Name, Image, Likeness; Rule Changes; and Unionization: Higher Ed Athletics in 2024

Higher education athletics are at an inflection point. For the first time, student-athletes are now allowed to receive some forms of compensation without sacrificing their amateur status, and broader conversations have started about whether athletes should receive pay.

Below are some of the most unsettled topics in higher education athletics.

Name, Image, and Likeness

Name, image, and likeness (NIL) is a shorthand term for the concept of student-athletes’ identities being used for commercial or promotional purposes. For example, when a basketball jersey is sold with a student’s last name and number, it uses the student’s NIL. Historically, the NCAA and schools could make money from students’ identities, but the athletes couldn’t. Over the past few years, courts and the NCAA have determined students can receive compensation for their NIL.

Timeline of Changes

2015:

O’Bannon v. NCAA
Former UCLA athletes including basketball star Ed O’Bannon alleged the NCAA’s amateurism rules preventing student-athletes from using their NIL for compensation were an illegal restraint on trade under the Sherman Anti-trust Act. The U.S. District Court found the NCAA’s amateurism rules were an unlawful restraint of trade and let NCAA member schools give student-athlete scholarships up to the full cost of attendance. The U.S. Supreme Court declined to hear the appeal, thus upholding the decision.

2019:

Some states enact legislation allowing student-athletes to be compensated for their NIL.

2021:

NCAA v. Alston
The same trial court from O’Bannon v. NCAA heard this case, which combined several separate but related claims challenging the NCAA’s compensation restrictions. The U.S. Supreme Court heard an appeal and found some NCAA rules violated the Sherman Anti-trust Act.

Following the Alston decision, the NCAA announced college athletes would have the opportunity to benefit from their name, image, and likeness and issued an Interim NIL Policy.

This policy includes the following limits:

• Third parties can now pay athletes for their NIL and endorsements without the athletes violating amateurism rules, however schools still cannot pay their athletes — for NIL or otherwise.
• Schools in states with NIL laws should follow their state laws.
• Athletes cannot receive payment for work they didn’t do.
• NIL compensation cannot be made contingent upon enrollment at a specific school. NIL deals cannot be used for recruiting purposes.
• Athletes cannot be directly compensated for athletic participation or achievement, even by third parties.

2024:

NCAA Division I Disclosure and Transparency Rules
The NCAA’s Division I Council approved NIL disclosure and transparency rules in January 2024. Unless the NCAA takes further action, these rules take effect for Division I schools on Aug. 1, 2024:

• Voluntary registration for third-party NIL service providers. The NCAA will establish a voluntary registration process for NIL service providers to serve as a centralized source for providers interested in working with student-athletes.
• Disclosure requirements. Students (prospective and current) must disclose to their school information related to NIL agreements exceeding $600 in value, no later than 30 days after entering or signing the NIL agreement. Schools will report this deidentified data to the NCAA at least twice per year so the NCAA can develop an aggregated database allowing student-athletes to better understand NIL agreement trends.
• Standardized contracts. The NCAA will work with schools to provide student-athletes with robust education on contractual obligations.
• Comprehensive NIL education. The NCAA will develop a comprehensive plan to provide ongoing education and resources to support student-athletes.

NCAA Division I School Assistance Rules
The NCAA’s Division I Council approved additional rules in April 2024 allowing schools to assist with NIL activities.

The school assistance rules have these effects:

• Define an NIL entity as an individual, group of individuals, or any other entity organized to support the athletics interest of an NCAA school by compensating student-athletes for NIL activities.
• Allow schools to identify potential NIL opportunities for student-athletes.
• Allow schools to facilitate deals between student-athletes and third parties.
• Allow increased school support of student-athlete NIL activities.
• Require entities associated with a school to be subject to the same standards as the school.
• Remove national restrictions on the level of support provided by schools and their third-party service providers to student-athletes pursuing NIL opportunities.

NCAA Division I Transfer Rules

The NCAA’s Division I Council also adopted transfer rules in April 2024. The transfer rules require student-athletes who transferred institutions more than once to sit out a year of competition.

However, in May 2024, the U.S. Department of Justice and the NCAA submitted a proposed consent decree in a federal antitrust lawsuit challenging the transfer rules. If approved, the proposed consent decree would prevent the NCAA from enforcing the April 2024 transfer rules or implementing similar rules. It also would add a year of eligibility for qualifying college student-athletes who previously were deemed ineligible due to the transfer rule.  

