By Adam R. Bialek and Dara Elpren*
On September 10, 2024, four former University of Michigan football players, Denard Robinson, Braylon Edwards, Michael Martin, and Shawn Crable (the MI Plaintiffs) filed a putative class action lawsuit on behalf of all former University of Michigan football players who played prior to 2016 against the Big Ten Network (BTN) and the National Collegiate Athletic Association (NCAA) (the MI Defendants), seeking in excess of $50 million for what the MI Plaintiffs claim was a “wrong perpetuated on college athletes for decades.” The lawsuit alleges that the ex-collegiate players were “unlawfully denied” name, image, and likeness (NIL) earnings during their college careers before June 15, 2016, and are entitled to “a present and future share of any revenue generated from the use of their publicity rights.”
Within two weeks after the MI Plaintiffs’ suit was filed, on September 23, 2024, Heisman Trophy winner and College Football Hall of Famer Reginald “Reggie” Bush filed suit against the University of Southern California (USC), the Pac-12 Conference (Pac-12), and the NCAA (the CA Defendants), alleging similar violations of the California Cartwright Act for unreasonable restraints of trade or commerce, a violation of the California Unfair Practices Act, and for unjust enrichment.
Subsequently, on October 4, 2024, former Ohio State football player Terrelle Pryor, on behalf of himself and all others similarly situated, filed suit against the NCAA; Learfield Communications, LLC; The Ohio State University; and The Big Ten Conference, Inc. (the OH Defendants), alleging that the OH Defendants and their co-conspirators engaged in fraudulent concealment of their misuse of the publicity rights of Pryor and the class under the guise of rules they claimed benefited student-athletes, preserved purported amateurism, and protected the integrity of college sports—all in order to maximize their profits at the expense of Pryor and the class. Pryor brought antitrust claims under the Sherman Act and asserted claims for unjust enrichment.
The essence of these lawsuits is that the MI, CA and OH Defendants (collectively, Defendants) allegedly profited from the use of the players’ NIL rights without compensating the players, with the Defendants earning millions of dollars at the athletes’ expense.
This is the latest chapter in a long saga of litigation surrounding the issue of college athletes earning money based on the use of their NIL, and the success of these suits could open the floodgates to more litigation, which could have a significant financial impact on the college sports industry. In addition, the lawsuits have been filed while the NCAA is attempting to resolve a large class action that stands to provide a framework for college athletes to profit from their NIL though NIL collectives.
Understanding NIL in the College Athletics Landscape
The NCAA is the organization that administers intercollegiate athletics. NIL refers to the rights of college athletes to profit from their identity and persona. Historically, student-athletes were barred from profiting from their NIL through sponsorship deals due to the NCAA’s emphasis on amateurism. It is important to understand how these rules were developed.
The NCAA “was founded in 1906 to regulate the rules of college sports and protect young athletes.” The NCAA website further states that “[after] World War II, the NCAA adopted the “Sanity Code,” principles that covered financial aid, recruitment and academic standards, intended to ensure amateurism in college sports.” Once football games began to be televised live, college athletics grew and the larger schools began to invest more in their programs, while smaller budget schools struggled to keep pace.
In 1973, the NCAA leadership divided its membership into three divisions with each having its own legislative powers and separate championships. In 1978, Division I was separated into I-A and I-AA, which were subsequently renamed for football in 2007 to the Football Bowl Subdivision and the Football Championship Subdivision. In June 2021, the governing bodies for all divisions “adopted a uniform interim policy suspending NCAA name, image, and likeness rules for all incoming and current student-athletes in all sports. Association leaders pledged to continue to work with Congress to adopt federal legislation to support student-athletes.”
Since then, the NCAA has expanded the scope of allowable payments to student-athletes; however, the scope arguably was not expanded enough. The controversy about paying student-athletes started its first successful challenge to the NCAA’s grip on college athletes’ financial rights in 2009 when Ed O’Bannon, a former UCLA basketball player, filed a class-action antitrust lawsuit against the NCAA and the Collegiate Licensing Company. In 2015, the U.S. Court of Appeals for the Ninth Circuit held that schools could raise compensation for student athletes to the full cost of attending college; however, schools were not required to pay student-athletes a portion of licensing revenues. O’Bannon v. NCAA, 802 F.3d 1049, 1052.
