October 31, 2022 

The Morning Post-Up, Vol. 8 — The NIL class action lawsuit about to shake up the NCAA

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Happy Monday! Welcome to The Morning Post-Up, a twice-weekly newsletter from The Next. On Friday, Oct. 21, attorneys petitioned for the antitrust lawsuit House v. NCAA to receive class certification. The case, which is likely to have a profound effect on NIL implementation, was originally brought to Judge Claudia Wilken in June of 2021 through the U.S. District Court in Oakland, Calif, around the same time the U.S. Supreme Court unanimously decided any rules limiting education-based payments were a violation of antitrust law. However, that case, Alston v. NCAA, importantly included an opinion from Justice Brett Kavanaugh that has become the center of the new suit.

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“Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate,” wrote Justice Kavanaugh. “Under ordinary principles of antitrust law, it is not evident why college sports should be any different. The NCAA is not above the law.”

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Experts pointed to Kavanaugh’s opinion as an indication that the door could soon be blown open on non-education related payments. In combination with confirming that the NCAA’s compensation rules are indeed subject to section one of the Sherman Act, which courts use to determine whether antitrust violations have occurred, Kavanaugh’s opinion has served as a call to further challenge restrictions on non-education related payments — one that was answered by Arizona State swimmer Grant House almost immediately.

House is the lead plaintiff in the new case, which also includes Oregan’s Sedona Prince and former Illinois football player Tymir Oliver. Now that the case has been petitioned to become class action, the case may represent at least 6,280 athletes, including a specific damage class of women’s basketball players, which the case projects to have ~856 members. The classes represent full-scholarship athletes in Power Five conferences going back to June, 2016. It seeks damages related to lost name, image and likeness (NIL) payments (related to social media and group license earnings), and asserts that athletes should have received these payments long before July 2021, when the NCAA made NIL more accessible.

In addition, the suit specifically aims to tackle television revenue sharing and the NCAA’s limitation on usage of college athletes in video games. The case both points to how the athletes’ NILs “help to generate” billions in television earnings, but were denied earnings when the NCAA prevented EA sports from licensing those same NILs.

All of this movement at the legal level, experts say is headed towards a set of generalized rules regarding NIL payments, whether that be adoption of guidelines set by the NCAA or federal legislation. In 2021, the College Athlete Bill of Rights (CABOR) and the Collegiat Athlete and Compensatory Rights Act (CACRA) were brought to Congress, along with a slew of other bills attempting to tackle the issue of college athlete compensation. Both CABOR and CACRA have been re-introduced to Congress.

Behind all of this, the NCAA has attempted to lobby support for a bill that would specifically give it an antitrust exemption. Sportico reported it has so far been unsuccessful in that effort, with both Democrats and Republicans unlikely to take such a motion seriously.

In the meantime, 29 states have passed laws related to NIL, most of which take after the California Fair Pay to Play Act. Five states have pending legislation related to NIL. Sen. Maria Cantwell (D-Wash.), who chairs the U.S. Senate Commerce Committee, told Sports Illustrated at the time of the original bills having too many state-specific bills could have adverse effects.

 “College athletes deserve to earn income from their images,” Cantwell said in a statement to Sports Illustrated. “Having a hodgepodge of different state laws could lead to recruiting inequities. Hopefully Congress can come together on a federal framework.”

On Oct. 26, just days after the House v. NCAA class petition, NCAA Division I Board of Directors unanimously voted to clarify NIL guidance. Specifically, it took aim at all non-payment support schools can provide to athletes. It will prohibit schools from providing “services (other than education)” like graphic design and contract review, or “access to equipment” to “support NIL activity” unless they provide that benefit to all other students. The Board also prevented student athletes from promoting individual NIL deals while participating in “athletically related activities,” which could become complicated as athletes continue to sign shoe and apparel deals with brands outside of the brands that sponsor their school.

Most importantly, however, the NCAA’s statement accompanying the new rules clarified that that, under the new policy, schools cannot “engage in negotiations on behalf of an NIL entity or a student-athlete to secure specific NIL opportunities.”

