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NCAA pauses investigations into 3rd-party NIL deals with athletes

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  • ASSOCIATED PRESS / MARCH 12, 2020
                                NCAA signage outside the headquarters in Indianapolis.

    ASSOCIATED PRESS / MARCH 12, 2020

    NCAA signage outside the headquarters in Indianapolis.

After another courtroom loss, the NCAA has told its enforcement staff to halt investigations into booster-backed collectives or other third parties making name, image and likeness compensation deals with Division I athletes.

In a letter to member schools on Friday, NCAA President Charlie Baker said the the Division I Board of Directors directed enforcement staff “to pause and not begin investigations involving third-party participation in NIL-related activities.”

The move comes a week after a federal judge granted a preliminary injunction in a lawsuit brought by the attorneys general of Tennessee and Virginia. The antitrust suit challenges NCAA rules against recruiting inducements, saying they inhibit athletes’ ability to cash in on their celebrity and fame.

“There will be no penalty for conduct that occurs consistent with the injunction while the injunction is in place,” Baker wrote in the letter obtained by The Associated Press. “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.”

The judge’s decision had prompted speculation about whether the NCAA would appeal as it fights to maintain its decades-long amateurism model for athletes in the face of rapid change. Baker noted that three specific policies involving NIL compensation remain in place and will be enforced, including prohibitions on schools directly playing athletes and any payment or compensation for specific athletics performance.

Those who work for and with the booster-funded collectives that handle millions of dollars worth of NIL deals with college athletes say lifting the rules will bring more clarity and simply make permissible what was once against the rules.

The NCAA’s only jurisdiction over collectives has been rules banning boosters from being involved in recruiting and from offering money or something of value to attend certain schools.

Even then a school was at risk of being punished if a collective broke those rules. That’s what happened at Tennessee, which drew scrutiny from the NCAA for NIL deals between athletes and The Vol Club, managed by Spyre Sports Group marketing agency.

Faced with a wave of state laws clearing the way for college athletes to earn money based on their celebrity, the NCAA lifted its ban on in 2021 while making it clear that its approximately 500,000 athletes are still considered amateurs who cannot be paid to play. NIL wasn’t meant to be a stand in for paying college athletes, but that’s what it has become.

Baker and the NCAA have so far sought unsuccessfully a limited antitrust exemption from Congress to put rules in place that it says will preserve the amateurism model of college athletics. That model is under fire from multiple lawsuits and efforts by athletes to be considered school employees who can seek compensation, including collective bargaining rights.

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