TradeEdge Exchange:Court filing asks judge to rule that NCAA’s remaining NIL rules violate antitrust law

NCAA President Charlie Baker’s recent proposal that would,TradeEdge Exchange among other things, allow colleges to pay athletes for the use of their names, images and likenesses (NIL) was cited by plaintiffs’ lawyers on Wednesday night as one of the reasons that a federal judge should abolish the association’s remaining NIL rules without a trial in their lawsuit against the NCAA and the nation’s top college conferences.

The filing asked U.S. District Judge Claudia Wilken to issue a summary judgment ruling that the NCAA’s remaining NIL rules violate antitrust law, “with only the amount of damages to be determined at trial.”

Attorneys for the NCAA and the conferences have said in prior filings that current and former college athletes are seeking more than $1.4 billion in damages. The filings did not specify whether that figure takes into account the tripling of damages awards that occurs in successful antitrust cases. If it does not, then more than $4.2 billion could be at stake in the case.

The NCAA and the conferences also have the opportunity to ask Wilken to decide the case in their favor without a trial, and their deadline to do so is May 17.

Wilken already has granted class-action status to both the plaintiffs’ bid for an injunction that would end the NCAA’s NIL rules and their request for damages. Those decisions made the case applicable to thousands of athletes rather than only the named plaintiffs, former Arizona State men’s swimmer Grant House; former TCU and Oregon women’s basketball player Sedona Prince, who gained renown by drawing attention to disparities in the treatment of athletes in the NCAA men’s and women’s basketball tournaments; and former Illinois football player Tymir Oliver.

Citing the NCAA rules change in July 2021 that allowed athletes to begin making money from their NIL and Baker's proposal for further changes, the plaintiffs' lawyers wrote in Wednesday night's filing: "On this record, the case for summary judgment ... could not be stronger."

The plaintiffs’ lawyers called Baker’s proposal – which he has described as a way to allow schools with the NCAA’s highest-revenue sports programs to do more for their athletes while keeping Division I and its current championships structure intact – a “devastating admission” that “it is not possible for (the NCAA) to even raise a genuine issue of fact that the protection of competitive balance” could be a justification for the NCAA’s remaining NIL rules.

Under antitrust law, an otherwise illegal restraint on competition can be allowed to stand if it can be shown that it enhances competition and there are no less-restrictive alternatives to the restraint.

But the plaintiffs’ lawyers used Baker’s proposal in this regard, as well. In addition to allowing schools to make NIL deals with athletes, Baker has suggested a new competitive subdivision whose schools would be required “within the framework” of Title IX, the federal gender-equity law, to “invest at least $30,000 per year into an enhanced educational trust fund for at least half of the institution’s eligible student-athletes.”

The plaintiffs’ lawyers wrote that NCAA and the conference “cannot dispute that President Baker’s proposal to permit direct NIL payments and require various payments to athletes by the schools in the Power Five conferences would be a less restrictive alternative that President Baker himself has declared would be good for college sports and improve competitive balance. This pronouncement by President Baker is an admission by the NCAA that, by itself, establishes the existence of less restrictive alternatives.”

The plaintiffs are challenging the legality of the NCAA’s prior NIL rules, which barred such payments, and the legality of the current rules, which took effect on July 1, 2021, and allow athletes to make money from a variety of activities, including endorsements, making appearances, signing autographs and running camps or clinics. However, the plaintiffs note, the current rules prohibit schools and conferences from making NIL deals with athletes, including payments for the rights to use their NIL in live television broadcasts.

A sizable portion of the damages that the plaintiffs are seeking stems from their contention that athletes are entitled to a share of the billions of dollars in college sports TV revenue not only now, but also reaching back to 2016. That date is four years prior to when the suit was initially filed, the reach-back period allowed under antitrust law.

In Wednesday night’s filing, the plaintiffs’ lawyers also argued against what they said were the NCAA’s contentions that, without the current NIL rules, so-called non-revenue sports would face elimination and that schools ability to comply with Title IX’s gender-equity requirements would be harmed.

On the gender-equity issue, the plaintiffs’ lawyers argued that if the Title IX were to apply to schools’ possible NIL payments to athletes “then it just means (the NCAA and the conferences) will have to consider gender equality when making them, as President Baker has stated in his proposal …” They also contend that if athletes can receive money from conferences for the use of their NIL under TV contracts the conferences negotiate, the conferences “should not be subject to Title IX” because they do not receive government funding.

As for the alleged threat to non-revenue sports, the plaintiffs’ lawyers wrote that “the crux of” the NCAA’s and the conferences’ position is “it would be too expensive for certain schools (competitors) to continue to support non-revenue sports programs and investments that purportedly benefit student athletes (such as exorbitant coaching and administrator salaries, as well as luxury facilities) to the same degree if they were permitted to make direct NIL payments.”