For many years, college athletes fought for the right to license their name, image, and likeness (NIL) while keeping their amateur status and participating in college athletics. Since the NCAA conceded and allowed payments to student athletes, litigation has shifted to those athletes who now want to receive compensation for failing to be permitted to collect such payments while they were playing collegiate sports. Following our recent article in Sports Litigation Alert about former collegiate student athletes filing NIL antitrust lawsuits against the NCAA and others for retroactive compensation, interesting developments have ensued in the NIL legal landscape. In this update, we cover advancements in previously discussed lawsuits, newly filed NIL lawsuits, and new NIL legislation. 

Case Update: Retroactive Compensation for Ex-Michigan Football Players’ NIL 

After filing their lawsuit on September 10, 2024, against the National Collegiate Athletic Association (NCAA), among others (the MI Defendants), on December 12, 2024, the ex-Michigan football players (the MI Plaintiffs) asked a judge to certify their proposed student-athlete class on December 5, 2024; the MI Plaintiffs admit that it is early in the case to do so. The motion asks the judge to certify a plaintiff class, defined as follows:

All persons who were NCAA student athletes prior to June 15, 2016, whose image or likeness has been used in any video posted by or licensed by the NCAA, Big Ten Network, or their agents, distributors, contractors, licensees, subsidiaries, affiliates, partners, or anyone acting in concert with any of the foregoing entities or persons.

According to the motion, “Plaintiffs’ counsel has over 270 former student athletes who have joined this action,” and they estimate that there will be thousands of members. The NCAA and Big Ten Network have not yet responded to the MI Plaintiffs’ complaint. On December 17, 2024, the parties filed a joint stipulation to adjust deadlines, which provided the Defendants until January 13, 2025, to file responsive pleadings (the Defendants indicated that they intended to file motions to dismiss and/or to transfer venue), with a deadline to respond to the Motion for Class Certification suspended pending “resolution of Defendants’ forthcoming responsive motions.”

On January 13, 2025, the MI Defendants filed a Motion to Dismiss the Amended Complaint, arguing the MI Plaintiffs’ claims are untimely, as much of the alleged conduct took place well over four years before the action commenced and was thus barred by the four-year statute of limitations for antitrust claims. The MI Defendants also argued that the MI Plaintiffs’ claims are barred because of their participation in previous lawsuits that addressed NIL compensation, all of which have settled. In a separate filing, the MI Defendants moved to transfer venue to the United States District Court for the Southern District of New York (SDNY) to proceed alongside the earlier-filed action Chalmers v. National Collegiate Athletic Association, No. 1:24-cv-05008 (PAE) or, in the alternative, to stay proceedings pending the outcome of Chalmers, which was filed in New York federal court in July, before this case was commenced.

Case Update: Retroactive Compensation for Reggie Bush’s NIL

On September 23, 2024, Reggie Bush filed suit against the University of Southern California (USC), the Pac-12 Conference (Pac-12), and the NCAA (collectively, the CA Defendants), alleging violations of the California Cartwright Act for unreasonable restraints of trade or commerce, a violation of the California Unfair Practices Act, and for unjust enrichment. The CA Defendants have since urged a Los Angeles state court to dismiss the case, arguing that Bush’s claims are time-barred under the Cartwright Act’s four-year statute of limitations, since Bush explicitly alleged that his injuries occurred while he was in college. The NCAA attorneys also argue that the Complaint is “legally insufficient,” with “few facts” beyond Bush’s football career.

Case Update: In re College Athlete NIL Litigation 

As the parties in In re College Athlete NIL Litigation await final court approval for the proposed $2.78 billion settlement for NIL compensation, on December 5, 2024, the National College Players Association, an advocacy group made up of four politicians who are involved in drafting NIL laws in their states, released a statement objecting to the settlement. The lawmakers provided that their states’ NIL laws shared several common clauses that conflict with the terms of the House v. NCAA settlement – including “(complying) with or enforcing any conference or NCAA rules that restrict or prohibit NIL compensation paid by athletic boosters and NIL collectives to athletes and rules that otherwise do not comply with our state’s NIL law.” They also emphasized that because their states were not party to the NIL class action, “the settlement does not affect our states’ ability to enforce our NIL laws.” However, just six days later, the lawmakers retracted their statement, admitting that the settlement “has not been deemed illegal in any way.”

