The Big One: Tennessee vs. NCAA NIL lawsuit affects entire college landscape

This feels like the big one, and it’s not just about Tennessee. It’s also about your favorite school.

To this point, cases brought into federal court have skated around the margins of paying players in college sports. A jumble of state name, image and likeness laws and vague NCAA “guidance” created a system that still felt trapped between free enterprise and the horizontal price fixing scheme the schools — through the NCAA — used to ensure compensation for college athletes remained flat while coaches and administrators raked in growing revenues.

Wednesday’s lawsuit against the NCAA, brought by the attorneys general from Tennessee and Virginia in federal court in Knoxville, feels far more direct. It asks the court to declare the NCAA’s ban discussion of NIL payments with recruits to be an illegal restraint of trade.

Essentially, it asks the court to end the fantasy. NCAA leaders want a world where highly sought-after recruits, be they coming out of high school or in the transfer portal, don’t consider how much they’ll be compensated before they choose a school. That world doesn’t exist. That world has never existed.

Since NIL payments were allowed by the NCAA in 2021, recruits, schools and collectives have twisted themselves in semantic knots to pretend they aren’t engaging in the same kind of negotiations everyone in this country uses when deciding how much compensation a person will receive for providing a particular service. A temporary restraining order or an injunction in this case would pierce that veil. It would remove much — but not all — of the pretense, because it would acknowledge how the world actually works. Yes, schools (through collectives) are paying players for their value as athletes and not for their endorsement potential. Yes, athletes want to know how much money they’re going to make before they decide where to play. They don’t always choose the highest bidder, but just like any other decision to take a deal in exchange for compensation, they want all the information.

This day was coming the moment the Supreme Court ruled 9-0 in Alston v. NCAA in 2021. Guess who was on the business end of that shutout? The majority opinion in that case made clear that any more NCAA price fixing rules that came before the court would be in extreme danger of being declared illegal.

“…the NCAA is thumbing its nose at the law,” the AGs write in their complaint filed Wednesday morning. “After allowing NIL licensing to emerge nationwide, the NCAA is trying to stop that market from functioning. This month, it announced new proposals related to ‘student-athlete protections in NIL.’ These ‘protections’ allow current athletes to pursue NIL compensation. But it bans prospective college athletes (including current college athletes looking to transfer to another school who are in the ‘transfer portal’) from discussing potential NIL opportunities before they actually enroll. 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 depressive effect on coaches’ wages in such a dysfunctional market is obvious).”

This case came Wednesday because the NCAA decided to target Tennessee’s quarterback. The push Tennessee AG Jonathan Skrmetti needed was the danger that the Volunteers or the Spyre Sports collective or QB Nico Iamaleava might be harmed by the NCAA. There is no more politically savvy move in the Volunteer state than to protect the Big Orange. And Tennessee needs protection in this particular case because it used the NCAA’s enforcement division as a weapon to get out of paying failing coach Jeremy Pruitt his buyout. That gambit set up Tennessee for repeat violator status. And since the NCAA has adopted a “presumed guilty” — no, really — mindset regarding NIL cases, Tennessee could face bigger issues if the NCAA determined the contract between Iamaleava and Spyre was a recruiting inducement or if it violated whatever rules the NCAA has decided matter this week.

But this case isn’t just about Tennessee. That’s why Virginia’s AG joined the fray. That’s why others may jump on board the way they did when West Virginia challenged the NCAA’s transfer rules in court last month. The reason this matters for everyone — and why trying to enforce these rules was so shortsighted on the part of the NCAA — is that while Iamaleava’s contract was one of the first of its kind, it has been copied many times over at every major football and basketball school in the country.

Because markets tend to move quickly to find their levels, the NIL market rapidly evolved into the most efficient form it could given the tangle of state laws and NCAA rules. If you want to sign a good football or basketball player, that player will want to know what he or she can make in NIL money. It’s a key piece of information. If the NCAA can get Tennessee for Iamaleava, then it can get pretty much every school in a power conference.

Why NCAA leaders assumed the schools would simply accept that possibility — even though they haven’t been given the usual opportunities to shape the rules as members of the organization — is mystifying. This wave of enforcement includes other cases that haven’t surfaced in the news yet. Every school is at risk. So of course the schools are going to act to nullify the risk as quickly as possible.

They’ve chosen something close to a nuclear option.

If the AGs get their injunction, will schools continue to use collectives to pay recruits to come play for them? Yes they will. And they may change the rules so they don’t need the collectives at all. The system won’t completely embrace common sense, but it will inch closer.

It’s also possible the National Labor Relations Board or the courts may force the schools to treat athletes as employees. This would allow for collective bargaining that would allow the schools to make rules — regarding compensation, transfers or anything else — that can’t be challenged on antitrust grounds.

That day is probably coming. Just as this day always was.

The NCAA just hastened the process by targeting a school that was finally pumped about its five-star QB.