By ERIC OLSON<\/p>\n
Without federal legislation codifying rules on athlete compensation and eligibility or an entirely new structure, there is likely no end in sight for the stream of lawsuits being filed by schools and athletes looking out for their interests in college athletics.<\/p>\n
Duke<\/a> and Cincinnati<\/a> have filed lawsuits demanding their quarterbacks pay damages for allegedly breaching revenue-sharing contracts when they entered the transfer portal. Washington<\/a> made the same argument and threatened legal action against its quarterback before he acquiesced and returned to the Huskies.<\/p>\n A parade of athletes, starting with Vanderbilt quarterback Diego Pavia<\/a> in 2024 and continuing with Virginia\u2019s Chandler Morris<\/a> this week, have filed lawsuits challenging eligibility rules and seeking to extend the number of years they can compete \u2014 and earn money \u2014 in college.<\/p>\n University of Illinois labor and sports law professor Michael LeRoy recalled this week that the House vs. NCAA settlement,<\/a> which allowed schools to directly pay athletes, was hailed by college sports leaders<\/a> as the beginning of an era of stability.<\/p>\n \u201cThat,\u201d LeRoy said, \u201chas been a spectacular miscalculation.\u201d<\/p>\n How we got here<\/p>\n In 2021, when college athletes began getting paid<\/a> by third parties for use of their name, image and likeness, the thought was that most deals would give athletes a little pocket money. No one could foresee the life-changing money available to top athletes in 2026 through revenue sharing and NIL deals.<\/p>\n The rationale for athletes wanting to stay in school is to extend their window for making money, and the opportunity to make more money is the reason athletes walk away from rev-share contracts with their schools.<\/p>\n What\u2019s a signature worth?<\/p>\n It would seem straightforward that if an athlete signed a rev-share contract requiring them to pay liquidated damages if they leave the school before the end of the contract, that provision would be enforceable.<\/p>\n It\u2019s not that simple.<\/p>\n \u201cAs a general matter of contract law, liquidated damages are typically enforced to the extent they are considered a good-faith effort to estimate a loss to one of the parties in case of a breach. They are not supposed to be punitive in nature,\u201d said Andrew Hope, a Philadelphia attorney who specializes in contract law and works with schools on NIL matters.<\/p>\n Revenue-sharing contracts pay athletes for their NIL rights, not athletic performance. Hope said athletes argue liquidated damages provisions don\u2019t accurately reflect a loss in the value of their NIL to the school simply because they transferred or are seeking a transfer. The chools, of course, argue otherwise.<\/p>\n Negotiated settlements <\/p>\n Duke filed a lawsuit seeking to block quarterback Darian Mensah<\/a> from transferring and reaching a contract with another school, and a negotiated settlement was announced a week later. Cincinnati filed a lawsuit against quarterback Brandon Sorsby<\/a> demanding he pay $1 million in damages for not fulfilling the second year of his two-year contract. He transferred to Texas Tech. <\/p>\n Sports attorney Mit Winter, based in Kansas City, Missouri, predicted most of the contract disputes will end up with negotiated settlements. He said neither the school nor athlete will want to go through the time and expense of a court battle.<\/p>\n Hope noted that in a traditional employee contract, a non-compete clause would force the athlete to pay damages.<\/p>\n \u201cBut you can\u2019t have that,\u201d he said, \u201cbecause these students aren\u2019t employees.\u201d<\/p>\n How to resolve eligibility cases<\/p>\n The way Winter sees it, one of three things must happen to stop the lawsuits seeking eligibility beyond the traditional four-seasons-over-five years window.<\/p>\n One would be a federal law giving the NCAA an antitrust exemption. The eligibility lawsuits argue the NCAA is limiting economic opportunities by placing a limit on how long someone can make money as a college athlete. The SCORE Act<\/a> in Congress would provide the antitrust exemption, but the bill\u2019s future is in doubt.<\/p>\n Winter said the U.S. Supreme Court could uphold the NCAA\u2019s eligibility rules. It should be noted, though, that the high court ruled 9-0 against the NCAA in 2021 in the NCAA vs. Alston case. Justice Brett Kavanaugh famously wrote the NCAA\u2019s rules probably would no longer hold up well<\/a> in future antitrust challenges and added, \u201cThe NCAA\u2019s business model would be flatly illegal in almost any other industry in America.\u201d<\/p>\n LeRoy said the NCAA\u2019s case for an antitrust exemption is further weakened by the emergence of private equity firms\u2019 interest in college athletics.<\/a><\/p>\n \u201cThe eligibility disputes really come down to: Do you characterize the market for college players as people seeking a degree while concurrently playing a sport? That\u2019s the NCAA\u2019s view,\u201d LeRoy said. \u201cBut courts more often than not accept the players\u2019 characterization that it\u2019s a market for athletic services, it\u2019s commercial in nature. If a court uses the word \u2018commercial,\u2019 it\u2019s over for the school and the NCAA.\u201d<\/p>\n Winter said the third solution would be for eligibility rules to be collectively bargained, which would require athletes to be considered employees and unionized. <\/p>\n What about employee status?<\/p>\n Winter predicted football and men\u2019s and women\u2019s basketball players in the Power Four conferences eventually will be considered employees.<\/p>\n \u201cThere are more and more people in college athletics who are getting behind an idea like that \u2014 some athletic directors<\/a> and for sure some coaches,\u201d he said. \u201cThe NCAA itself is still opposed to it. It\u2019s always possible the schools break off from the NCAA and do their own thing.\u201d<\/p>\n