On December 20, 2024, the parties jointly filed a supplemental brief addressing the court’s Tentative Ruling on their Joint Motion for Approval of Additional Settlement Class Communications. The parties had agreed to a revised question-and-answer document that can be published. This document was necessitated by the number of prospective student athletes who have “frequently approached NCAA member institutions with clarifying questions about the settlement.” The parties have requested that the court approve a standardized communication that can be provided to prospective and current student athletes. Objectors to the settlement filed opposition to the proposed standardized communication, claiming that one of the items in the question-and-answer document was incorrect and needed to be corrected, insofar as the objectors claim that: 

“Question No. 4 misleadingly implies that schools’ discretion is currently bound by set roster sizes under NCAA rules. It is not. The Amended Settlement imposes those boundaries. This incomplete Q&A ‘will surely result in confusion’ among potential Class Members and must be corrected.”

The objectors believe even posing the question “Is a student athlete’s roster spot guaranteed?” is itself misleading and have submitted that the proposed Q&A omits the most important information about how the Amended Settlement changes the state of play for countess student athletes.

On December 23, 2024, the court granted the Joint Motion for Approval of the Additional Settlement Class Communication, which permits the publishing of the revised Q&A.

The final settlement approval hearing for In re College Athlete NIL Litigation is scheduled for April 7, 2025. 

On December 17, 2024, counsel in the instant three consolidated cases (House v. NCAA, Hubbard v. NCAA, and Carter v. NCAA) filed a motion requesting Judge Wilken to approve more than $500 million in attorneys’ fees and costs, to be paid over 10 years – the same time frame that NIL money and shared revenues are to be paid out to athletes going forward. Counsel noted that their request of 20 percent of the settlement funds in the House and Hubbard cases was reasonable in relation to the work involved, and also below the generally accepted market rate of 25 percent.

Case Update: Terrelle Pryor’s NIL Suit

Following former Ohio State football player Terrelle Pryor’s complaint filed on October 4, 2024, the NCAA, Learfield Communications LLC, The Ohio State University, and The Big Ten Conference, Inc. (the OH Defendants) filed motions to dismiss on January 3, 2025. In a joint motion, the OH Defendants argued that Pryor’s claims are time-barred because he left college football at least 14 years ago, which is outside the Clayton Act’s four-year statute of limitations for federal antitrust claims. Further, the OH Defendants argued Pryor’s claims are barred by his alleged participation in the Alston and Keller settlement releases and the O’Bannon judgment. Additionally, the OH Defendants argued that Pryor has not plausibly pleaded an injury since he has “nonexistent rights,” “no copyright interests in games in which he played,” and “no cognizable right of publicity in rebroadcasts of NCAA game footage.” In the joint motion, the OH Defendants also requested oral arguments.

Individually, The Ohio State University filed a motion to dismiss for lack of subject-matter jurisdiction, arguing that Eleventh Amendment “sovereign immunity bars the Plaintiff’s claims against Ohio State” since “Ohio State is a public university and instrumentality of the State of Ohio, and Plaintiff is a citizen and resident of Pennsylvania.” Similarly, Learfield Communications filed its own motion to dismiss, citing immunity under both the state action doctrine and the Noerr-Pennington doctrine.

New Case: South Dakota NIL Lawsuit

While the In re College Athlete NIL Litigation settlement was pending preliminary approval before District Court Judge Wilken, on September 9, 2024, by and through the South Dakota attorney general, Marty Jackley, the State of South Dakota, and the South Dakota Board of Regents on behalf of South Dakota State University and the University of South Dakota (collectively, SD Plaintiffs) filed The State of South Dakota et al. v. National Collegiate Athletic Association 4:24-cv-04189 in Brookings County Circuit Court in South Dakota. The University of South Dakota and South Dakota State University are members of the Summit League Basketball Conference, which is a non–Power Four conference member of the NCAA. 

