'The NCAA is no more:' Tennessee's preliminary injunction win ripples across college sports
As of Friday afternoon, the NCAA has no jurisdiction over the transfer portal or NIL.
With Judge Clifton L. Corker granting the attorneys general of Tennessee and Virginia their preliminary injunction against the governing body’s NIL rules prohibiting negotiations for high school recruits and transfer portal athletes, the NCAA is close to powerless.
It’s not a devastating blow, as some have jumped to conclusions. But NCAA President Charlie Baker is unquestionably in uncharted territory.
The blunt reality is the lawsuits have continued to stack up. Arguably the largest one – House vs. NCAA – hasn’t even played out yet.
“The NCAA is no more,” a Power 4 head football coach told On3 over the weekend. “There are no rules. My buddies say I am coaching pro sports and I always say, ‘No, pro sports has rules and contracts. We have nothing guiding us.'”
NIL collectives are ready to capitalize after ruling
In the meantime, institutions and their donor-driven collectives are primed to capitalize. Inducements and pay-for-play have existed since the NCAA was first formed. But since the summer of 2021, when athletes first began to profit off their NIL, everything shifted. The dollars in the space have continued to climb. The top collectives operating on $10 to $15 million payrolls just for football.
There are also questions surrounding the injunction.
Corker wrote in his decision that “without the give and take of a free market, student-athletes simply have no knowledge of their true NIL value.” He also stated the court order was to stop the NCAA from enforcing NIL rules applicable to all recruits and schools in all states.
The three biggest questions institutions have asked their legal experts: Does jurisdiction matter, what is the role of state laws and how involved can universities be in deals with prospects? Technically, a quid-pro-quo is still required for NIL deals and pay-for-play is prohibited.
Yet, at the same time, collectives are ready to be as aggressive as ever in attracting and retaining talent.
“I think it’s important for people to realize, I saw the old term the ‘Wild, Wild West’ come out a lot this weekend,” said Russell White, the recently elected president of The Collective Association who also serves as the president of Oncoor Marketing, which manages multiple collectives. “While it’s removing some of these guardrails they were ones that didn’t need to be in place. You’re going to hear the stories about the kids getting more money or how they went about it. But it’s a huge step toward more transparency in the space. I think that’s what every invested stakeholder wants.”
Athletes now have free reign to negotiate
And on the flip side, suddenly, athletes can now openly bargain and negotiate with collectives and athletic programs. It’s not employment rights or revenue sharing. But it’s the closest the NCAA has ever seen to either in college sports history.
With it, players now need representation more than ever paired with an understanding of their value and the current NIL marketplace. The On3 NIL Valuation is the industry’s leading index that sets high school and college athletes’ projected annual value by combining Roster Value and NIL.
On3 is anticipating the projected spend for roster management for NIL collectives and schools at the Power Four level over the next 12 months will be roughly $325 million in college football. Closing in on the third anniversary of the NIL Era, Roster Value, mostly distributed by collectives, makes up 90% of all the dollars flowing in the marketplace.
“Despite what some fans and media believe, there is not an unlimited amount of money being deployed to manage rosters,” said Shannon Terry, the founder and CEO of On3. “Any model – whether it’s today’s broken NCAA ‘student-athlete’ construct or media rights sharing through employment, which is almost a certainty in the near future – demands efficiency based on the athlete and school knowing the athlete’s respective market value.”
How do NIL collectives move forward?
Outside of a statement released Friday night, the NCAA has yet to formally announce they are not going to enforce their NIL rules nationwide. The governing body openly accepted the injunction in the transfer portal lawsuit it is currently fighting. Plus, it announced transfer portal restrictions would be paused until the end of the 2023-24 academic year.
An official deal has not been announced in the NCAA’s battle with attorneys general in Tennessee and Virginia. But NIL collectives are not missing a beat. Multiple collectives across the country this weekend told On3 that strategy meetings are set for Monday morning with athletic departments to chart the best way forward.
Collectives could begin to hit the road and sit down with top prospects. Offer letters could become the latest trend in college sports. The basketball and football transfer portal windows are set to open again soon in the next couple of weeks. High school recruiting is in a dead period but will soon ramp up.
“How does it change the day-to-day? Most collectives will continue to operate the way they are, just maybe not as nervous about certain things or discussions they’ve had,” White said. “I don’t think it gets dramatically different. I don’t think people hit the next five-star quarterback up on Instagram Live and offer him a million bucks; I don’t think that happens tomorrow. Some things will change.”
One thing that collectives have expressed they hope will change is transparency in negotiations.
As On3 has previously detailed, finding the truth about lucrative financial packages has been a struggle in the past. With Friday’s preliminary injunction, transparency will now be permitted.
The one uphill climb collectives will continue to face is raising dollars. That’s always been a challenge, finding ways for common fans to donate. The top organizations in the space are powered by the richest boosters.
Having cash on hand while negotiating will be crucial, too.
“More money isn’t going to appear, now strategy is going to be key,” an SEC collective leader said.