The NCAA, Antitrust, and Paying Student-Athletes for Use of Names, Images, and Likenesses

There have been two recent major developments with respect to the NCAA and student-athletes.

First, the NCAA's Board of Governors announced that it supports "rule changes to allow student-athletes to receive compensation for third-party endorsements both related to and separate from athletics" and directed its divisions to begin developing such rules. This change in position is driven primarily by state and federal legislative efforts (see for example, this recently enacted California law)  to require the NCAA to permit such compensation. At the same time, the Board stated that any such rules must follow certain guidelines, specifically:

• Ensuring student-athletes are treated similarly to nonathlete students unless a compelling reason exists to differentiate. 
• Maintaining the priorities of education and the collegiate experience to provide opportunities for student-athlete success. 
• Ensuring rules are transparent, focused and enforceable, and facilitating fair and balanced competition. 
• Making clear the distinction between collegiate and professional opportunities. 
• Making clear that compensation for athletics performance or participation is impermissible. 
• Reaffirming that student-athletes are students first and not employees of the university. 
• Enhancing principles of diversity, inclusion and gender equity. 
• Protecting the recruiting environment and prohibiting inducements to select, remain at or transfer to a specific institution.

Second, the NCAA lost its appeal of a federal district court decision that enjoined the NCAA from enforcing its rules restricting the education-related benefits its members may offer students who play Football Bowl Subdivision football and Division 1 basketball. In In re NCAA Grant-in-Aid Cap Antitrust Litigation, the U.S. Court of Appeals for the Ninth Circuit held that the rules were unlawful restraints on trade under section 1 of the Sherman Act (15 U.S.C. section 1). This decision follows the NCAA's previous loss at the Ninth Circuit in O'Bannon v. NCAA, 802 F.3d 1049 (2015).

What exactly this developments will mean for student-athletes, college athletics, and the NCAA remains to be seen. For more coverage, see Marc Edelman at Forbes, Politico, Sports Illustrated, and The Wall Street Journal.

Lloyd Mayer