In June 2021, in NCAA v. Alston, 594 U.S. 69, the U.S. Supreme Court effected a significant change, holding that the NCAA violated federal antitrust law, 15 U.S.C. § 1, by limiting the education-related benefits schools could offer student-athletes. Thereafter, the NCAA launched new rules allowing schools to set their own NIL policies. Since 2022, 32 states have passed NIL laws, all of which are mostly modeled after the California “Fair Pay to Play Act”—the first state NIL law enacted, which makes it illegal for schools in California to deny student-athletes the right to earn a profit from their NIL, and permits student-athletes to hire agents for securing and negotiating NIL deals (California Senate Bill 206).
Now, student-athletes have an opportunity “to receive compensation from third parties using their personal brand, often referred to as their name, image, and likeness.” Athletes now can benefit by endorsing products, making public appearances, signing sponsorship deals, and monetizing their social media accounts. NCAA rules currently “allow athletes to receive compensation for use of their NIL; however, NIL activities may not be used to compensate an athlete for athletics participation or achievement (i.e., pay-for-play). Regulations surrounding NIL also vary by jurisdiction and organization. Some state governments and schools have implemented rules allowing athletes to profit from their NIL, while others have restrictions or are in the process of developing policies.”
As of March 2024, more than 450,000 student-athletes across the United States have taken advantage of new NIL laws, partnering with local businesses to large corporations. For example, Caitlin Clark, arguably one of the most prominent female student-athletes in 2024, had 11 known NIL deals that were worth a combined estimate of $3.1 million—including Nike, Gatorade, Buick, State Farm, and others.
Despite this progress, the relief obtained was only prospective. For several years, there had been little recognition that student-athletes who came before should be entitled to compensation for the use of their NIL.
The NCAA Continues to Face Legal Action
Since the U.S. Supreme Court decision in the antitrust case National Collegiate Athletic Association v. Alston, the NCAA has faced a series of lawsuits seeking compensation for the failure to pay student-athletes before the rules changed. In a now consolidated case, In re College Athlete NIL Litigation, the NCAA had to address the issue of compensation raised by student-athletes and former student-athletes. This consolidated litigation began as two separate actions: (1) House v. National Collegiate Athletic Association, 4:20-cv-03919 (N.D. Cal) (House) and (2) Oliver v. National Collegiate Athletic Association, 4:20-cv-04527 (N.D. Cal) (Oliver).
In re College Athlete NIL Litigation was brought by Sedona Prince, a Division I student-athlete who competed for the University of Oregon’s women’s basketball team, and Grant House, a Division I student-athlete who competed for Arizona State University’s men’s swimming and diving team. Oliver was brought by Tymir Oliver, a former Division I student-athlete who competed for the University of Illinois’s men’s football team. In these lawsuits, “Plaintiffs asserted claims against Defendants arising out of injuries they allegedly suffered as a result of certain NCAA rules, which are set and enforced by agreement of Defendants.”
The lawsuit claims:
“… the rules at issue restrict the compensation that student-athletes can receive in exchange for the commercial use of their names, images, and likenesses (NIL), and prohibit NCAA member conferences and schools from sharing with student-athletes the revenue they receive from third parties for the commercial use of student-athletes’ NIL. Plaintiffs allege that, absent the rules at issue, the NCAA and its member conferences and schools would allow student-athletes to take advantage of opportunities to profit from their NIL, and NCAA member conferences and schools would share with student-athletes the revenue they receive from third parties for the commercial use of student-athletes’ NIL. The claims asserted in House and Oliver were for (1) conspiracy to fix prices in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1; (2) group boycott or refusal to deal in violation of Section 1 of the Sherman Act; and (3) unjust enrichment. Plaintiffs sought an injunction restraining Defendants from enforcing the challenged NCAA rules; a judgment declaring void the challenged NCAA rules; damages; and attorneys’ fees.”
