Payback Time: Ex-Wolverines Tackle NCAA Over NIL Earnings

Morgan Blunt

2 days ago6 min read

Since the Supreme Court’s ruling in National Collegiate Athletic Association (NCAA) v. Alston on July 1, 2021, college athletes have been allowed to receive financial compensation off their Name, Image, and Likeness (NIL) through endorsements, sponsorship deals, and other promotional endeavors.[2] While Alston itself specifically addressed NCAA restrictions on education-related benefits, the court’s antitrust analysis put additional pressure on the NCAA to reconsider broader limitations on athlete compensation.[3] Antitrust law, designed to promote fair competition and prevent unlawful restraints on trade, plays a crucial role in regulating the NCAA’s policies on athlete compensation.[4] In the context of Name, Image, and Likeness, these laws challenge the NCAA’s historical restrictions by ensuring that athletes can profit from their personal brands without unjust competitive limitations.[5] The Alston decision reinforced the application of antitrust law to NCAA regulations, signaling that further restrictions on athlete compensation could face heightened legal scrutiny under the Sherman Act, a federal law that prohibits agreements that unreasonably restrain trade and aims to promote fair competition in the marketplace.[6] In essence, the Alston ruling set a legal precedent that weakened the NCAA’s ability to restrict athlete compensation. As a result, it paved the way for a major shift in the college sports landscape because student-athletes can now legally benefit from endorsements, sponsorships, and other revenue streams.[7]

Breaking Down the Lawsuit

In May 2024, the NCAA reached a $2.8 billion settlement with former college athletes dating back to 2016 who filed an antitrust class action lawsuit claiming that they missed out on television and marketing rights and are therefore entitled to adequate compensation.[8] However, the settlement failed to address whether college athletes are able to get a portion of the billions earned from television revenue given to universities.[9] This issue is currently being assessed in a lawsuit brought by former University of Michigan football players who claim that they should be compensated for their highlight reels, old games, replays, documentaries, and any other promotional content used by the NCAA and Big Ten Network.[10]

The players filed a federal antitrust class action lawsuit and are claiming they were "unlawfully and wrongfully denied" the chance to profit from their name, image, and likeness .[11] The lawsuit represents all former Michigan football players who competed for the university prior to 2016, including well-known players such as Denard Robinson, Braylon Edwards, Mike Martin, and Shawn Crable.[12] Robinson was a star quarterback for the Michigan Wolverines from 2009 to 2012.[13] He set numerous records in the Big Ten Conference and NCAA and was on the cover of the EA Sports NCAA Football 14 video game.[14] Edwards was an All-American wide receiver who played from 2001 to 2004 at Michigan.[15] Martin was a defensive lineman from 2008 to 2011, and Crable played linebacker at Michigan from 2003 to 2007. All four players ultimately made it to the NFL and had NIL opportunities been available during their college careers, they likely would have secured highly lucrative deals.[16]

In the complaint, the plaintiffs reference recent legal losses faced by the NCAA.[17] They point to the U.S. Supreme Court ruling in NCAA v. Alston, which determined that the NCAA’s restrictions on colleges compensating athletes for educational expenses violated antitrust law.[18] Even though Alston did not address NIL rights or athlete compensation for playing, it underscored that the NCAA is subject to ordinary antitrust scrutiny rather than any special leniency.[19] In other words, the Alston ruling made it clear that the NCAA is not exempt from standard antitrust laws, emphasizing that its policies must undergo the same level of scrutiny as any other organization. Special leniency refers to the concept of granting a more relaxed or different level of antitrust analysis to certain entities, but the Supreme Court's decision reinforced that the NCAA cannot claim such an exemption, ensuring that its restrictions on athlete compensation are subject to rigorous legal challenges.[20]Additionally, the complaint emphasizes O’Bannon v. NCAAA[21] which ruled that restricting payments to athletes violates antitrust laws by acting as an unreasonable restraint of trade.[22] The O’Bannon case was pivotal in establishing that the NCAA’s restrictions on athlete compensation go beyond mere regulation and instead constitute an unlawful restraint on the market.[23] By prohibiting athletes from profiting from their name, image, and likeness, the NCAA was found to be limiting competition in violation of antitrust laws, reinforcing the notion that athletes should have the right to benefit from their own personal brands.[24]

