alston decision, the NCAA scrapped their longstanding policies regarding NIL and instead issued a two-path policy for schools: if the state has an NIL law then schools must follow that state law or, if the state does not have an NIL law, schools may write their own institutional policy. The only NCAA restrictions concern utilizing NIL as an improper recruiting inducement. Additionally, NCAA regulations prevent NIL deals based on player performance (also known as “pay for play”). Many schools (and even states) have since raced to adopt NIL policies that will help boost recruitment. For example, Alabama repealed their existing NIL law to empower schools to create their own favorable policies. Some other states have revised their NIL laws to make them even less restrictive.
It is a BIG DEAL
It is difficult to overstate NIL’s impacts: from the announced return of EA’s College Football game, to lucrative NIL compensation packages for student-athletes, to a reshaped recruiting landscape that benefits the biggest and wealthiest schools. Ohio State football player Quinn Ewers reportedly earned at least $1.4 million in NIL deals, Alabama football quarterback Bryce Young earned $800,000, and Chicago State basketball guard Anthony Hamilton Jr. earned $400,000, all in NIL compensation. These NIL packages outpace what many athletes would earn playing as rookies for a professional sports team.
Male athletes are not the only ones to benefit from NIL—many female student athletes seized the opportunity to utilize their personal brands for compensation. To commemorate the 50th anniversary of Title IX, the dating app Bumble signed 50 women athletes as brand ambassadors.
NIL deals are also dramatically reshaping the way student athletes consider transferring. Previously, a student athlete would lose a year of eligibility for transferring schools (unless granted an NCAA waiver), but under new policies they may freely transfer without penalty one time during their college athletic career. When combined with lucrative NIL offers, the NCAA has seen a massive spike in player transfers. However, when the money from these NIL deals comes from boosters, it is a clear violation of NCAA policy regarding improper recruiting inducements. The NCAA sought to address the issue through new guidelines regarding booster involvement in May of this year, suggesting the NCAA’s approach to booster involvement moving forward will be much more aggressive.
What’s Next?
The new NIL era of college athletics often gets described as “the wild west.” Eventually, more regulations from either the NCAA or legislatures may set in and create a more orderly landscape—for example, under the NCAA’s new constitution, that body may make more changes. Either way, we can expect college athletics to continue changing and shifting in response to NIL’s opportunities and challenges.
[1] 141 S. Ct. 2141
[2] Id. quoting Ohio v. Am. Express Co., 138 S. Ct. 2274, 2284 (2018).