NCAA clarifies compensation rules but is crackdown likely?
Eleven months after the NCAA lifted most of its restrictions against athletes cashing in on their fame, college sports leaders are trying to send a warning to schools and boosters it believes have crossed a line: There are still rules here and they will be enforced.
But following last year’s Supreme Court ruling against the NCAA in an antitrust case, is a crackdown on so-called collectives brokering name, image and likeness deals still likely — or even possible?
“I didn’t think (the NCAA) would not try at some point,” said Maddie Salamone, a sports attorney and former Duke lacrosse player. “That’s why many attorneys have been kind of giving cautious advice in terms of what is and is not allowed. Especially when it comes to collectives and different NIL deals.”
The NCAA’s Division I Board of Directors on Monday approved guidance developed by a group of college sports administrators, clarifying the types of NIL payments and booster involvement that should be considered recruiting violations.
“Specifically, the guidance defines as a booster any third-party entity that promotes an athletics program, assists with recruiting or assists with providing benefits to recruits, enrolled student-athletes or their family members,” the NCAA release said. “The definition could include ‘collectives’ set up to funnel name, image and likeness deals to prospective student-athletes or enrolled student-athletes who might be considering transferring.”
The NCAA added a reminder: Recruiting rules bar boosters from recruiting or providing benefits to prospects.
The guidance is effective immediately. NCAA enforcement staff was directed to look for possible violations that might have occurred before May 9, 2022, but “pursue only those actions that clearly are contrary to the published interim policy, including the most severe violations of recruiting rules or payment for athletics performance.”
The NCAA neither changed its rules nor created new ones.
“I don’t think they’re even necessarily clarifying the rules,” said attorney Darren Heitner, who helped craft Florida’s NIL law. “My understanding is this is just certain individuals who have made up a working committee deciding that after almost 11 months we want to enforce our rules.”
The rise of booster-funded collectives prompted the board in February to ask the DI Council to review the NCAA’s interim NIL policy. The concern among many in college sports has been that payments from collectives are being made to high school recruits and to college athletes in hopes of getting them to transfer to a particular school.
“Some things look very much like pay-for-play,” Salamone said. “There are rules on the books within the NCAA around boosters. The fact that the NCAA has been hesitant to enforce anything I think has emboldened a lot of people around this issue to be a little bit more obvious.”
Last year, the NCAA removed its longstanding ban against athletes earning money from sponsorship and endorsements deals. What remained in place, however, were three pillars of the NCAA’s amateur athlete model:
— Athletes could not be paid solely for playing their sport;
— Compensation could not be used to lure an athlete to a particular school;
— Financial arrangements must have some type quid pro quo agreement in which the athlete was being paid for services provided, like a social media post or appearance.
The NCAA did not ban boosters from being involved in NIL activity. However, without detailed NCAA rules and with state-level NIL laws differing across the country, it left both schools and the association struggling to determine what activities were impermissible.
Some state laws also prohibit boosters from engaging with recruits, but there has been little appetite for enforcement of those laws.
Should the NCAA start targeting some collectives it could trigger a new round of lawsuits against the association.
Mit Winter, a sports attorney in Kansas City, Missouri, said NCAA enforcement of these rules is not a clear-cut antitrust violation.
“So the question is, under antitrust law, is the rule that’s being enforced reasonable?” Winter said. “And from my reading of everything, the rule that they’re going to be enforcing is the rule that says boosters and other third parties like collectives cannot pay athletes in return for a commitment to a school.”
Heitner advises several collectives and businesses that have made NIL deals with college athletes. He said he has stressed to clients from the start to wait until athletes are at the school of their choice before getting involved.
“I don’t think it’s a collective issue,” he added. “I think it’s just a matter of the NCAA saying, ‘Hey, we’ve always been of the position that boosters cannot influence decision making of athletes, particularly high school athletes who have not yet enrolled at universities.'”
Gabe Feldman, the director of sports law at Tulane, said the NCAA would be best served being forward-looking with its NIL enforcement.
“I think that probably is a safer and probably more fair approach,” Feldman said. “Hindsight is 20/20, but what might have been an even better approach is to have come up with clear rules earlier and started enforcing those so we didn’t get to a situation where it might be unfair to start enforcing the rules.”
College sports conferences and the NCAA have been frequent targets for lawsuits, and last June’s Supreme Court ruling left the door open for even more.
Feldman said the NCAA could be opening itself up to more antitrust exposure by failing to enforce its existing rules. But both antitrust lawsuits and NCAA enforcement are notoriously slow moving.
“This would be able like the tortoise and the tortoise,” Feldman said. “Neither would get done quickly, but there’s a lot of risk in the interim.”
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