Recently, the NCAA and the “Power Five” conferences (the ACC, Big 12, Big Ten, Pac-12, and SEC) agreed to a proposed settlement in the In re College Athlete NIL Litigation class action lawsuit, which would call for “total back damages of approximately $2.78 billion, to be paid over 10 years, equating to approximately $280 million annually with distribution of back damages as determined by plaintiffs.” The fund was to establish retroactive damage payments for former college athletes going back to 2016 for those student-athletes who did not earn compensation for their NIL. It also would allow college athletic departments to opt into revenue sharing directly with current and future college athletes, amounting to approximately $20 million per school, per year.
This revenue-sharing model, however, has been cause for concern. Several groups have objected to the proposed agreement, claiming that the settlement illegally restricts future players who are not yet members of the lawsuit, and that the settlement mimics a labor agreement without providing for a players’ union. The U.S. District Judge for the Northern District of California, Claudia Wilken, appeared concerned that regulations on “pay-for-play” would not be eliminated in the current proposal, and she advised the parties to “go back to the drawing board” after voicing concerns regarding the NCAA’s efforts to limit athlete compensation from outside entities.
The parties reconvened with Judge Wilken on September 26, 2024, to further discuss the settlement. The plaintiffs filed a Supplemental Brief in Support of Preliminary Settlement Approval, which attempted to clarify the settlement and the term “booster,” and argued that the settlement as a “whole” should be approved. Additionally, the plaintiffs filed a third amended complaint, adding allegations and a new named plaintiff, Nicholas Solomon—a former Division I men’s lacrosse player at the University of North Carolina. On October 7, 2024, Judge Wilken granted preliminary approval to the settlement. The final approval hearing is scheduled for April 7, 2025.
While the In re College Athlete NIL Litigation settlement would seemingly cover an estimated 14,500 Division I athletes who played between June 15, 2016, and November 3, 2023, when the class was established, there is a void for those players whose NIL was used prior to that time, and which continues to be exploited. The recently filed Robinson case seems to address this void.
At issue in Robinson is whether former student-athletes can successfully obtain retroactive compensation for their athletic work performed prior to the passing of NIL legislation. The suit argues that the BTN and NCAA made money from and continue to exploit the performances of the MI Plaintiffs and other Michigan Wolverine football players. The notable players argue they made significant contributions during their time at the University of Michigan that continue to be discussed and highlighted in the media, continuously providing the MI Defendants with the opportunity to capitalize on the MI Plaintiffs through television broadcasts, advertisements, online content and merchandise sales; and yet, the MI Plaintiffs have received no compensation.
For example, Robinson was on the cover of the EA Sports popular NCAA Football 14 video game released in July 2013, but he received no compensation despite the NCAA profiting from its sale of 1.5 million copies. Today, however, EA Sports provides a standard $600 to every participant in the College Football 25 video game through a NIL agreement, with Texas quarterback Arch Manning earning upwards of $50,000 to promote the game and star in a commercial.
The MI Plaintiffs characterize this “exploitation” of student-athletes as a “systemic issue” and therefore seek to protect future generations of student-athletes and ensure they will be compensated for their talent and work. Additionally, the MI Plaintiffs seek compensation for any revenue generated from the use of their past publicity rights, including but not limited to the use of their NIL during their period of eligibility and after through licensing, marketing, promotion, or other income streams known or to be later discovered. The relief sought also includes declaratory and injunctive relief, compensatory and punitive damages, and an award of attorneys’ fees and costs.
In his suit, Reggie Bush alleges that his hard work as an athlete at USC “translated into billion-dollar television deals, multimillion-dollar coaching salaries, extravagant facilities, and lucrative commercial licensing and sponsorship agreements that greatly benefit the NCAA, USC, and the Pac-12.” The CA Defendants reaped significant financial rewards from Bush’s NIL—during the time Bush played at USC, “Pac-12 was making $32.2 million a year for its media rights deal with ESPN, ABC, and Fox Sports Network.” Pac-12 also renegotiated existing television contracts “to be paid $87.6 million—a $56.7 million increase.”
