You can’t begin a talk about the current state of college athletics without fully understanding how we got here. Many people will point to one or two recent Supreme Court decisions as the impetus for Name, Image, and Likeness (“NIL”). In reality, the drive started much earlier than that and – one could argue – has been building since the start of the NCAA.

In October 1905, after 19 college football players died from injuries sustained while playing the sport, football fan and President Theodore Roosevelt brought together athletics leaders from Harvard, Yale, and Princeton, the top football schools in the country, to take action to “clean up the game” and stop the mounting deaths. That meeting led to agreement among the schools for the formation of the Intercollegiate Athletic Association of the United States (“IAA”), precursor to the NCAA. Initially, the impetus of the IAA, and thereafter the NCAA, was to protect college athletes and assure that the games they were playing had rules, were fair, and competition was equitable. On December 29, 1910, the IAA was officially renamed the National Collegiate Athletic Association (“NCAA”), but the goal remained the original purpose of safety and protection of the athletes.

When the NCAA was implemented, scholarships weren’t capped, thus larger institutions were allowed to provide as many as they could afford, and as it was pre-Title IX, there wasn’t a need for equality. The NCAA remained concerned with structuring sport and championships and assuring safety for players. However, as revenues began to rise from tickets, radio, and TV during the early 20th century, it became common for schools to “hire” ringers, enticing athletes to enroll at their universities simply to participate on the football team, with cash payments – such that it became a joke that it was more profitable to play in college than to leave and play for the pros. Even though there was technically a restriction on athletes receiving compensation directly or indirectly, money continued to change hands.

Finally, in 1973, after the passage of Title IX of the Education Amendments of 1972, limits on athletic scholarships were implemented to free up money for women’s sports, as well as due to a belief that capping the number of scholarships would create a more level playing field. While scholarships helped and did provide parity, the NCAA and institutions still had their hands full with fans and supporters wanting to provide additional benefits to their favorite players.

Through much of the latter half of the 20th century and into the 21st, as broadcast deals and revenue from intercollegiate athletics moved into the billions of dollars, the NCAA continued to enforce regulations keeping student-athletes from receiving benefits outside of institution provided scholarship funds. As the popularity of college sports continued to grow, and therefore the revenues along with it, the NCAA found its enforcement efforts also growing. The NCAA has one ultimate punishment, the death penalty, which has been used only once, on a school that was found to be paying players in the late 1980s. It seemed as if once that punishment was levied, the enforcement issue regarding outside benefits getting to athletes was more under control as schools understood the severity of failing to monitor illicit benefits and thus spent resources increasing compliance departments and devoted staff to institutional enforcement. However, simultaneously, it seemed that the echoes from the public about why student-athletes couldn’t share in some of the windfall grew louder. As the NCAA controlled everything from whether a student-athlete could have an outside job to what type of snacks a team could provide their student-athletes, the public seemed to start to wonder if that was really what was best for student-athletes and college sports in general and pundits got louder and louder about why student-athletes couldn’t be paid.

As the 21st century began, current and former student­athletes began to push back on some of the restraints. For years, the governing bodies fought to maintain the premise that to keep the game pure and distinguish between college and the professional sports, college athletes must not be able to receive anything more than room, board, tuition, and class related expenses. However, a shift started with a couple lawsuits in the early 2000s. First, Sam Keller, a former football player for both Arizona State University and the University of Nebraska, sued EA Sports (“EA”), the Collegiate Licensing Company (“CLC”), and the NCAA for misusing his and other players’ likenesses without compensation in the EA produced, CLC licensed, NCAA video game(s). EA and CLC settled early, leaving the NCAA as defendant. Simultaneously, former basketball player Ed O’Bannon brought suit against the same parties, alleging that long after his NCAA eligibility was exhausted, both UCLA, where he played basketball, and the NCAA, EA, and CLC, were profiting off his name and likeness without sharing in those profits, despite the fact his eligibility had long since expired. The parties, facing trial with Mr. O’Bannon, settled Keller, agreeing to halt the licensing of the EA video games.

