The attorneys general of Tennessee and Virginia filed a lawsuit Wednesday against the NCAA, saying the body that regulates college athletics has no right to block the increasingly common practice of wealthy sponsors paying to attract top recruits.
He suit It came a day after the revelation that the NCAA was investigating the University of Tennessee football program for recruiting violations involving a donor group that arranges payments to athletes. It could set off a wide-ranging legal battle over the very nature of college athletics, which is in the midst of a rapid transition from a tightly policed amateur system to a kind of unrestricted professional market.
The driving force behind that change has been donor collectives, which are groups of alumni and other boosters who donate money that is used to compensate top athletes, sometimes in amounts close to professional levels. They do this by exploiting the NCAA’s new “name, image and likeness” rules, or NIL, which were intended to allow athletes to receive money for their endorsements, but in practice allow almost anyone to pay them, and for almost any reason.
Indeed, the collectives pay salaries disguised as sponsorships and now play a central role in the process of courting football, basketball and other sports players.
The lawsuit seeks to eliminate one of the few NCAA rules that limit these groups and one of the last vestiges of the amateur model.
That rule is that collectives cannot recruit high school students or transfer students to play at their chosen school by offering them money.
Attorneys general, addressing the issue even before the NCAA released specific allegations against the University of Tennessee, said the restriction amounted to an unlawful restraint of trade. They argue that collectives should be free to outbid each other in recruiting, as schools with the best coaches do.
“This ban on NIL recruiting limits competition,” the attorneys general said in the lawsuit, stating that the cap “artificially diminishes the NIL compensation that college athletes could earn in a free market.”
Attorneys general asked a judge to issue an order blocking the rule by Feb. 6, the day before the next window opens in which high school seniors can sign scholarship agreements to play college football. .
The NCAA reiterated Wednesday that its rules are made by its member schools, which have called for stricter enforcement and for violators to be held accountable. The NCAA said in a statement that the lawsuit would exacerbate what coaches and administrators often call “a ‘Wild West’ atmosphere” and further expose athletes to potential exploitation.
The lawsuit was filed by Tennessee Attorney General Jonathan Skrmetti, a Republican appointee who has often taken conservative legal positions in his 17 months in office. Tuesday’s reports about the NCAA’s investigation into the University of Tennessee sparked a blistering response from the school and sparked outrage among its fan base.
The group of donors at the center of the Tennessee case paid to fly a high school quarterback to campus on a private jet, according to a person familiar with the case. The Tennessee team issued a statement saying it had followed NCAA rules and that his contract with the quarterback, which could allow him to earn $8 million, did not require him to attend Tennessee.
Virginia’s participation in the lawsuit raised the possibility that other states with high-profile state school sports programs could join the legal action. Virginia Attorney General Jason S. Miyares is an elected Republican.
The collectives first emerged in 2021, when the NCAA, after losing a series of court cases that eroded its regulatory authority, declined to challenge a series of state laws that allowed players to profit from their name, image and likeness.
For much of the time since then, there has been little evidence that the NCAA was attempting to police these groups. The New York Times has counted more than 140 groups now operating in schools across the country, with budgets that can reach $10 million or more.
In just a few years, college coaches and players say, the money offered by groups has become the dominant factor in recruiting and retaining athletes. Last year, for example, the University of Iowa’s starting quarterback told the Times that he had transferred from the University of Michigan after the Iowa team made him a written offer outlining what they would pay him.
College athletics officials have complained that the NCAA had allowed the name, image and likeness system to become a pay-for-play system in disguise.
Many state laws, including one enacted nearly three years ago in Tennessee, echo the NCAA’s ban on pay-to-play. Tennessee law states that compensation cannot be provided in exchange for athletic performance in order to “maintain a clear separation between amateur intercollegiate athletics and professional sports.”
That contrasts with the argument made by Tennessee’s attorney general in Wednesday’s lawsuit, which appeared to accept that the groups were paying players to play for their school. Skrmetti, who last year threatened to sue the NCAA if it banned the Tennessee football team from participating in a bowl game during a separate investigation, said athletes had the right to maximize those payments, surveying schools to find where they were. I would pay them more.
“Very few college athletes go ‘pro’ in their sport and therefore their NIL value is at its highest during their short college career,” the lawsuit says. “Their ability to negotiate the best NIL deal is critical.”
The result has been a windfall for many players, but also a chaotic market that lacked the rules, unions and minimum salaries that govern professional sports labor markets. In this semi-clandestine free agent market, college athletes had little idea of their true value.
In recent weeks, the NCAA has also given some signs that it is looking to rein in the collectives.
NCAA President Charlie Baker has proposed allowing schools to enter into NIL agreements directly with athletes, a step that could lessen the impact of collectives and could be codified by the association later this year. A major NCAA committee this month proposed other rules that would tighten regulation, including requiring athletes to report any deals over $600 and forcing schools to further disengage from boosters found to have engaged in wrongdoing. .
The NCAA’s law enforcement wing fined Florida State University after a football coach took a prospective transfer student to meet with a group. And he’s investigating the University of Florida, where a group offered a high school quarterback $13.85 million but then didn’t pay.
The lawsuit filed Wednesday seeks to establish a legal ruling that would allow such transactions, ushering in an era in which college athletes are treated like professionals before they even go to college.