In 2015, the 9th Circuit Court of Appeals held that the NCAA’s amateurism rules were not exempt from antitrust scrutiny. [2] In response to the Court’s ruling, the NCAA allowed members to give scholarships to student-athletes up to the full cost of attendance. [3] This means that scholarships for student-athletes now included additional expenses beyond tuition, room and board, and books and fees. [4]
Soon thereafter, California’s legislature adopted the Fair Pay to Play Act, which prohibited the NCAA from penalizing athletes in the state of California who personally profited off their own name, image, and likeness (“NIL”). [5]The popularity of the Fair Pay to Play Act incentivized other states to adopt similar policies. [6] In 2021, the NCAA enacted an interim policy that allowed student-athletes to engage in NIL activity that complied with state laws. [7]However, the NCAA reiterated that the rules against pay-for-play and recruiting inducements will still stand in the ever-changing world of NIL. [8]
Given the variance between state NIL policies, NCAA President Mark Emmert urged Congress to pass a federal law that would supersede the various state laws. [9] Emmert’s pleas wouldn’t come to fruition until 2024 when Judge Wilken preliminarily approved the House Settlement between the NCAA, its institutions, and its conferences. [10] The settlement focuses on the role of boosters and collectives while attempting to provide some order to the NIL landscape. [11] While the NCAA awaits the final approval hearing, which is scheduled to take place on April 7th, its member institutions are left to clean up the mess. [12] This article will explore two of the more prominent issues stemming from the NCAA’s inability to monitor NIL: 1) Jaden Rashada’s lawsuit against the University of Florida [13] ; and 2) Matthew Sluka’s departure from UNLV. [14]
Jaden Rashada
As the seventh-best quarterback in his class, Jaden Rashada was recruited by several of the country’s elite college football programs. [15] Rashada was offered a $9.5M deal to commit to the University of Miami. [16] Ultimately, he turned down the offer and accepted a $13.85M NIL contract from the University of Florida (“UF”). [17] However, less than a month after flipping his commitment to the UF, Rashada received a letter from the Gator Collective “purporting to terminate” the contract. [18] Head coach Billy Napier and other Gator boosters insisted that they would “make good” on the promised deal. [19]
As National Signing Day approached, Rashada’s deal was far less than the $13.85M initially promised. [20]Rashada, wary of the lack of a written contract, called Napier, who promised him a $1M payment if he committed to UF on National Signing Day. [21] Once Rashada committed, those affiliated with UF quickly recanted their promises, as the University no longer had the amount of NIL money available to fulfill the representations made to Rashada [22]
Rashada alleges that Napier and his fellow Gator boosters had no intention or ability to make good on the offer. [23] Rashada filed suit in the U.S. District Court in Pensacola charging the program with fraudulent misrepresentation and inducement, aiding and abetting fraud, and civil conspiracy to commit fraud. [24] Lawsuits of this nature have become quite common in the “Wild West” that is today’s college NIL landscape. [25] Luckily for the NCAA, the proposed House Settlement will give more power to NCAA’s enforcement wing, mitigating the possibility of similar misconduct in the future. [26]
Matthew Sluka
Similar to Jaden Rashada, Matthew Sluka decided to leave an elite college football program after an NIL deal never materialized. [27] Sluka’s redshirt preserved his final season of eligibility and allows him to play elsewhere in 2025. [28]
Sluka decided to sit out the rest of the 2024 season over a $100,000 NIL payment that was promised by a UNLV assistant coach. [29] UNLV interpreted Sluka’s payment demands as a violation of the NCAA’s pay-for-play rules, as well as Nevada state law. [30] UNLV paid Sluka a $3000 appearance fee for an event this summer but stated that they never made the $100,000 offer and that they had upheld all their contractual and financial commitments for the season. [31] The fact that Sluka’s deal came from offensive coordinator Brennan Marion instead of head coach Barry Odom only complicated the situation further. [32]