In what seems to be a natural path to the current NIL policy, after settlement with Keller, the NCAA tackled O’Bannon head on. At issue was how the NCAA and Member institutions restricted both student-athletes and former student­athletes from making money off their own NIL. Part of how such restriction was accomplished was that prior to engaging as a student-athlete, each Division I athlete was required to sign a form, affirming that they authorized their university to use the student-athletes’ name, picture, or appearance in accordance with NCAA Bylaw 12.5.1 in perpetuity. As argued in O’Bannon, the right was granted to universities and the NCAA in perpetuity and did not rely upon a student-athletes’ amateur status to apply. During arguments in O’Bannon, the NCAA argued that paying athletes would be a violation of its concept of amateurism in sports and that the restrictions implemented are necessary to maintain fairness among member institutions. District Judge Claudia Wilken disagreed with the NCAA, ruling that certain athletes should receive payments during their participation. However, the Court of Appeals of the Ninth Circuit overruled in part, agreeing with the NCAA that direct payments would blur the line between college and professional athletes, and the Supreme Court denied taking the case on further appeal. The direct result of O’Bannon was that the NCAA loosened the policy on scholarships thus allowing schools to offer full cost of attendance scholarships starting in the 2015 academic year, rather than simply the cost of tuition, fees, books, room, and board. The perhaps unintended result of O’Bannon was that more student-athletes continued to press the rules against them as being in violation of the Sherman Act. The most prevalent of these, and the case paving the way to current NIL policy, being NCAA v. Alston.

In Alston, current and former student-athletes challenged the NCAA’s restrictions on compensation. Specifically, the student­athlete plaintiffs alleged that the NCAA’s rules violate Section 1 of the Sherman Act, which prohibits “contracts, combinations, or conspiracies in restraint of trade or commerce.” Plaintiffs argued that the NCAA should not be allowed to limit the non­cash related benefits to student-athletes. District Court Judge Claudia Wilken was again faced with deciding the matter. Again, Judge Wilken agreed with the plaintiffs’ position, finding that the NCAA did illegally restrain trade in violation of the Sherman Act. The NCAA appealed, and the Ninth Circuit affirmed the lower court decision in full. The NCAA appealed again to the Supreme Court, which this time, took up the appeal.

While Alston ultimately was a rebuke by a unanimous Supreme Court of the NCAA’s policies, it wasn’t in the decision but in the concurrence that most people understood the landscape of college athletics was on the precipice of change. In his concurrence, Justice Kavanaugh took the opportunity to emphasize three points: (1) that the Supreme Court’s decision did not consider the legality of the non-education related compensation rules; (2) that the Court’s decision established that these rules would be analyzed under the rule of reason test; and (3) that the Court’s decision raised serious questions about the legality of the remaining restraints under the rule of reason test. Justice Kavanaugh made it clear that he felt the NCAA had been getting away with antitrust violations and that, in his opinion, such violations should be struck down stating, “[n]owhere 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...The NCAA is not above the law...”

As Alston was winding through the courts, state legislatures were also showing their desire for a change in college athletics. Prior to the final Alston decision, states passed legislation that directly challenged the NCAA’s restrictions on what funds a student-athlete could receive, regardless of how Alston was decided. California’s Fair Pay to Play Act (“Act”), originally known as California Senate Bill 206 was signed into law by California Governor Newsom on September 30, 2019. The Act was set to allow collegiate athletes in California to acquire endorsements and sponsorships while continuing to maintain athletic eligibility. On June 12, 2020, Florida followed suit and passed State Bill 646 which allowed intercollegiate student­athletes the ability to earn compensation for the use of their NIL. Florida’s bill, although passed second, was set to go into effect first, with a start date of July 1, 2021. With the bills looming and setting the stage for other states to follow suit, on January 8, 2021, the NCAA, ready to put forth a proposal on NIL policy, tabled that decision upon receipt of correspondence from the Department of Justice (“DOJ”) antitrust division expressing concern over the proposals. Thereafter, on

June 21, 2021, the Court announced Alston, and the NCAA had a quick decision to make. Would the NCAA challenge the legislation in California and Florida, knowing unquestionably after Alston that public sentiment, the DOJ, the executive branches of most states, and the judiciary were not in their favor, or should they go back to the drawing board?

The NCAA took the Alston decision and the passage of the two early state bills to heart and revamped its policy. On July 1, 2021, the NCAA’s Interim NIL Policy was officially implemented. Effective midnight July 1, 2021, student-athletes would no longer be rendered ineligible for receiving compensation for their NIL. The NCAA legislation for the most part defers to the states and the institutions to incorporate any restrictions on the student-athletes, save for a few significant parts such as: a student-athlete cannot take money as an inducement to attend a certain institution; cannot take money based on that student-athlete attending or continuing to attend a certain institution; a student-athlete cannot take money for athletic performance; and, generally, student-athletes must follow their state laws and/or institution policy. Overnight, the NCAA opened up the policy and student-athletes were allowed to take endorsement deals, could host their own camps and clinics, could provide video shoutouts for fans, and a myriad of other opportunities both live and via social media. Companies such as Opendorse, Inc. exist to help both student-athletes navigate NIL and find opportunities for themselves and to help schools implement structure to educate student-athletes and help them in the quest for NIL, so student-athletes do not get sideways of NCAA, conference rules, or state legislation.

