Tennessee lawmakers have shocked the college sports world with a new law that could have a massive impact on NIL deals in the “Volunteer State.”
The law, introduced by the state, prohibits the NCAA from penalizing school athletes for NIL deals and shields schools from antitrust lawsuits, a common roadblock in today’s landscape.
New Tennessee Law Targets NCAA’s House Settlement Terms, Shields Schools From Antitrust Lawsuits
According to Tennessee’s New NIL Law (S.B. 536), the NCAA is prohibited from enforcing any rule, standard, or policy that restricts NIL compensation in a way that would violate state or federal antitrust law.
Tennessee now has the most athlete friendly NIL law.
It appears to prohibit all of the House settlement’s limits on NIL comp (salary cap, collective restrictions, etc.) unless they’re part of a federal law, valid court order, or determined to be exempt from antitrust law. pic.twitter.com/7o0QTQBGMi
— Mit Winter (@WinterSportsLaw) May 16, 2025
This means that if the House settlement suggests limiting NIL pay, such as a salary cap, those restrictions would only be valid if established by federal law, a valid court order, or proven exempt from antitrust law.
The law protects all Tennessee schools, athletes, and state agencies from being punished for alleged NCAA rule violations. The NCAA is required to indemnify Tennessee schools and athletes against any damages, losses, or claims that result from noncompliance with the law.
The law also allows Tennessee schools and their athletes to engage in NIL activities with collectives and third parties unless explicitly prohibited by federal law or court order. Because of this, schools might step in to help students directly organize athlete endorsement deals, which would conflict with the NCAA’s usual practices.
What’s At Stake for College Sports?
The passage of Tennessee’s NIL law could have far-reaching consequences. Other states may introduce their own laws to prevent schools within their borders from being affected by NCAA rules.
If this trend continues, the NCAA may have to modify its NIL policies or risk losing control over college athletics.
Additionally, the law raises questions about the future of antitrust litigation in college sports. The exemption from lawsuits given to schools in Tennessee could affect the outcome of other lawsuits nationwide.
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With its new NIL law, Tennessee is effectively challenging the NCAA and opening up more NIL options for student-athletes.
The aftermath of the rush into NIL in Tennessee could reshape the guidelines for NIL and create a new era in college sports.
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