In addition, Sluka’s agent, Marcus Cromartie, was not registered with the state or school before fostering the deal, thus he was unauthorized to execute the transaction. [33] This has many critics claiming that it would be better for all involved if the schools directly controlled athlete compensation, rather than allowing brands and collectives to negotiate independent deals. [34] As it currently stands, schools are not allowed to directly pay NIL money but can identify NIL opportunities and facilitate deals between athletes and third parties. [35] Unfortunately, there is still a lack of meaningful oversight or accountability in the NIL space, allowing collectives and third parties to exploit student-athletes through anticompetitive practices. [36] The NCAA is optimistic that the House Settlement will reshape interactions with these third-party entities to assure that promises made to student-athletes are not broken. [37]
Conclusion
The House Settlement will try to provide more guidance and stability to the murky world of NIL. [38] All deals that come from a booster or company resembling an NIL collective will be required to go through a clearinghouse to ensure that they are of fair market value. [39] The NCAA’s goal is to limit payment for services that they feel do not equate to the athlete’s objective market value.[40]
Labor advocates argue that it is outside the NCAA’s purview to set caps on third-party payment without facilitating a collective bargaining agreement with the student-athletes. [41] These proponents claim that collectives are an essential part of college athletics and that this proposal will mitigate their effectiveness. [42] On the other hand, those in favor of the settlement’s restrictions on collectives will emphasize that they were at the root of both Rashada’s [43] and Sluka’s issues. [44] All of these arguments will need to be addressed before Judge Wilken can grant final approval on April 7th. [45]
Ethan Chaiet (guest writer) is a 2L at the Charles Widger School of Law at Villanova University. He is a part of the Football Negotiation Team, and is interested in name, image, likeness (NIL) and its impacts on college athletics. He hopes to work with a marketing agency or institution to facilitate sponsorship and endorsement deals for student-athletes.
References:
[1] Photo by Jacob Rice on Unsplash
[2] See O’Bannon v. National Collegiate Athletic Association, 802 F.3d 1049, 1053 (2015) (declaring NCAA compensation rules are unlawful restraint of trade).
[3] See Id.
[4] See Eden Laase, O’Bannon vs. NCAA Results Explored, The Gonzaga Bulletin (October 26, 2016) https://www.gonzagabulletin.com/sports/obannon-vs-ncaa-results-explored/article_2bcaddee-9bd7-11e6-b3dd-e7ca37a83d69.html
(explaining benefits accrued in cost of attendance scholarship).
[5] See Michael McCann, What is Next After California Signs Game Changer Fair Pay to Play Act Into Law, Sports Illustrated (September 30, 2019) https://www.si.com/college/2019/09/30/fair-pay-to-play-act-law-ncaa-california-pac-12(guaranteeing colleges athletes right to profit off their identities).
[6] See Id.
[7] See Tim Tucker, NIL Timeline: How We Got Here and What’s Next, The Atlanta Journal-Constitution (March 18, 2022) https://www.ajc.com/sports/georgia-bulldogs/nil-timeline-how-we-got-here-and-whats-next/EOL7R3CSSNHK5DKMAF6STQ6KZ4/
(detailing how college athletes across nation began signing endorsement deals).
[8] See Id.
[9] See Id.
[10] See Pete Nakos, Judge Preliminarily Approves House v. NCAA Settlement, ON3 (October 7th, 2024) https://www.on3.com/nil/news/judge-preliminarily-approves-house-v-ncaa-settlement/
(outlining terms of House Settlement and impacts on former, current, and future student-athletes).
[11] See Id.
[12] See Id.
[13] See Joe Sabin, Rashada Lawsuit Highlights NCAA’s Failures in NIL Era, Forbes (October 11, 2024) https://www.forbes.com/sites/joesabin/2024/06/17/rashada-lawsuit-highlights-ncaas-failures-in-nil-era/ (charging University of Florida athletic department with fraudulent misrepresentation, civil conspiracy to commit fraud, and tortious interference with business relationship).
