The NCAA has come to an agreement regarding a lawsuit involving the attorneys general from Tennessee and Virginia, along with several other states, over its restrictions on name, image, and likeness (NIL) compensation for recruits.
A preliminary settlement has been reached, with a term sheet submitted to the U.S. District Court for the Eastern District of Tennessee in Greeneville. A status report was anticipated on the same day. The finalization of the settlement is expected to coincide with a request for a permanent injunction, which will be completed by March 17, as noted in the documentation.
In a statement, the NCAA confirmed the settlement effectively addresses the concerns raised by Tennessee and the other states involved without hindering the conclusions of other related settlements. Full details of the agreement are expected to be disclosed later in the spring.
Attorney General of Tennessee, Jonathan Skrmetti, announced that they have successfully stalled the NCAA’s “unlawful enforcement” against students and institutions in Tennessee. He noted that this preliminary settlement establishes a foundation for a lasting resolution.
This outcome resolves the antitrust lawsuit initiated one year ago by the attorneys general of Tennessee and Virginia, which contested the NCAA’s prohibition on using name, image, and likeness compensation during the recruitment of college athletes. This action followed the NCAA’s inquiry into potential recruiting violations concerning the University of Tennessee athletics.
U.S. District Judge Clifton Corker had previously issued a preliminary injunction last February, which challenged a long-standing NCAA principle of amateurism that restricted third parties from compensating recruits for attending specific schools. Corker’s ruling prohibited the NCAA from enforcing its NIL compensation rules for recruits, as requested by Tennessee and Virginia.
This ruling dealt a significant blow to the NCAA’s regulatory authority over college sports and the over 500,000 athletes involved.
The NCAA had sought an extension before responding to the lawsuit on January 20, which was also joined by New York, Florida, and Washington, D.C. A status conference was set for January 23.
The lawsuit argued that the NCAA was imposing unfair restrictions on athletes regarding their ability to commercially utilize their name, image, and likeness during a crucial time in the recruiting process. It claimed that these anticompetitive rules violated the Sherman Act and negatively impacted the states and their athletes, warranting a declaration of their illegality and a corresponding injunction.
Despite a request by Skrmetti and Virginia Attorney General Jason Miyares for a temporary restraining order, the judge issued the preliminary injunction, preventing the NCAA from implementing its NIL recruiting regulations during the progression of the lawsuit.
As the parties work out the final specifics, Skrmetti confirmed that the attorneys general have come to an agreement that safeguards the rights of athletes regarding their name, image, and likeness during recruitment. Furthermore, the NCAA would be prohibited from reinstating its NIL recruiting ban.
This legal battle stemmed from the University of Tennessee chancellor’s public criticism of the NCAA following the initiation of the investigation concerning recruiting violations tied to NIL agreements made between athletes and an organization supported by boosters.
The NCAA is currently facing multiple legal challenges. Additionally, Friday marked the deadline for submitting objections related to an extensive House settlement addressing $2.8 billion of antitrust claims against the NCAA and major college sports conferences. Concerns raised in these objections have included issues surrounding roster limits, Title IX compliance, and allegations of restrictive salary caps.
This House agreement proposes that former athletes receive millions in back pay while allowing schools to allocate up to $20.5 million annually to athletes for the use of their name and likeness.
