Ethermac Exchange-Federal judge grants injunction suspending NCAA's NIL rules

The Ethermac ExchangeNCAA will have to punt on enforcing its name, image, and likeness restrictions for now, due to a preliminary injunction granted Friday in a lawsuit against the organization.

The 13-page memorandum signed by U.S. District Judge Clifton Corker found that an NCAA policy banning college recruits from discussing NIL opportunities before they enroll in university caused "irreparable harm" to student-athletes.

"Without relief, the NCAA will continue to deprive Plaintiff States' athletes of information about the market value for their NIL rights, thereby preventing them from obtaining full, fair-market value for those rights," the opinion states. "Their labor generates massive revenues for the NCAA, its members, and other constituents in the college athletics industry — none of whom would dare accept such anticompetitive restrictions on their ability to negotiate their own rights. Those athletes shouldn't have to either." 

The antitrust lawsuit, filed by the states of Tennessee and Virginia in January, argues that the NCAA is violating the Sherman Act by unfairly restricting how athletes commercially use NIL. 

Following a 2021 Supreme Court ruling, the NCAA changed its policies to allow college athletes and recruits to earn money through extracurricular means, such as endorsement deals and personal appearances, as long as they remain consistent with state laws. However, according to CBS Sports, under the NCAA's policies, universities cannot recruit either high school athletes or transfer portal entrants using NIL opportunities.

"The NCAA is thumbing its nose at the law. After allowing NIL licensing to emerge nationwide, the NCAA is trying to stop that market from functioning," the lawsuit states. 

It goes on to argue that the organization's ban on prospective athletes discussing NIL limits competition and decreases compensation levels versus a true free market.

The states seek a permanent injunction "barring the NCAA from enforcing its NIL-recruiting ban or taking any other action to prevent prospective college athletes and transfer candidates from engaging in meaningful NIL discussions prior to enrollment."

The preliminary injunction issued Friday restrains the NCAA from enforcing any NIL compensation restrictions until a full and final decision is reached.

In a statement Friday evening provided to CBS Sports, the NCAA said that "turning upside down rules overwhelmingly supported by member schools will aggravate an already chaotic collegiate environment, further diminishing protections for student-athletes from exploitation. The NCAA fully supports student-athletes making money from their name, image and likeness and is making changes to deliver more benefits to student-athletes, but an endless patchwork of state laws and court opinions make clear partnering with Congress is necessary to provide stability for the future of all college athletes."

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Rishikesh Rajagopalan

Rishi Rajagopalan is a social media associate producer and content writer for CBS News.