[14] See Jason Page, The Supreme Court Created a Wild West for College Athletes, Matt Sluka Proves It., MSNBC(September 28, 2024, 9:00 AM) https://www.msnbc.com/opinion/msnbc-opinion/unlv-fresno-state-qb-football-saturday-sluka-rcna173100
(announcing Matthew Sluka’s decision to leave UNLV football program motivated by unfulfilled verbal offer of $100,000 promised by assistant coach).
[15] See Rashada v. Hugh Hatchcok, 2024 WL 4002658 (N.D. Fla. 2024) (providing background on Jaden Rashada’s recruitment process).
[16] See Paula Lavigne and Dan Murphy, Jaden Rashada Sues Billy Napier, Florida Booster Over NIL Deal, ESPN (May 21, 2024, 9:12 AM) https://www.espn.com/college-football/story/_/id/40189896/jaden-rashada-florida-recruit-lawsuit-nil(explaining funding behind $13.85M agreement over four years).
[17] See Id.
[18] See Id.
[19] See Id.
[20] See Id.
[21] See Id.
[22] See Id.
[23] See Id.
[24] See Mark Long, Fromer Florida Signee Jaden Rashada Sues Coach Billy Napier and Others Over Failed $14M NIL Deal, AP News (May 21, 2024) https://apnews.com/article/jaden-rashada-florida-lawsuit-nil-bedfa7d2c4b2aadc11663e103be03f69 (defining parameters of Jaden Rashada’s allegations against University of Florida).
[25] See Id.
[26] See Jesse Dougherty, Judge Gives Preliminary Approval to Settlement in Major NCAA Antitrust Case, The Washington Post (October 7th, 2024, 5:12 PM) https://www.washingtonpost.com/sports/2024/10/07/ncaa-house-settlement-preliminary-approval/ (outlining NCAA enforcement power under proposed House Settlement).
[27] See Andrew Graham, Nick Saban Reacts to Matt Sluka Redshirt Decision, Cautions Against ‘Consequences’ of NIL Agents, ON3 (Septmeber 27, 2024) https://www.on3.com/news/nick-saban-reacts-to-matt-sluka-redshirt-decision-cautions-against-consequences-of-nil-agents/
(crticizing Sluka’s redshirt decision while discussing risk of opt-out midseason).
[28] See Eric Olson, Why is UNLV QB Matthew Sluka Walking Away From His Undefeated Team?, AP News (Septmeber 26, 2024) https://apnews.com/article/unlv-sluka-what-happened-5237f0dba1c523d2d0e74523c7f64a4e (explaining the prevalence of broken promises when NCAA lacks control over collectives and boosters).
[29] See Id.
[30] See Pete Thammel and Adam Rittenberg, Matthew Sluka’s NIL Dispute with UNLV Hinges on Verbal Offer, ESPN(September 25, 2024, 6:05 PM) https://www.espn.com/college-football/story/_/id/41438172/matthew-sluka-nil-dispute-unlv-hinges-verbal-offer
(claiming Sluka’s representations were in violation of NCAA bylaws and Nevada state law).
[31] See Id.
[32] See Id.
[33] See Richard Johnson, Matthew Sluka’s NIL fallout with UNLV raises questions about agent’s unregistered status in Nevada, CBS Sports, (Septmeber 25, 2024, 9:34 PM), https://www.cbssports.com/college-football/news/matthew-slukas-nil-fallout-with-unlv-raises-questions-about-agents-unregistered-status-in-nevada/ (detailing war of words between Sluka and UNLV representation).
[34] See Olson, supra note 27
[35] See Id.
[36] See Id.
[37] See Olson, supra note 27
[38] See Dougherty, supra note 25
[39] See Id.
[40] See Id.
[41] See Id.
[42] See Id.
[43] See Long, supra note 23
[44] See Olson, supra note 27
[45] See Dougherty, supra note 25
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