State of Tennessee and Commonwealth of Virginia v. NCAA
Tennessee and Virginia filed a lawsuit in January 2024 alleging that the NCAA’s NIL policies violate U.S. antitrust law. A federal judge granted a preliminary injunction for the states barring the NCAA from enforcing an NIL rule prohibiting compensation for recruits.

Legislation and Lawsuits

With ongoing legislation and lawsuits, the potential impacts of NIL compensation continue to expand. In May 2024, the NCAA and five major athletic conferences reached a proposed settlement for the House v. NCAA lawsuit that would include payments for former and current athletes. Terms of the proposed settlement include a $2.75 billion payment to former athletes for NIL rights. It also provides for revenue-sharing where schools distribute revenues directly to student-athletes.

The agreement isn’t final until it is approved by the judge. After the proposed settlement was announced, at least one institution filed a motion to intervene in the lawsuit, arguing the proposed settlement would unfairly divert funds from academics to athletics.

In Rashada v. Hathcock, a current student-athlete at the University of Georgia (who formerly played at the University of Florida) alleges the University of Florida’s head football coach fraudulently induced him to attend by offering a $13 million NIL deal that was rescinded after signing. The athlete also alleged a different institution offered him a $9.5 million NIL deal that he turned down to attend the University of Florida. This lawsuit was filed in May 2024.

Several federal bills have been introduced with little traction — it’s possible another may get proposed. In the meantime, states continue creating and modifying NIL laws. To learn more about NIL legislation, see the Saul Ewing NIL Legislation Tracker.

Title IX

Non-NIL laws also are complicated by NIL efforts. Title IX of the Education Amendments Act of 1972 (Title IX) forbids sex discrimination by educational institutions that receive federal financial assistance, including in institutional athletics programs. At one institution, a former women’s team is challenging its removal under Title IX. One of its allegations is that the institution spent more publicity money on the men’s teams, thereby limiting opportunities for the women’s teams to receive NIL sponsorships and dollars and violating Title IX. As NIL expands, this allegation may become more common in Title IX athletics lawsuits.

There also are concerns that the House v. NCAA proposed settlement described above might have Title IX implications if it results in revenue-sharing with student-athletes that is inequitably distributed between male and female athletes.

Other Athletics Issues

Several other recent athletics developments also warrant closer observation.

Employment and Unionization Efforts

The Dartmouth College men’s basketball team successfully voted to unionize in March 2024. This is the first college sports team to form a union, although an appeal has already been filed with the National Labor Relations Board (NLRB).

In another NLRB claim, several athletic teams at the University of Southern California allege they’re misclassified as student-athletes rather than employees.

Finally, in Johnson v. NCAA, former student-athletes from multiple institutions argued they should have been classified as employees and entitled to minimum wage.

All three situations are ongoing.

Transgender Athletes and Title IX

In April 2023 the Department of Education (ED) released a notice of proposed rulemaking on athletic eligibility under Title IX providing guidance for the inclusion of transgender athletes. The proposed rule would “provide schools with a framework for developing eligibility criteria that protects students from being denied equal athletic opportunity, while giving schools the flexibility to develop their own participation policies.”

In April 2024, ED released a final Title IX rule that updated the definition of sex discrimination to include discrimination based on sex stereotypes, sex characteristics, sexual orientation, and gender identity. It wasn’t addressed directly at athletics. Multiple states filed lawsuits accusing ED of overstepping its authority, largely in relation to the rule’s gender and sexuality definitions. At least one federal judge agreed with the states and blocked the new rule in certain jurisdictions. These lawsuits are ongoing.

In a March 2024 federal lawsuit, Gaines v. NCAA, college swimmers alleged the NCAA violated their Title IX rights by allowing a transgender woman to compete at the national championships.

Risk Management Steps

As you review these developments and the potential impacts on your campus, consider taking these risk management actions:

• Consult legal counsel. Higher education athletics and related rules will continue to change. Before taking any major action in your athletic department, consult with legal counsel to determine the effects of federal and state law and NCAA regulations.
• Train athletes, athletics staff, and coaches. If your legal counsel approves, offer training for athletes and staff identifying what it means to be an athlete at your institution. Include guidance on athletics risk management, reporting systems that are in place for prohibited conduct, and NIL allowances and prohibitions.
• Keep sponsorship separate from schools. For now, the court decisions and NCAA rules reinforce that schools aren’t allowed to pay athletes for their NIL.

More From UE

Athletics Benefits and Name, Image, Likeness: The Year in Review

Additional Resources

Husch Blackwell: Athletics on an Axis

NCAA: Name, Image and Likeness Interim Policy Resources