- Posted on: Oct 14 2021
By: Michael Lehr
Ready – Set – Shift: NCAA’s NIL Overhaul
NCAA Student-Athletes MAY Now Be Able to Monetize Their Name, Image, and Likeness | Part 1
Recently, in NCAA v. Alston, the United States Supreme Court reviewed whether the National Collegiate Athletic Association’s (“NCAA”) long-standing rules restricting “education-related benefits” violate the Sherman Antitrust Act (see, NCAA v. Alston, 141 S. Ct. 2141 (2021)).
The Court held that the trial court and Ninth Circuit Court of Appeals properly enjoined the NCAA from enforcing certain restrictions. While the Court did not specifically hold that NCAA athletes may be paid for their athletic performance; even so, of import to this article, the Court addressed limitations the NCAA placed upon its member educational institutions and athletes, which limitations either directly or effectively eliminated possibilities for certain revenue streams to flow to athletes. The Court crafted its opinion in a manner reflective of what many state legislatures had already recognized, . . . that the NCAA’s “monopsony” (a legal term indicating there is but a single buyer) is not without limit. Just days later, on June 30, 2021, the NCAA announced an interim policy allowing NCAA student-athletes to “benefit from their name, image, and likeness[.]” It seems – with the U.S. Supreme Court’s ruling and the NCAA’s apparently responsive consequential shift on revenue restrictions – that the doors for NIL-related revenue have now swung wide open, . . . but, have they really?
It is fairly likely that the reader is familiar with the current NCAA through some form of interaction with NCAA athletics – either by direct participation in, viewing, or attending an NCAA event. It is also well known that the NCAA is a so-called “member-led” organization – currently comprised of 102 athletic conferences, 1098 colleges, and universities – that governs 24 sports across three NCAA divisions (i.e., D-I, D-II, D-III). To give context to the NCAA’s size, in 2019, the NCAA took in USD $18.9 billion in revenue, which would have placed it within the Fortune 200 for 2021. However, the NCAA wasn’t always the monopsony behemoth it is today. In fact, despite Harvard University first opening its doors in 1636, true college sports didn’t come about in the United States until after the Civil War. So, perhaps one’s understanding of the Court’s ruling in NCAA v. Alston, and the NCAA’s response thereto, would be aided by knowing a bit more about the NCAA through its backstory on how they came to lord over college athletics.
The first ever-recorded intercollegiate sporting event took place in August 1852 – a regatta between the rowing teams of Harvard and Yale Universities. While it would take until the 1870s for intercollegiate sports to play a large part in American lives, by the 1890s collegiate sports were a full commercial enterprise ripe with salaried coaches, staff, admission costs, gambling, and use of paid “ringers” to win games. Critics propounded that the introduction of money and the commercialization of the sports undercut the amateurism of the games and harmed college athletics as a whole, but that did little to stop the monetary momentum building inside of intercollegiate athletics at the time.
However, up to the Courts decision in NCAA v. Alston, the NCAA presented itself as a proponent of amateur sports. So, . . .what was it that caused intercollegiate athletics to meander away from commercialization?
By the late 1800s, American football was among the most popular of sports. However, by the early 1900s, the significant number and severity of football injuries, including deaths, gave rise for alarm. For example, in 1893, there were seven football fatalities, 12 in 1894, and a staggering 18 football fatalities in 1905. Those 18 deaths (and well over a hundred serious injuries) caught the eye of President Theodore Roosevelt, who organized a meeting between Harvard, Yale, and Princeton to review the rules of the sport in an attempt to make it safer for the participants as well as to preserve the amateur nature of the game.
A year later, 62 colleges and universities chartered the Intercollegiate Athletic Association of the United States (“IAAUS”) with the purpose of setting recognized standard rules and regulations concerning college sports. Moreover, in the very first iteration of the IAAUS’ By-Laws, the members admonished that “no student shall represent a College or University in any intercollegiate game or contest who is paid or receive, directly or indirectly, any money or financial concession.” IAAUS Constitution By-Laws, Art. VII, §3 (1906). Four years later, the IAAUS formally changed its name to the National Collegiate Athletic Association (“NCAA”).
This is part one of a four part series; stay tuned for part two of “Ready – Set – Shift: NCAA’s NIL Overhaul”!
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The author, Michael Lehr, is an Associate at the law firm of Dunlap Bennett & Ludwig, PLLC. Kurt R. Klaus and Alex Butterman contributed to writing this article.
Dunlap Bennett and Ludwig, PLLC: is a multi-state and international law firm whose Media & Entertainment Law Section attorneys have decades of experience dealing with NIL (individual name, image, and likeness) matters, intellectual property, business formation, and disputes, and commercial transactions.
Michael Lehr is a litigation attorney who routinely deals with intellectual property disputes such as trademarks and copyrights that may arise in modern media/entertainment. Michael provides businesses and individuals with legal counsel whenever disputes arise and helps his clients navigate the complex waters of litigation—while trying to help them avoid it at all cost. Michael is an avid sports fan.
Kurt R. Klaus (Media & Entertainment Law Section Lead) is a media/entertainment business and legal affairs attorney who provides counsel to individuals and companies working in entertainment (television, music, digital, talent, copyrights) and branding (influencers, trademarks, social media, compliance). Kurt structures conventional and creative solutions for clients that mirror the needs of emerging and traditional media/content landscapes. He supports contractual and pre-litigation aspects of entertainment, marketing, and social media functions and partnerships, including media content production and distribution, influencer engagements, branding transactions, and NIL rights and negotiations. Prior to practicing law, Kurt produced television commercials and worked in the recording industry. Kurt is the father of an NCAA D-I athlete and an amateur sports enthusiast.
Alex Butterman (Trademarks Section Lead) is an intellectual property attorney specializing in the procurement, registration, enforcement, and maintenance of trademark and copyright rights and leads the trademark registration practice at Dunlap Bennett & Ludwig. Alex was a trademark examining attorney at the U.S. Patent and Trademark Office and has worked in several intellectual property boutique law firms for the past two and a half decades. Alex is an avid sports fan, and in law school, authored an article about the Major League Baseball anti-trust exemption, which was published in an American Bar Association section journal.
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