One of the great sports law misunderstandings in college sports is that the U.S. Supreme Court made NIL possible through its ruling in NCAA v. Alston (2021).
The reality is that Alston had nothing to do with NIL or even compensation for playing sports. The Supreme Court held that the NCAA and its member institutions violated federal antitrust law by agreeing to limit each member’s opportunities to compensate college athletes for education-related expenses. Those expenses included costs related to study abroad programs, postgraduate scholarships, vocational school scholarships, technology fees and other costs that are connected to education. Given that a core mission of the NCAA and its members is to provide quality education to college athletes, rules that make it harder for schools to defray education costs are conceptually problematic.
The antitrust hook was that colleges and conferences are competing businesses. When competitors join hands to price fix—whether it be coordinating how much to charge consumers for a product or service or how much a college can reimburse athletes for their costs of education—that’s a potential antitrust law problem.
Alston also gave the Court an opportunity to clarify the NCAA is not owed a deferential standard of review on antitrust claims. That deferential standard had been observed since the U.S. Supreme Court’s ruling in NCAA v. Board of Regents (1984), a case that concerned NCAA rules restricting schools’ autonomy to broadcast football games on national TV networks. The NCAA lost the case, but Justice John Paul Stevens wrote the NCAA was owed “ample latitude” in setting rules for college athletes.
In Alston, neither the phrase “name, image and likeness” nor “NIL” appears even once in the roughly 13,000 words written by Justice Neil Gorsuch in his majority opinion and Justice Brett Kavanaugh in his concurring opinion. That’s not surprising since NIL wasn’t a topic in Alston. NIL also involves an entirely different area of law: the right of publicity.
The right of publicity is found in state laws and there is no accompanying federal statute. The right generally forbids the commercial use of another person’s identity—be it their name, image and likeness and sometimes also their voice, mannerisms, signature and other characteristics that make them unique—without their consent. The right of publicity is an essential area of law for entertainers, actors, musicians, artists and influencers. In the college sports context, “NIL” is best understood as the removal of NCAA restraints on college athletes’ ability to use a right they already have, the right of publicity, without running afoul of NCAA eligibility rules.
So why are Alston and NIL often tied together?
A big reason is timing. The Alston decision was released on June 21, 2021. That was only 10 days before a group of state NIL statutes were set to go into effect. Those statutes stated, in sum, that the NCAA, conferences and colleges could not impose eligibility penalties on college athletes who used their right of publicity under certain conditions. During June 2021, the NCAA pleaded with Congress to pass legislation that would have preempted the impending state NIL statutes, create national rules for NIL and ensure NCAA control over NIL (I know this well, I testified before the U.S. Senate on that topic). Congress failed to act, and the NCAA declined to seek restraining orders and injunctions against NIL statutes before they went into effect. The larger point is that two different NCAA legal topics–antitrust law and right of publicity–were likely conflated by some because key moments in both took place around the same time.
There’s a far-reaching interpretation of Alston that it signals the demise of amateurism, and that the decision served as a warning to the NCAA that it could not restrict athletes’ economic rights, be they about playing sports or NIL.
There are a few problems with that viewpoint.
First, the facts and legal challenges presented to the Supreme Court in Alston were not about play-for-play or NIL. A sensible reading of a court ruling is one that takes the ruling for what it is, not what a reader wants it to be.
Second, the justices in Alston went out of their way to clarify the ruling only concerned “a narrow subset” of NCAA rules tied to education-related expenses. NCAA rules related to compensation for playing sports, the justices noted, remained in good standing.
Third, there is reason to believe some of the justices would side in favor of the NCAA on other types of athlete compensation restrictions. During the oral argument for Alston, several of the justices noticeably expressed worry about the commercialization of college sports and the morphing of college athletes into pro athletes. It’s one thing to consider limitations on athletes being compensated for expenses that further their education, it’s another to consider limitations on paying athletes to play sports or to endorse products.
Fourth, and maybe most important, even if Alston could be expansively read as lending support to college athletes using NIL, that support would only relate to antitrust scrutiny of NIL rules. If the NCAA legally challenges NIL statutes, the challenge wouldn’t occur under antitrust law. It would take place under constitutional law, specifically the Commerce Clause (Article I, Section 8) and the Contract Clause (Article I, Section 10). The gist of that legal attack, as Sportico previously explained in detail, would be to portray state NIL laws as unconstitutionally preventing the NCAA from enforcing rules nationally and as interfering with compliance of rules member schools contractually accepted.
More to the point, that’s not an antitrust case.
So if Alston was only about education-related expenses, why would the NCAA settle the House, Carter and Hubbard antitrust litigations? The settlement involves paying around $2.8 billion in damages on account of lost NIL, video game and broadcasting opportunities for athletes and accepting a new framework where colleges can directly pay athletes on account of a revenue share of media, ticket and sponsorship revenue.
The NCAA (and power conferences) tentatively settled these cases last year for several reasons, with risk avoidance serving as a main reason.
The presiding judge, U.S. District Judge Claudia Wilken, had already denied the NCAA its motion to dismiss House and, on several occasions, she sharply rebuked the NCAA’s legal arguments. There were also projections that if the NCAA lost these cases, the association and its members could have faced more than $20 billion in damages. The settlement also provides the NCAA with useful cost-controls and compliance measures, such as a cap on revenue sharing and independent review of NIL deals in excess of $600 to ensure they’re not cloaking pay-for-play arrangements.
But the NCAA didn’t “have to” settle House, Carter and Hubbard. Even if Wilken wasn’t persuaded by the NCAA, jurors might have been, especially if they worry that college sports’ distinctiveness is eroding as it becomes more like pro sports. So too might have the U.S. Court of Appeals for the Ninth Circuit and the U.S. Supreme Court. But the NCAA isn’t taking the chance. It has joined hands with attorneys for the athlete plaintiffs in urging Wilken to approve the settlement.
That still doesn’t mean the Supreme Court made NIL possible through Alston.