Plenty of NCAA women’s basketball programs have already begun to do this, hiring specific NIL coordinators and providing students access to law school clinics to ensure they aren’t being taken advantage of. South Carolina has negotiated an NIL deal for a collective representing its entire team that will ensure each of its players make at least $25,000.

“This is a great thing for our program, and I appreciate the work that went into creating this new pathway for our players to have some assurances that they will have NIL deals coming this season,” said head coach Dawn Staley in a press release after the deal was announced.

The State of South Carolina recently suspended its NIL compensation act, which had previously prevented this very movement. Act 35 of the 2021 session specifically prohibited colleges or conferences from working to “directly or indirectly create or facilitate compensation opportunities for the use of an intercollegiate athlete’s name, image, or likeness.” South Carolina’s General Assembly suspended the law and Gov. Henry McMaster did not veto is. Now that the only rule applicable in the state is the NCAA’s interim policy, which re-applies the ban the state had tried to eliminate.

Whether the State of South Carolina will take direct action, and what will come of the Gamecock’s team deal if they don’t, has yet to be seen. Movement in House v. NCAA, however, may encourage the State to take action as an era of NIL reform draws ever closer.

CBK Mersin players huddle up during a match against Perfumerías Avenida
CBK Mersin (Çukurova) will play Sopron for this week’s EuroLeague Game of the Week. (Photo courtesy of FIBA)

On the block

Next up tournaments to keep your eye on

  • Polynesian Cup, PunaOra Stadium, Kaitaia, New Zealand, Nov. 1–5. Available to watch at the FIBA YouTube channel.
  • WNBL Season Opener, Australia, Nov. 2. The WNBL will kick off its season when the 2021–22 champion Melbourne Boomers visit the Perth Lynx. Available to watch at the FIBA YouTube channel or on ESPN in Australia.

Games of the Week

  • Polynesian Cup: Cook Islands vs American Samoa. Tuesday, Nov. 1, Midnight ET. Watch at the FIBA YouTube channel.
  • EuroLeague: Çukurova vs Sopron. Wednesday, Nov. 2, Noon ET. Watch at the EuroLeague Women YouTube channel.
  • EuroCup: BLMA vs LDLC Asvel Feminin. Thursday, Nov. 3, 3 p.m. ET. Watch at the FIBA YouTube channel.
  • WNBL: Lynx vs Boomers. Wednesday, Nov. 2, 6:30 a.m. ET. Watch at the FIBA YouTube channel.

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Dish and swish

Recent results to know

  • Melanesian Cup Final — Hosts Fiji handily defeated defending champions Papua New Guinea, 71–38 to win the gold medal. Fiji were undefeated in the tournament and have qualified for the 2023 Pacific Games. Papua New Guinea have also qualified for the Games. Marca Muri (Papua New Guinea), Adeline Souque (New Caledonia), Letava Whippy (Fiji), Betty Angular (Papua New Guinea), and Matila Vocea (Fiji) were named to the All-Star Five team. Enola An Ah Tchung (New Caledonia) was the tournament’s leading scorer by more than 3 points, with 17.3 points per game.
  • EuroLeague Updates: After the first day of games, Polkowice lead Group A while Sopron lead Group B. Don’t miss The Next‘s Antonio Losada’s boldest takes after week one of EuroLeague play. Will Fenerbahçe ever win the EuroLeague? What about Avenida and Praha? Losada gives his picks and plenty more.
  • For updates from EuroCup, check out the last edition of the Morning Post-Up.

Next, read…

  • We’re back with more college basketball previews!
  • For ABC News (Australia), Amanda Shalala spoke with Sydney Flames and former Syracuse guard Tiana Mangakahia about her road back to basketball after a 2019 breast cancer diagnosis.
  • Our Michelle Smith reflects on the impact of Oregon’s Sedona Prince, who last week suffered a season-ending elbow-ligament injury, abruptly ending her college career.
  • Our Hayden Cilley checks in with the Mercury’s Brianna Turner, who earlier this month received the 2022 Community Assist award, to find out more about her off-court efforts.

Written by Isabel Rodrigues

Isabel Rodrigues (she/her) is a contributing editor for The Next from upstate New York. She occasionally covers 3x3 and labor in women's basketball.

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