The NCAA has reached a settlement with the attorneys general of Tennessee and Virginia over its rules prohibiting name, image, and likeness (NIL) compensation for recruits. The settlement in principle was filed on Friday with the U.S. District Court for the Eastern District of Tennessee in Greeneville. The final terms of the settlement will be finalized and a request for a permanent injunction will be made by March 17.
Tennessee Attorney General Jonathan Skrmetti emphasized that the settlement lays the groundwork for a permanent solution, stating that it blocks the NCAA’s “unlawful enforcement” against Tennessee students and schools. The settlement resolves the antitrust lawsuit filed a year ago by the attorneys general of Tennessee and Virginia, challenging the NCAA’s ban on NIL compensation in the recruitment of college athletes. This lawsuit was prompted by the NCAA’s investigation of the University of Tennessee for potential recruiting infractions.
In February, U.S. District Judge Clifton Corker issued a preliminary injunction that undercut a fundamental principle of the NCAA’s model of amateurism, barring the organization from enforcing its rules prohibiting NIL compensation for recruits. This was another blow to the NCAA’s ability to govern college sports and its more than 500,000 athletes.
The NCAA had requested an extension before filing a response on January 20, with a status conference scheduled for January 23. The lawsuit argued that the NCAA’s rules unfairly restrict how athletes can commercially use their name, image, and likeness, violating the Sherman Act and harming the welfare of athletes and states.
While final details are being worked out, Skrmetti said the settlement protects athletes’ NIL rights during recruitment and prohibits the NCAA from reviving its NIL recruiting ban. The lawsuit was filed a day after the University of Tennessee’s chancellor criticized the NCAA for investigating the school for potential recruiting violations related to NIL deals.
This settlement is one of several legal cases facing the NCAA. On Friday, objections to the so-called House settlement, which calls for former athletes to receive millions in back pay and allows schools to distribute up to $20.5 million a year in payments to athletes for use of their NIL, were due.
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