NCAA Faces Lawsuit From Tennessee, Virginia Over NIL Enforcement

Last Updated on February 28, 2024

Update: On February 23, 2024, Judge Corker issued a preliminary injunction barring the NCAA from enforcing any rules that would prohibit college athletes or recruits from negotiating with collectives or boosters for NIL deals prior to their commitment to a university. The order also specifically prohibits the NCAA from enforcing its Rule of Restitution, which would have allowed the NCAA to retroactively impose punishment on those breaking the rules if the injunction is later vacated. 

The NCAA has found itself in another legal battle. As first reported by ESPN’s Pete Thamel, the attorney generals from Tennessee and Virginia have filed an antitrust lawsuit over the enforcement of name, image, and likeness rules regarding the inducement of recruits.

Tennessee AG Jonathan Skrmetti claims that the NCAA is breaking federal antitrust laws for their “shifting and opaque series of rules and guidelines” regarding NIL, per Knox News. Virginia Attorney General Jason Miyares filed the lawsuit alongside Skrmetti. In November, Miyares was threatening to pursue legal action against the NCAA over the denial of James Madison University’s full bowl eligibility waiver.

“The NCAA’s NIL-recruiting ban violates federal antitrust law, thwarts the free market, and unfairly limits student athletes,” Miyares wrote in a post to X. “We’re taking them to court.”

The lawsuit came one day after news broke that the University of Tennessee was being investigated by the NCAA for potential NIL violations in multiple sports, as first reported by Pat Forde of Sports Illustrated. The NCAA’s investigation into UT is looking at its largest NIL collective, the Spyre Sports Group, according to Thamel.

The NCAA’s interim NIL policy that was adopted in 2021 contained a loose guideline of rules and regulations. Combined with varying state laws, entities involved in the NIL space have been able to work around the edges with little transparency.

“This legal action would exacerbate what our members themselves have frequently described as a ‘wild west’ atmosphere, further tilting competitive balance among schools in neighboring states, and diminishing protections for student athletes from potential exploitation,” the NCAA wrote in a statement. “The NCAA remains firmly committed to protecting and expanding student athletes’ NIL rights and opportunities.”

The University of Tennessee’s response

University of Tennessee Chancellor Donde Plowman wrote an email to NCAA President Baker asking for clearer guidance for all groups involved in NIL as well as stating their compliance with the interim NIL policy and rules put in place, calling the allegations “factually untrue and procedurally flawed.”

“The University of Tennessee has cooperated with the NCAA in the past when some of our coaches and their staff were in the wrong, and we will continue to do that,” Plowman wrote. “We have been held up as a model for how institutions should handle infractions. We have complied with NIL guidance as it came out. We will be resolute in protecting the rights of our student athletes and in upholding the integrity of our institution.”

The latest investigation into UT athletics

UT quarterback Nico Iamaleava was a five-star junior recruit in high school when he signed an $8 million contract with the Knoxville-based collective in March 2022. Another potential piece in this situation is a donor-collective flying Iamaleava to campus on a private jet during the recruiting process, according to the New York Times.

No specific institution is mentioned in the contract that Iamaleava signed. However, the money offered to him by the group located in Knoxville that serves as UT’s NIL collective raises some questions about the inducement of the athlete to the university while he was still in high school.

Collectives are allowed to sign NIL deals with college athletes already attending the university. However, they are “subject to the same scrutiny as the institution and must adhere to NCAA rules and policy.” This means collectives are prohibited from joining recruiting activities and inducing potential attendees with NIL deals.

Spyre Sports Group also spearheaded the launch of The Collective Association, a group who hopes to use revenue-sharing to support NIL deals and avoid forcing college athletes to be labeled employees.

The potential for harsher penalties

This investigation comes after the NCAA ruled last July that UT had committed 18 Level I violations and over 200 individual infractions under former football coach Jeremy Pruitt from 2018-2021. These violations include giving a prospect’s mother $6,000 in cash as a down payment for a car as well as cash for monthly payments, and a “paid unofficial visit scheme” that the program used for two years and resulted in hundreds of impermissible extra benefits violations like hotel rooms, entertainment, meals, and recruiting contacts.

While inducement has been hard to prove for the NCAA in the NIL era, the Spyre Sports Group’s deal with Iamaleava seems to have found itself at the center of this latest round of probes. Florida State University became the first school to be punished by the NCAA for NIL inducement, which resulted in Level II infractions that included a two-year probation, decreased scholarships, loss of official visits, and recruiting communication limitations. The University of Florida is now being probed for its failed $13.8M NIL deal with Jaden Rashada.

The NCAA has started to prioritize enforcing its rules in the NIL space, and several prominent universities are at the forefront of its efforts. Schools across the country will be monitoring the situation as college sports have entered a topsy-turvy period of investigations, lawsuits, and chaos.

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