The complaint claimed that the $2.78 billion proposed settlement would go primarily to student athletes from the “Power Four” conferences – the Atlantic Coast Conference, Big Ten Conference, Big 12 Conference, and Southeastern Conference – leaving smaller schools such as those in South Dakota to face an unfair burden of the settlement’s cost. Jackley argued that such smaller schools would have to collectively shell out roughly $960 million in NCAA distributions over the next 10 years to assist the deal – noting that less than 10 percent of the proceeds have been saved for female student athletes. Further, Jackley argued the proposed settlement would unlawfully rid the NCAA of its guiding principle of amateurism. In their prayer for relief, the SD Plaintiffs seek damages, declaratory relief, and injunctive relief.

On October 9, 2024, the NCAA filed its Notice of Removal under federal-question jurisdiction. The SD Plaintiffs subsequently argued for remand to state court, arguing that “the California court has already ruled that there is no common question of law or fact between the settlement approval and the NCAA’s allocation model under its rules, bylaws or constitution.” In response, the NCAA argued the SD Plaintiffs voluntarily chose to participate in the NCAA, and “a lawsuit seeking to undo a federal court’s preliminary approval of a settlement of claims under federal law plainly belongs in federal court.” 

Further, the NCAA argued that Count 6 of the Complaint raises a federal issue, “namely whether the settlement meets the requirements imposed by Fed. R. Civ. P. 23 for judicial approval of the settlement.” Thereafter, on November 15, 2024, SD Plaintiffs filed their Amended Complaint, removing Claim 6. On November 18, 2024, SD Plaintiffs filed their Reply Brief in Support of Motion for Remand, arguing that “Claim 6 was the only ‘federal question’ the NCAA identified in its response brief.”

On November 13, 2024, SD Plaintiffs filed a motion to compel defendants to provide notice to South Dakota, and other affected states and their institutions of higher education, under 28 U.S.C. section 1715(b), since the “NCAA’s notice facially fails to comply” with the two requirements under the statute. The State of South Dakota contacted the NCAA’s counsel on October 17, 2024, stating that the notice was deficient; the NCAA did not respond within the 10-day period provided by the State of South Dakota.

On January 15, 2025, the SD Plaintiffs filed a Notice of Decision Re: Motions for Remand and Stay. In the notice, the SD Plaintiffs asked the court to take notice of the decision in Royal Canin, Inc. v. Wullschleger, 23-677 (U.S.), wherein the court “unanimously held that when an action is properly removed to federal court on the basis of federal-question jurisdiction, but the plaintiff then amends the complaint to omit the federal questions leaving only supplemental state-law claims, ‘the federal court loses its supplemental jurisdiction over the related state-law claims [and] [t]he case must therefore return to state court.’”

Additional NIL Updates: New Legislation

In other NIL news, on November 18, 2024, Ohio Governor Mike DeWine signed Executive Order 2024-08D, effective immediately, allowing Ohio colleges to pay student athletes for their NIL. The law provides that any post-secondary educational institution may offer compensation or compensate a student for the use of the student athlete’s NIL provided that no post-secondary education shall use funds allocated by the State of Ohio. The executive order will expire if the settlement comes into “full operational effect.” Despite this Order, Ohio State continues to be at the top of the list of schools benefitting from NIL deals, reportedly spending “around $20 million to keep their 2024–2025 football team intact.”

Conclusion

This is a highly active time for college athlete compensation, and the impact it will have on the industry is still unknown. College sports is already showing signs that the availability of this money has reshaped recruiting dynamics, as schools and boosters are using NIL deals to entice high school athletes and transfer students. A survey conducted by the National College Players Association reported that nearly 75 percent of athletes consider NIL opportunities an important factor when choosing a school. The competition on the field is now met by competition off the field in trying to attract the top talent.

As these competitions increase, universities must contend with the litigation from prior athletes and there does not seem to be any signs that this will be slowing anytime soon. Whether legislation will help is also undetermined at this time. In the interim, it appears that the current top student athletes are benefitting from the new availability of money, and prior standouts are interested in their own gain.