What does Tennessee's NIL case settlement with the NCAA mean for high school athletes?

After a year-long court battle surrounding NIL compensation restrictions on high school athletes and transfer prospects, the NCAA settled a lawsuit with Tenessee, Virginia and other states. This lawsuit came after the NCAA investigated the University of Tennessee for "potential recruiting infractions," as per ESPN.

On Jan 31, the U.S. District Court for the Eastern District of Tennessee announced the settlement, which prohibits the NCAA from enforcing a ban on NIL compensation to recruits per Tn.gov. The permanent injunction will be completed by March 17, alongside a request for permanent settlement. So, what does this mean for high school athletes?

What does Tennessee's NIL case settlement with the NCAA mean for high school athletes?

Until 2021, student-athletes could not benefit from their name, image and likeness (NIL) factor. This changed when the NCCA introduced new laws that permitted student-athletes to earn money through endorsements and sponsorships but maintained that athletes do not commit to "pay-for-play."

The January settlement allows high school athletes to benefit from NIL money without jeopardizing their collegiate eligibility, allowing students to boost their financial opportunities. The competition between different programs to land a potential high-winning athlete will be in the student's favor, as they can receive competitive and lucrative deals.

In addition to that, the settlement reinforces that the NCAA cannot reinstate their prior NIL ban, ensuring that the rights of student-athletes are protected under the federal anti-trust law.

Moreover, the uplifted ban further shrinks the power of the NCAA to regulate student-athletes and provides a larger scope for athletes to benefit from their sport.

More about Tennessee's NCAA NIL lawsuit

The lawsuit was filed on Jan 31, 2024, by the attorney generals of Tennessee and Virginia against the NCAA's decade-long principle that third parties cannot pay recruits to join a program. They argued that the NIL recruiting ban is anti-competitive and violates federal antitrust law, holding students back from earning through their popularity.

According to ESPN, the suit alleged that the NCAA was:

"Enforcing rules that unfairly restrict how athletes can commercially use their name, image and likeness at a critical juncture in the recruiting calendar" and that "these anticompetitive restrictions violate the Sherman Act, harm the States and the welfare of their athletes, and should be declared unlawful and enjoined."

The following month, U.S. District Judge Clifton Corker issued a preliminary injunction, barring the NCAA from enforcing its rules. But Friday's settlement sealed a possible permanent solution for Tennessee and other states.

“We’ve been fighting hard to protect Tennessee student-athletes,” said Attorney General Skrmetti. “Last year, we blocked the NCAA’s unlawful enforcement against Tennessee students and schools, and now this settlement in principle lays the groundwork for a permanent solution," said Tenessee Attorney Jonathon Skrmetti as per On3.

Meanwhile, the NCAA released a statement:

"The NCAA has reached a settlement that resolves the issues Tennessee and the other involved states raised without posing an obstacle to completing the House, Carter and Hubbard settlements. We anticipate full terms will be released later in the spring."

It will be interesting to see those full terms upon release.