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History of NIL 

To grasp how significant NIL is in the sports world, you have to first understand the complexity of amateurism, its deep history with the NCAA, and how we arrived at the current NIL landscape.

The NCAA was initially founded in 1906 as the Intercollegiate Athletic Association of the United States (IAAUS). It was officially been renamed the National Collegiate Athletic Association in 1910.

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In 1951, the NCAA officially enshrined amateurism in its identity by creating the term “student-athlete.” By using this term, the NCAA declared that college athletes were students and athletes only and could not be considered employees or be afforded rights under workers’ compensation laws.

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The NCAA's primary argument against athletes capitalizing on their name, image, and likeness was the concept of amateurism. The NCAA feared that, if amateurism was not firmly imbued in the identity of college sports, then NCAA would move towards the "pay-for-play" mentality of professional athletics. The NCAA's main argument for amateurism that they ultimately wanted to protect the integrity of college sports. 

 

Over the decades, the NCAA dealt with a variety of rule violations of all kinds -  academic eligibility scandals, crime, and athletic cheating, but the most commonly punished action was the violation of amateurism.

Notable NCAA Amateurism Violations

The NCAA has a rich history of protecting amateurism in college sports. Here are some examples of the more notorious scandals over the years

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SMU Football in 1980s

After it was discovered that SMU paid its football players to keep them, the NCAA levied the "death penalty," effectively erasing SMU's 1987 season and canceling their 1988 season.

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Illinous-Iowa Recruiting Scandal

Deon Thomas revealed that an assistant coach paid him to attend Illinois. The NCAA gave Illinois a one year post-season ban.

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Miami Pell-Grant Scandal

Among other violations, the University of Miami was found to have paid over $400,000 to its football players in the 1990s.

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Maurice Clarett 

Ohio State running back Maurice Clarett took thousands of dollars in benefits while a student-athlete.

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Michigan Basketball in 1990s

Michigan booster Ed Martin loaned $616,000 to to Michigan players. This costed UM a variety of awards and post-season appearances.

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Reggie Bush

2005 Heisman winner from USC Reggie Bush was forced to return his trophy  when it was revealed that he received pay-for-play compensation.

By 2014, things were starting to change, though.

Former UCLA basketball player Ed O’Bannon sued the NCAA after EA Sports used his image for the NCAA Basketball 09 video game.

 

The game featured an unnamed UCLA player who played O’Bannon’s position and closely resembled him in height, weight, skin tone, and jersey number without using his name.

Twenty former college athletes joined the suit as well, citing that the NCAA’s rules operate as an unreasonable restriction of trade and therefore violate antitrust laws.

The courts ultimately ruled in favor of the athletes, which required the NCAA to pay the plaintiffs $42.2 million in fees.

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O’Bannon v. NCAA marked a shift in mindset towards the NCAA and college athletes.

 

This case put the power back into the hands of the athletes and began to poke holes in the NCAA’s sovereign argument for amateurism.

 

In 2019, the California state Senate proposed the Fair Pay to Play Act, which would allow athletes to use their Name, Image, and Likeness to make money.

 

This meant that, if an athlete in California exercised their rights under the Fair Pay to Play Act, they could be ruled ineligible to compete by the NCAA.

 

While this was all going on, two lawyers, Shawne Alston and Justine Hartman, had simultaneously continued the legal battle that O’Bannon started by challenging the NCAA’s restrictions on Name, Image, and Likeness.

 

In 2019, this series of lawsuits was combined into NCAA v. Alston. In March, the Northern District Court of California ruled that the NCAA’s restrictions on NIL violated the Sherman Antitrust Act.

 

The NCAA appealed this decision to the U.S. 9th Circuit Court of Appeals, where the decision was upheld in May of 2020.

 

In 2021, NCAA v. Alston made it to the U.S. Supreme Court. On June 21, the Court issued its opinion, unanimously upholding the 9th Circuit Court’s decision.

 

Ten days later, the NCAA’s NIL rules and NIL state laws went into effect.

 

Athletes immediately celebrated their victory in this long-fought battle over NIL compensation, but for administrators, legislators, and the NCAA, NIL was a problem right out of the gates.

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“The NCAA was behind the eight-ball when [NIL] first happened,” Caleb Jarreau explained. “They were slow to react.”

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In the latter half of 2021, the University of Georgia and Louisiana State University both faced lawsuits over FOIA violations related to NIL disclosure. In both situations, courts ruled in favor of protected athlete privacy via FERPA, but these rulings did nothing to quiet the debate over what should be considered “private” in the NIL era.

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NIL continued to grow and evolve rapidly. 

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By February of 2022, NIL collectives begin discussing deals with recruits prior to them arriving on campus, and a month later, some recruits were signing deals upwards of $8 million dollars.

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Yet another lawsuit, House v. NCAA gained some momentum in 2023, arguing that the NCAA and Power 5 conferences are anticompetitive and have violated antitrust laws by limiting how much money college athletes can make.

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Most recently and notably was the NCAA’s investigation leak on the University of Tennessee, and the Tennessee attorney general suing the NCAA, which ended with a federal court suspending the NCAA from enforcing NIL rules.

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Shortly thereafter, the president of the NCAA, Charlie Baker, sent a letter to its schools, saying that they will not be pursuing any further investigations.

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"So basically, now it’s like the wild, wild west where anything is allowed."

- Caleb Jarreau, sports editor at University of Tennessee's student newspaper, the Daily Beacon

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