The former Michigan players note in their complaint that these restrictions represented an agreement among competing entities, such as universities and conferences to effectively “reduce the cost of student athletes’ publicity rights to zero”.[25] The lawsuit alleges that the defendants violated Section 1 of the Sherman Act.[26] Section 1 of the Sherman Act prohibits any contract, combination, or conspiracy that unreasonably restrains interstate or foreign trade.[27] In this case, the plaintiffs argue that the NCAA and its affiliates engaged in a collective agreement to limit athletes' ability to profit from their NIL, effectively stifling competition in the market for college athletes' services and violating the protections set forth by the Sherman Act.[28] The NCAA and Big Ten are portrayed as colluding to “artificially depress to near zero” the market value of athletes’ NIL by restricting their opportunities to benefit from it.[29] By restricting athletes’ ability to engage in contracts or receive compensation independently, the NCAA has been accused of using its monopoly to control the market and unfairly benefit from athletes' publicity rights, undermining the principles of a free and competitive marketplace.[30]This case also includes allegations of a group boycott and refusal to engage with athletes. [31] The NCAA is described as leveraging its monopoly over college athletics and athlete labor to stifle competition for athletes’ services and “assign their publicity rights to the NCAA. [32]The lawsuit suggests that the NCAA, through its powerful position, has effectively prevented fair competition by conspiring with conferences and universities to suppress athlete compensation, limiting athletes’ ability to negotiate for their NIL rights.[33]

Additionally, the plaintiffs assert a broad range of financial harms, including loss of market value for NIL rights, reduced income from endorsements, lost earnings from media appearances, unpaid use of likeness on merchandise, missed revenue from archived footage, decreased future potential earnings, group licensing revenue loss, missed opportunities in social media influencer marketing, long-term endorsement opportunities, and unshared media rights revenue. The plaintiffs requested an injunction to prevent the NCAA and Big Ten from continuing the alleged unlawful practices.[34]

Legal Pressure Mounts on the NCAA

The case has garnered attention from well-known figures such as attorney Tom Mars, who is known for representing high-profile clients like former Michigan football Head Coach Jim Harbaugh. Mars discussed the upcoming challenges for the NCAA and said, “the NCAA doesn’t have enough fingers to plug all the holes in the current class-action dike…Worse yet, the filing of this new class action is an invitation for other former college athletes to file similar lawsuits against the NCAA and others who’ve misappropriated players’ NIL rights for decades.”[35] This new lawsuit comes at a challenging time for the NCAA, as the organization struggles to move towards a proposed settlement that would allow colleges to directly compensate athletes for NIL, media rights, and ticket sales, while also maintaining some aspects of its amateurism model. As of January 29, 2025, more than 340 players have joined the lawsuit.[36] With the growing number of former athletes joining the lawsuit, the NCAA faces mounting pressure to address its long-standing restrictions on athlete compensation. As legal challenges continue to emerge, the outcome of this case could further reshape the landscape of college sports and redefine the financial rights of athletes in the NIL era.

MORGAN BLUNT (staff writer) is a 2L at Villanova University Charles Widger School of Law and is originally from Charleston, South Carolina. Prior to attending college, she was a competitive dancer for eleven years. After graduating, she hopes to utilize her legal background in assisting athletes in financial decisions, managing media deals, and contract negotiations.

References:

[1] Photo by Daily Collegian on Flickr.

[2] Nat’l Coll. Athletic Ass’n v. Alston, 141 S. Ct. 2158 (2021).

[3] Id.

[4] Federal Trade Commission, Guide to Antitrust Laws. https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/antitrust-laws

[5] Id.

[6] Nat’l Coll. Athletic Ass’n v. Alston, 141 S. Ct. 2158 (2021).

[7] Id.

[8] Pete Thamel, NCAA settlement a historic day for paying college athletes. What comes next? (May 23, 2024). https://www.espn.com/college-football/story/_/id/40206469/ncaa-settlement-pay-college-players-analysis

[9] Landmark $2.78 billion settlement with NCAA over student-athletes payments hits potential snag (Sept. 6, 2024). https://www.cbsnews.com/news/ncaa-settlement-student-athletes-payments-potential-snag/

[10] Katie Arcieri, Michigan Football Alums Sue NCAA Over Name, Image, Likeness (1) (Sept. 10, 2024). https://news.bloomberglaw.com/antitrust/michigan-football-alums-hit-ncaa-with-name-image-likeness-suit

[11] Id.