• SMM Law

NCAA Athletes now permitted to earn money from their name, image and likeness

For some time now, there has been a growing movement to allow student-athletes to profit from their participation in college athletics. The National Collegiate Athletic Association (the NCAA) has long held that athletes must maintain amateur status, meaning they cannot profit for their participation in NCAA athletics. As the amount of revenue generated by college athletics, especially the “glamour sports” of basketball and football, have increased, the discrepancy between the multi-million dollar contracts of coaches and the limited compensation of those they coach has become all the more apparent. The result have been an ongoing push by NCAA athletes to financially benefit from their association with the NCAA beyond the standard tuition and small associated benefits that the NCAA maintained fully compensate them for their time, their marketability, and the wear to their bodies.

In the last year, six different states – Florida, Alabama, Georgia, Texas, Mississippi and New Mexico have passed legislation allowing student-athletes to receive compensation for their name, image and likeness. Even with state legislatures pushing them, the NCAA had declined to extend these rights to student-athletes nationwide.

In fact, the NCAA had been reluctant to make take any step to an increase in student compensation, an issue the Supreme Court recently issued a decision in the matter of NCAA v. Alston, 2021 US Lexis 3123. Plaintiffs filed a class-action suit alleging anti-trust violations under the Sherman Act, seeking both the direct compensation and an expansion of educational benefits. A district court declined to address the direct compensation issues, but ruled that the limitation of new benefits being sought by student-athletes, including restrictions on scholarships for graduate schools, paid internships after eligibility, or payment for academic tutoring, violated antitrust rules, while leaving the question of direct compensation untouched for the moment.

Writing for a unanimous court, Justice Gorsuch helped move the ball down the field, agreeing with the District Court that “the NCAA’s conception of amateurism has steadily changed over the years.” Justice Gorusch goes on to acknowledge the NCAA's monopsony power, and poke holes in the NCAA argument that virtually any added form of compensation to student-athletes would be ripe for corruption. The Court ruled that the types of enhanced educational compensation being sought by Plaintiffs “may…allow student-athletes a measure of compensation more consistent with the value they bring to their schools.”

Although the majority opinion does not directly address the compensation for name, image and likeness being introduced by state legislatures, Justice Brett Kavanaugh, in a concurring opinion, sets out the case for direct compensation from both the NCAA and sponsors to student-athletes. Justice Kavanaugh refers to the NCAA's compensation model as being “flatly illegal in almost any other industry in America,” going so far as to refer to the existing regulations as “price-fixing labor.” He writes, “Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate.”

The impact of the Court's decision in Alston was felt immediately. Nine days after the decision was handed down, the NCAA released a new interim policy permitting its student-athletes nationwide from benefit from their name, image and likeness rights, which will stay in place until either federal legislation or a permanent NCAA policy is adopted. College athletes nationwide are now signing their first sponsorship deals, and their ability to capitalize on their respective fame is no longer barred.

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