U.S. Supreme Court ruling has broad implications
By David Baugher
BridgeTower Media Newswires
RALEIGH, NC — What’s in a name?
For some amateur athletes, the answer may be defined in dollars and cents, thanks to court cases and legislative efforts that are fast changing the rules of the once-staid world of university athletics.
Last year’s U.S. Supreme Court ruling regarding NCAA policies on compensation of students may have been limited in scope but it continues to have broad implications, including on issues related to an athlete’s ability to capitalize financially on their own notoriety.
“Because of the way that the decision was interpreted, it led everyone to kind of jump to this conclusion that the NCAA doesn’t have the same powers to regulate individual student athletes’ commercialization of their name image and likeness,” said William “Corky” Klett III, an intellectual property attorney with Burr & Forman in Charleston and Columbia.
In NCAA v. Alston, the high court found that the association, with its billion-dollar revenue stream, is not exempt from the Sherman Act, a late-19th Century antitrust law intended to promote competition. The unanimous decision, which has prompted ongoing changes in NCAA policies, did not directly address name, image and likeness (NIL) matters. However, it has been widely seen as a shot across the bow to the National Collegiate Athletic Association’s longstanding restrictions that have previously limited amateur athletes’ opportunities to profit off their fame.
Of particular import was a concurring opinion by Justice Brett Kavanaugh which indicated that, although Alston only dealt with a limited set of concerns, future litigation is likely to widen the ramifications of its decision noting that the NCAA’s “current compensation regime raises serious questions.”
“Businesses like the NCAA cannot avoid the consequences of price-fixing labor by incorporating price-fixed labor into the definition of the product,” Kavanaugh wrote.
He closed pointedly with “The NCAA is not above the law.”
“Justice Kavanaugh’s concurring opinion gave everyone the impression that the business model of the NCAA was probably not valid,” said Klett, “and the whole concept of amateurism and not allowing athletes to be paid or commercialized or anything like that was probably not a good business model.”
On the other side of the state line in North Carolina, Bobby Robinson of Nexsen Pruet in Charlotte, agreed saying that there were already NIL cases bubbling up in the courts and “the writing was on the wall” for the NCAA.
“They knew without a shadow of a doubt that they would lose those cases and that it was time to change their policy,” said Robinson who has regularly worked with student athletes on such matters. “I always emphasize ‘policy’ because they weren’t operating under some other legal standard other than that they are a non-profit collegiate association and that was an internal policy that they created nearly 100 years ago.”
Still, the NIL issue had been on legislative radar screens even before the ruling was handed down. That includes in South Carolina where a 2021 law aimed to give students leeway, within certain parameters, to commercialize their identity.
However, such efforts, well-intentioned as they might be, have yielded uneven results and sometimes ended up sparking their own set of concerns. For instance, South Carolina’s law, passed just last year, included a provision that kept student athletes from using the logos of their team.
“That didn’t really quite seem work or make sense because that was the very reason that people would pay money was the association between the university and the athlete,” noted Klett.
The law was suspended earlier this year. NIL legislation in Alabama, also passed in 2021, was scrapped altogether.
“As we all know, particularly with college football, you don’t want to put your school or your state at a competitive recruiting disadvantage,” Klett said. “By being one of the states that tried to get out in front with a state statute, it was actually detrimental to the process. The states that didn’t do that, the universities were able to make up their own rules.”
The National Law Review recently noted legislative efforts to create or update NIL legislation in Florida, Kentucky and Virginia.
“You’ve got universities and state legislatures trying to scramble to keep up with what it means,” Klett said. “There is no national name, image and likeness statute like you have in other areas of intellectual property law.”
So far, North Carolina’s legislature has not passed any new measures on the matter. Robinson said that schools in the state currently rely on a combination of guidance from the NCAA and an executive order by Gov. Roy Cooper.
“Our firm is closely watching the legislative process with regards to whether or not it is going to be introduced during a certain legislative session,” he noted. “We do know that there have been some senators here who have advocated for this to be brought to the senate floor. We’re just waiting on that to happen.”
He feels that, over time, a general consensus may form in terms of best practices that will guide athletes, schools, attorneys and financial providers in making sure that the right safeguards are there to protect athletes. He also thinks that it may open a new world to some once-impoverished students looking to channel their abilities on the field into entrepreneurial ventures.
“There are top-tier athletes that can barely feed themselves in many instances,” he said. “This now allows them an opportunity to create some financial independence for themselves while also still being able to perform at the highest levels.”
In any event, a national approach may ultimately emerge to solve the issue and end the state-by-state and case-by-case situation that currently rules the day.
“Right now, it is the wild, wild west,” Robinson said. “It is a quilted approach only because there is no federal standard as of yet.”
Until one arrives, the issue of how student athletes can monetize their own images may keep filling legislative agendas and court dockets.
“Really, everyone is trying to figure out what to do with this,” Klett said.
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