The attorneys general of Tennessee and Virginia filed suit Wednesday against the NCAA, saying the body that regulates college sports does not have the right to block the increasingly common practice of wealthy boosters paying to attract top recruits.
The lawsuit was filed a day after it was revealed that the NCAA was investigating the University of Tennessee football program for recruiting violations involving a donor group that arranges to pay athletes. It could set up a broad legal battle over the very nature of college athletics, which is in the midst of a rapid transition from a strictly amateur policing system to an unfettered kind of professional market.
The driving force behind this change has been donor collectives, which are groups of alumni and other boosters who donate money used to compensate top athletes, sometimes in amounts approaching professional levels. They do this by taking advantage of the NCAA’s new “name-likeness” rules, or NIL, which were intended to allow athletes to be paid for endorsements, but in practice allow almost anyone to pay for them, and for almost any reason.
In reality, clubs pay salaries disguised as endorsements and now play a central role in the recruiting process for football, basketball and other sports.
The lawsuit seeks to remove one of the few NCAA rules restricting these collegiates — and one of the last vestiges of the amateur model.
This rule is that collegiates cannot recruit high school students or transfer students to play at their school of choice by offering them money.
The attorneys general, who took up the matter even before the NCAA released specific charges against the University of Tennessee, said the restriction amounted to an unlawful restraint of trade. They argue that collegiates should be free to outbid each other for recruiting, just as schools do for top coaches.
“This NIL recruiting ban restricts competition,” the attorneys general said in the lawsuit, arguing that the limit “artificially reduces the NIL compensation that college athletes could otherwise obtain in a free market.”
The NCAA did not immediately respond to a request for comment.
The lawsuit was filed by Tennessee Attorney General Jonathan Skrmetti, a Republican appointee who has often taken conservative legal positions in his 17 months in office. Reports Tuesday of the NCAA’s investigation into the University of Tennessee prompted an explosive response from the school and angered its fans.
The donor collective at the heart of the Tennessee case paid to fly a high school quarterback to campus on a private jet, according to a person familiar with the case. Tennessee released a statement saying it had followed NCAA rules and that its contract with the quarterback — which could allow him to earn $8 million — did not require him to attend Tennessee.
Virginia’s participation in the lawsuit raised the possibility that some other states with high-profile public school athletic programs could join the legal action. Virginia Attorney General Jason S. Miyares is an elected Republican.
The collectives first erupted in 2021 when the NCAA — having lost a series of court cases that eroded its regulatory authority — declined to challenge a series of state laws that allowed players to profit from their name, image and likeness. their.
For much of that time, there was little evidence that the NCAA was trying to police these collectives. The New York Times has counted more than 140 collectives now operating in schools across the country, with budgets that can reach $10 million or more.
In just a few years, college coaches and players say, collegiate money has become the dominant factor in recruiting and retaining athletes. Last year, for example, the starting quarterback at the University of Iowa told The Times that he had transferred from the University of Michigan after the Iowa varsity gave him a written offer outlining the amount he would be paid.
College athletics officials complained that the NCAA had allowed the name-image similarity system to become a disguised pay-to-play system.
Many state laws, including one enacted nearly three years ago in Tennessee, echo the NCAA’s ban on pay-to-play payments. Tennessee law states that compensation cannot be provided in exchange for athletic performance in order to “maintain a clear separation between amateur intercollegiate sports and professional sports.”
That contrasts with the argument made by Tennessee’s attorney general in Wednesday’s lawsuit, who appeared to accept that the collegiates were paying players to play for their school. The attorney general said athletes had the right to maximize those payments by canvassing schools to find where they would be paid the most.
“Very few college athletes go ‘pro’ in their sport, and so their NIL value is at its highest during their short collegiate careers,” the lawsuit said. “Their ability to negotiate the best NIL deal is critical.”
The result was a windfall for many players, but also a chaotic market that lacked the rules, unions and minimum wages that govern professional sports labor markets. In this semi-underground free agent market, college athletes had little sense of their true worth.
In recent weeks, the NCAA has also shown some signs that it is seeking to rein in collegiates.
NCAA president Charlie Baker has proposed allowing schools to enter NIL deals directly with athletes — a step that could lessen the impact of collegiates and could be codified by the league later this year. A top NCAA panel proposed other rules this month that would strengthen regulations, including requiring athletes to report any deals of more than $600 and forcing schools to further distance themselves from boosters found to have been involved in wrongdoing.
The NCAA’s enforcement wing fined Florida State University after a football coach there brought a potential transfer student to meet with a team. And he’s investigating the University of Florida, where a collegiate team offered a high school quarterback $13.85 million — but then failed to pay.
The lawsuit filed Wednesday seeks to create a legal ruling that would allow these types of transactions, ushering in an era where college athletes are treated as professionals even before they go to college.