[co-author: Stephanie Kozol]*
On Wednesday, attorneys general (AG) for the states of Florida, New York, and the District of Columbia announced that they are joining Tennessee and Virginia in a multistate coalition challenging the National Collegiate Athletic Association’s (NCAA) “Name, Image, and Likeness (NIL)-recruiting ban.” Troutman Pepper previously reported on the lawsuit after the District Court entered a preliminary injunction order in February.
In their lawsuit, the multistate coalition challenges the NIL recruiting ban on grounds that it allegedly constitutes an illegal agreement to restrain and suppress competition within the relevant labor market, in violation of Section 1 of the Sherman Antitrust Act. Judge Clifton Corker of the Eastern District of Tennessee found that the NCAA’s rule would “likely harm competition” because it “suppress[es] price competition by limiting negotiating leverage, and, as a result, knowledge of value.”
Why It Matters
The AGs’ multistate action against the NCAA is consistent with a recent trend of state-level antitrust enforcement. State AGs are increasingly taking action that potentially impacts the landscape of college sports.
The February decision provided much-needed clarity to member schools and collectives that were unsure how to comply with the NIL-recruiting ban. The decision primarily impacts third-party entities, such as booster clubs — which may continue to engage in NIL-recruiting discussions in light of the preliminary injunction. Schools, however, are still prohibited from discussing NIL compensation with student-athletes.
*Senior Government Relations Manager