Bush claims that the CA Defendants “entered into, and continue to enter into contracts … in restraint of trade…” and that the CA “Defendants’ unlawful conduct deprived [Bush of] compensation for the use of his name, image, and likenesses—property rights with economic value. This unreasonable restraint on competition has artificially limited supply and depressed compensation paid to [Bush] for use of name, image and likeness.” Bush further claims that the CA “Defendants continue to restrict [him] from selling his name, image and likeness in the relevant free market as it relates to the NCAA, USC, or Pac-12.”
Like other significant college football players, Bush was the face of the of EA Sports NCAA Football video game in 2007. The game raked in approximately $125 million. Further, USC made Bush #5 jerseys for both females and males—by the time Bush was drafted for the NFL, “USC made approximately $30 million off the sales of female and male Reggie Bush jerseys.” The complaint provides numerous other examples of the CA Defendants benefitting from Bush’s NIL. However, like the MI Plaintiffs in Robinson, Bush’s NIL continues to bring the NCAA millions of dollars of profit, while Bush has allegedly never seen a penny of compensation.
In a similar case filed on June 10, 2024, in Wake County Superior Court, 10 players from NC State’s 1983 national champion basketball team, also known as the “Cardiac Pack” (the NC Plaintiffs), alleged that the NCAA forced the student-athletes to sign away their publicity rights without compensation, and has since exploited these rights for more than four decades. The NC Plaintiffs contend that the NCAA “has conspired with conferences, colleges, licensing companies, and apparel companies to fix the price of student-athlete labor near zero and make student-athletes unwitting and uncompensated lifetime pitchmen for the NCAA.”
Most recently, on October 4, 2024, Terrelle Pryor, former Ohio State quarterback, filed suit alleging that he was wrongfully punished in 2011 for selling memorabilia and that the class of plaintiffs (defined as “all former student-athletes who competed on an Ohio State athletic team at any time prior to the changes to the name, image, and likeness rules of the NCAA”) were damaged by the OH Defendants’ conspiracy to illegally restrain trade “by fixing the compensation available to members of the Classes for their names, images, and likenesses at zero.” The class further claims that the “Defendants’ conduct caused members of the Classes to receive less compensation for their publicity rights and names, images, and likenesses than they would have received but for the conduct and elimination of a competitive market.” The OH Plaintiffs assert that the OH Defendants continue to use the athletes’ publicity rights without permission and adequate compensation through the use of videos that depict Pryor and the class and through replays of games, all of which are alleged to result in large income streams for the OH Defendants.
Takeaways
The NIL landscape is changing rapidly and frequently as the NCAA continues to be hit with an increasing number of antitrust and unfair competition lawsuits from prominent former college athletes. Even though there are efforts to resolve the current and recent past NIL situations, there are thousands of athletes who still may try to pursue such claims. There are myriad issues that will need to be addressed in these claims before it is clear how they will be handled.
While California has been a venue for several claims, cases also have been filed in North Carolina, New York, Ohio, and Michigan. As such, any rulings that are issued in these jurisdictions that are adverse to the California cases could set the stage for a circuit split, and possibly give the U.S. Supreme Court the opportunity to revisit these controversial issues. In the interim, the NCAA and its member institutions and conferences, as well as related entities that profited from the use of student-athletes’ NIL rights, continue to explore how best to redress the history of collegiate control over student-athletes’ rights, and how best to structure the system that now offers athletes the ability to earn millions of dollars while participating in what is supposed to be amateur sports.
*Adam Bialek is co-chair of Wilson Elser’s Intellectual Property & Technology practice. His practice includes a range of IP and cyber/tech/media legal services. Dara Elpren is a law clerk at the firm in the same practice.
