The National Collegiate Athletic Association’s (NCAA) name, image, and likeness (NIL) recruiting restrictions, referred to as the “NIL recruiting ban,” are about to become a thing of the past.

On March 17, the NCAA and the state attorneys general (AG) for Tennessee, Florida, New York, the Commonwealth of Virginia, and the District of Columbia asked U.S. District Judge Clifton L. Corker to approve a consent judgment and permanent injunction that would permanently end the NIL recruiting ban.

The consent judgment and permanent injunction now awaits final approval, which is expected, from Judge Corker.

HOW WE GOT HERE

The NIL recruiting ban prohibited student-athletes, schools, and third parties (often NIL collectives) from discussing or negotiating NIL agreements during the recruitment process and prevented schools from giving recruits support and assistance with potential NIL opportunities.

The AGs of Tennessee and Virginia originally filed the antitrust lawsuit (and were subsequently joined by the AGs of New York, Florida, and the District of Columbia) in the Federal District Court for the Eastern District of Tennessee. The lawsuit challenged the NIL recruiting ban as an unfair limitation on schools’ and third parties’ ability to discuss and negotiate NIL opportunities with recruits. This rule, the state AGs said, limits a student-athlete’s ability to compare NIL opportunities available to them and, ultimately, prevents student-athletes from maximizing their NIL earning potential.

As previously discussed in this Troutman Pepper Locke article, on February 23, 2024, at the AG’s request, Judge Corker entered a preliminary injunction barring the NCAA from enforcing the NIL recruiting ban.

THE CONSENT JUDGMENT AND PERMANENT INJUNCTION

The terms of the proposed consent judgment and permanent injunction would require the NCAA to:

• Stop enforcing the NIL recruiting ban;
• Not punish any student-athlete or any member institution for an NIL recruiting ban violation that occurred during the pendency of the preliminary injunction;
• Publish information about this change on its website;
• Create a dedicated webpage on which it will post all new proposed Division I rules or amendments that concern NIL at least 30 days prior to any NCAA vote on the proposals;
• Meet with the states before any proposed NIL changes can go into effect; and
• Abstain from future actions that would undermine or circumvent the consent judgment and permanent injunction.

Notably, the consent judgment expressly states that it does not address the NCAA’s ability to continue to prohibit or punish impermissible recruiting contacts (also known as “tampering) with student-athletes who have not yet entered the transfer portal. It also expressly states that it does not apply to the portions of the proposed House settlement that permit NCAA and member conferences to require a valid business purpose and fair market value for NIL payments to student-athletes.

Should Judge Corker approve the proposed consent judgment and permanent injunction, NCAA Division I member institutions and collectives will be free to use (or continue to use if they are already doing so) NIL as an inducement to recruit prospective student-athletes and student-athletes in the transfer portal without fear of NCAA enforcement. That said, tampering is still prohibited under NCAA rules, and nothing in the consent judgment protects a member institution from NCAA sanctions if it offers NIL money to a current student-athlete at another institution before that student-athlete enters the transfer portal.