Charlie Baker halts NCAA's NIL investigations following preliminary injunction in Tennessee
In the wake of the preliminary injunction halting the NCAA’s power to prohibit recruits and transfer portal athletes from negotiating their NIL, President Charlie Baker issued updated guidance to membership.
In a memo sent to schools on Friday, Baker announced all NCAA investigations involving third-party NIL collectives have been paused.
“In response to this latest order, the Division I Board of Directors directed NCAA enforcement staff to pause and not begin investigations involving third-party participation in NIL-related activities,” Baker wrote. “There will be no penalty for conduct that occurs consistent with the injunction while the injunction is in place. I agree with this decision, while the progress toward long-term solutions is underway and while we await discussions with the attorneys general.
“In circumstances that are less than ideal, this at least gives the membership notice of the board’s direction related to enforcement.”
As expected, Baker wrote that the NCAA’s prohibition of pay-for-play, institutional payments and quid-pro-quo requirements are still in place. The adoption of NIL transparency and consumer protection measures in January will not be impacted and remain on track for Aug. 1.
“I realize pausing NIL-related enforcement while these other bylaws are upheld by the injunction will raise significant questions on campuses,” Baker wrote. “This is precisely why a D-I meeting room, not a courtroom, is the best place to change NCAA policy. This is the only practical response to the injunction at this time, and we hope the attorneys will work with us to clarify next steps. Additionally, the D-I Board, NIL Working Group and NCAA staff are fully aware of the need to bring about clarity for the role of institutions as soon as possible.
“In fact, the council introduced a proposal in January intended to clarify the role of schools in NIL matters. That proposal will be on the council and board agendas this April.”
The preliminary injunction, announced on Feb. 23 in the Eastern District Court of Tennessee, comes after a preliminary injunction hearing on Feb. 13. Judge Clifton L. Corker heard both sides in the hearing, which included NCAA attorneys struggling to make clear to the court whether prospective athletes can engage in conversations about NIL opportunities.
The ruling allowed booster-funded NIL collectives to communicate with high school recruits and transfer portal players.
“Without the give and take of a free market, student-athletes simply have no knowledge of their true NIL value,” Corker wrote in his decision. “It is this suppression of negotiating leverage and the consequential lack of knowledge that harms student-athletes.”
The court ordered that the NCAA and “all persons in active concert or participation with the NCAA” are restrained from enforcing the interim NIL policy, NCAA bylaws or any other authority that prohibits athletes from negotiating NIL compensation.
The case was filed in the aftermath of the NCAA launching an investigation into Tennessee for multiple alleged NIL violations. Corker wrote in the decision that “encouraging free and fair price competition in the NIL market by enjoining the NCAA’s NIL-recruiting ban will serve the public interest.”
“More needs to be done, and that’s why I proposed to transform the Division I model while delivering more benefits to student-athletes,” Baker wrote on Friday. “It’s why the NIL working group and many other members are working on additional improvements. These are issues college sports leaders must resolve with student-athletes soon, and as NCAA president, I am committed to working with all stakeholders to find consensus and move forward.”
NCAA told members to wait for guidance
This is the second time the NCAA has addressed the preliminary injunction, but it’s the first time the organization issued clarification to its members.
On Monday, Baker issued a memo to the membership asking for patience in formulating a response to the ruling. Baker said in the memo released on Feb. 26 that he plans to convene the Division I Board of Directors and the Board of Governors “to discuss next steps.”
Baker wrote that delivering accurate information is essential. One source described the letter to On3 as a “wait and see” email.
“As you may know, we made clear that the NCAA fully supports the rights of student-athletes to benefit from exercising their NIL rights, but expressed concern that granting this preliminary injunction would make what is currently a chaotic environment worse,” Baker wrote. “You have many questions, and we know you need to hear from us. But given the significance and sweep of this decision, it’s critical that our guidance to you and your colleagues on this ruling be accurate.
“The ruling affects several NCAA bylaws and policies in Division I, and the NCAA is quickly developing guidance on which rules are enjoined by the court order.”