Virginia Attorney General Jason Miyares filed a lawsuit against the NCAA in federal court Wednesday alleging that the nation’s largest governance entity for intercollegiate athletics violated the Sherman Antitrust Act with its regulations on student-athlete name, image and likeness agreements.
Virginia joined the attorney general from Tennessee in the suit, which was filed in the Eastern District of Tennessee.
The case centers around the NCAA’s rules against using NIL compensation — student-athletes controlling and profiting from their own name, image and likeness by participating in endorsements, public appearances and other activities — as a recruiting tool for prospective student-athletes. The attorneys general seek a court order confirming that the NCAA’s NIL-recruiting ban is in defiance of the Sherman Act.
“This is about fundamental fairness,” Miyares said in a Wednesday afternoon interview. “These are not normal students in the sense that, when they’re on campus, their entire lives revolve around their sport.”
The lawsuit comes in the wake of several recent actions taken by the NCAA against institutions in the NIL realm. On Jan. 11, the NCAA placed Florida State University on a two-year probation, fined the school $5,000 and suspended an assistant football coach three games for facilitating contact between a recruit and a booster who offered an NIL deal. Earlier this week, University of Tennessee learned it was being investigated by the NCAA for alleged “major violations” associated with that school’s NIL activities.
The NCAA broke precedent in issuing a statement on the Tennessee investigation and lawsuit.
“[I]t is important to remember that NCAA member schools and conferences not only make the rules but routinely call for greater enforcement of those rules and holding violators accountable. In recent years, this has been especially true as it relates to establishing and enforcing a consistent set of national rules intended to manage the name, image and likeness environment,” the statement said. “This legal action would exacerbate what our members themselves have frequently described as a ‘wild west’ atmosphere, further tilting competitive imbalance among schools in neighboring states, and diminishing protections for student-athletes from potential exploitation. The NCAA remains firmly committed to protecting and expanding student-athletes’ NIL rights and opportunities. However, our membership has steadfastly supported the prohibition on impermissible recruiting contacts, booster involvement in recruiting prospects and the use of NIL offers as recruiting inducements.”
Miyares said the Tennessee investigation did not influence his office’s decision to join that state’s attorney general in the lawsuit against the NCAA.
The reality of NCAA student-athletes holding rights to their name, image and likeness is a relatively contemporary issue. Prior to 2021, NIL deals for student-athletes were a violation of the NCAA’s amateurism clause. But that argument was turned on its head in June of that year when the U.S. Supreme Court ruled unanimously in favor of student-athletes in NCAA v. Alston, citing the Sherman Act. The decision opened the door for student-athletes to both engage in NIL activities and hire representation to aid them in that endeavor.
The NCAA acted quickly, instituting guidelines in the summer of 2021 that allowed student-athletes to engage in NIL activities as state law allows and stating that athletes “should” report those NIL activities to the institutions for which they compete. But those guidelines were vague, resulting in a burgeoning billion-dollar industry largely outside the scope of the NCAA or its member-school athletic departments and blurring the line between the influence of institutions versus the boosters that support their teams on both prospective and current student-athletes. (Most schools, including nearly every Division I institution in Virginia, established a collective outside the purview of the athletic department to streamline NIL activities for athletes.)
The NCAA attempted to clarify those lines at its January 2024 convention, instituting more concrete rules that require student-athletes to disclose deals over $600 in value, standardizing the contract-drawing process, providing NIL education to student-athletes, and instituting a voluntary registration process for agents and other NIL service providers.
Miyares, who himself sponsored NIL legislation that died in committee as a delegate in 2020, said that the NCAA changing its rules on the issue was inherently unfair to student-athletes as well. At least one legal expert agreed.
“[The NCAA is] trying to recreate what they lost in 2021 when they basically gave carte blanche to NIL rulemaking,” said Michael LeRoy, a labor law expert and professor at the University of Illinois College of Law. “I would suspect from their point of view they’re just elaborating on what that means.”
But the landscape has shifted dramatically in that time, LeRoy continued.
“The policies don’t reflect the realities of the NIL marketplace,” he said. “Two years later, we see this unsustainable competition between schools where they are essentially destabilizing the athletic championship model. A few schools hoard all the talent and the resources.”
That is essentially the argument that the attorneys general plan to make in court; the NIL playing field is inherently unfair because it does not afford prospective student-athletes the opportunity to project their compensation during the recruiting process.
“It’s like a coach looking for a new job, and freely talking to many different schools, but being unable to negotiate salary until after he’s picked one,” the lawsuit said.
Both the attorneys general and the NCAA claim to be protecting student-athletes from exploitation. The NCAA contended its new rules will provide greater transparency for student-athletes seeking NIL opportunities and that its registration process will keep agents from working with athletes in bad faith. Miyares cited the association’s staggering television rights contracts with CBS and Turner Sports for men’s basketball ($1.1 billion annually) and ESPN for 40 more championships ($115 million per year) as evidence of the NCAA’s continued exploitation of its student-athletes.
“It’s their labor and their sweat that is building these massive revenues,” Miyares said. “That money is not money that these athletes ever see.”
For most student-athletes, who will never make a living competing in their chosen sports, Miyares said the college years are their only opportunity to monetize their athletic talents. He said that he hopes Wednesday’s case does not reach the Supreme Court like the Alston case did in 2021, but he is confident that, should it, the high court would rule in the states’ favor.
“They all but signaled that if the case got back in front of them, they would hold that the NCAA is in violation of the Sherman Antitrust Act,” Miyares said.
LeRoy agreed.
“I think both states have an argument here,” the law professor said. “The Sherman Act is meant to promote competition, and it’s a good thing, especially for the athletes, if the schools are competing against each other.”
LeRoy added that the vast variety in size and resources at NCAA member institutions make questions like the NIL issue nearly impossible to regulate.
“It legislates across a span of so many different schools and so many different circumstances that they don’t address market conditions in a reasonable way,” he said.
Meanwhile, the Virginia General Assembly has been busy talking about name, image and likeness as well. Two bills, one in the House of Delegates and one in the Senate, have been making their ways through committee this week — one from Del. Terry Austin, R-Botetourt County, the other from state Sen. Aaron Rouse, D-Virginia Beach. The nearly identical bills — HB 1505 and SB 678 — amend 2022 legislation on the topic to prohibit any body from investigating or penalizing institutions or student-athletes for NIL-related activities, holding its original exceptions against deals with certain industries, such as alcohol, gambling and weapons, among others. Representatives from both Virginia Tech and University of Virginia spoke in support of the Senate bill in this week’s Higher Education Subcommittee meeting. No one spoke in opposition.
UVa and the Coastal Athletic Association, a Richmond-based conference of NCAA Division I schools including Hampton and William & Mary, declined to comment Wednesday. Administrators from Virginia Tech, Liberty, Radford, the Atlantic Coast Conference and the Atlantic 10 Conference did not immediately respond to interview requests.