With NIL having celebrated its first birthday on July 1, 2022, one thing is clear: there will be no turning back. Student-athletes are earning money for their popularity and the proverbial sky hasn’t fallen; college sports have, for the most part, stayed the same; and fan engagement has seemingly never been better. With the newness of NIL, there are, of course, ongoing conversations about the evolving world of college athletics. While lawsuits are currently pending in federal courts from east to west arguing that college athletes should be made employees of their universities, most administrators and college athletics professionals agree that making college athletes employees would shake the college landscape and diminish much of what makes college athletics special – that 99% of college athletes go pro in something other than their sports. With that understanding, to most athletes, the college education received while getting to experience also being an athlete is the benefit. These professionals believe making athletes employees would (presumably) pave the way to remove education requirements on college athletes and would effectively, make college athletics little more than a farm system for the professional leagues. Though there are of course college athletes that don’t graduate, studies have shown that college athletes graduate at a higher rate than non-college athletes, much of this due to the degree requirements placed on them by NCAA policies and their universities wanting to tout not only powerhouse athletics programs, but programs that also provide a pathway to a successful future.

While most of those who work in the college space agree that it is time that student-athletes are allowed more freedom with their own NIL, a consistent theme among those same professionals is that it is important for the landscape of college athletics that athletes should not be counted as employees of their university. In fact, most state laws include a provision specifically to this effect. So, if student-athletes are going to remain such, and are going continue simply making money through their NIL, what does the future look like? Most com­ plaints this year on NIL have been with respect to “illegal benefits” or schools taking advantage of NIL to funnel money to prospective athletes. Thus, what institutions are looking for is competitive balance. With that in mind, the current model will not be sustainable. When the laws were implemented, states were focused on the then current NCAA policies that didn’t allow student-athletes to make any money off NIL. The laws were not framed at guiding the student-athletes, but instead stopping the NCAA, conferences, institutions, and other governing bodies from restricting what student-athletes could do. However, as the year has gone by, and we have seen a mostly many posited pre-2021. Already, we are seeing positive effects of college athletes being allowed to monetize while sharpening their athletic skills in college, with superstars who may in the past have jumped early to capitalize on their narrow windows hands off approach with NIL from the NCAA, states have recognized that those with more restrictive rules are really only hurting themselves via the recruiting trail and the big dollars that follow, and states without laws on the books are realizing there isn’t a need for such a law.

When there are laws that affect interstate commerce, and a conflict in state laws, the next logical step is for the federal government to intervene and create an all-encompassing law. But, with NIL, once the states passed their own legislation and the NCAA relaxed the policy, the need for federal legislation waned. After a full year of NIL, we have seen that student­athletes have been free to earn money off NIL, and there hasn’t been any real need to enforce any of the laws as thus far. The states who don’t have laws on the books are functioning just fine, and states who have somewhat restrictive laws on the books are putting forth amendments or removing those laws. What may happen is states will continue to either terminate their laws in favor of schools managing their policies or allow those same laws to expire in lieu of the same.

Instead, this author believes the future lies in the NCAA governance committee, who is currently meeting, thoughtfully, and carefully discussing the future of NIL. The NCAA, through the first year of NIL has shown that they are open to college athletes making money off their NIL. With the belief that super conferences are on the horizon and thus another potential massive shakeup, now is the time for the governing body of amateur athletics to take the reins and remove the power of governance from the states. If the NCAA were to devise a policy, modeled after that of the states, which effectively allows student-athletes to monetize their NIL with some restriction for team unity, fairness, and sensitive categories, NIL could be shaped in such a way to allow for the continued growth of college athletics, rather than its demise as, deciding to remain in college for additional years. At the end of the day, the body that was created to help guide college athletics has a great opportunity to do so now.

Katie Hoffman is General Counsel of Opendorse. Katie is developing the legal department to navigate intercollegiate athletics, multimedia marketing, technology, and the role of NIL across the sports’ industry while managing all aspects of legal issues of a technology firm. Katie received her J.D. from the University of Miami. This article was republished from the Nebraska Lawyer, the official publication of the Nebraska State Bar Association.