Tennessee ‘Athlete-Friendly’ NIL Law Takes Shot at House Settlement

Tennessee lawmakers signed an NIL law that will shield schools from adverse actions by the NCAA in the event the House settlement fails.

Caitie McMekin/News Sentinel / USA TODAY NETWORK via Imagn Images

Earlier this month, Tennessee signed Senate Bill 536 into law, giving major protection to college sports programs in the state as they traverse the new, chaotic NIL landscape.

As college football and basketball programs in Tennessee strategize for the future amid the absence of federal NIL legislation or final approval on the House settlement, they can do so without fear of the NCAA.

In what's considered one of the most "athlete-friendly" NIL laws in the country, as On3 Sports reports, the law will protect schools from antitrust lawsuits while taking some shots at the terms within the settlement.

Tennessee Protects College Sports From Murky NIL Future

Under S.B. 356, which went into effect May 1, athletes in Tennessee will be able to receive compensation from NIL collectives until explicitly told otherwise by federal law, antitrust law, or a valid court order.

The NCAA cannot “create anticompetitive restrictions that lessen, or tend to lessen, full and free competition in trade or commerce affecting this State or to otherwise violate state and federal law.”

In addition, the NCAA shall not “establish, adopt, promulgate, implement, or enforce any rule, standard, procedure, policy, or guideline that violates an applicable state or federal antitrust law,” and it should make sure it’s “legally exempt from applicable antitrust laws” before doing so.

It shields Tennessee schools from legal issues arising over any alleged violations, as the NCAA "shall fully indemnify and hold harmless the state, its institutions, and intercollegiate athletes from any damages, losses, claims, or remedies of any kind arising from its noncompliance or failure under such applicable law."

It also provides protections for grant-in-aid and athletic eligibility that may arise from any disputes.

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

While the date for final approval of the House settlement is July 1, there's growing skepticism that it will curtail all the problems within the college sports landscape.

By shifting liability to the NCAA, Tennessee lawmakers are allowing in-state schools to work toward that assumed future without fear of facing legal repercussions.

They aren't the only state to enact protections, with Louisiana recently joining the charge with an executive order granting schools the ability to directly pay athletes for NIL.

However, Tennessee might offer the strongest shield, as reported by Adam Sparks of the Knoxville News Sentinel (subscription required) based on analysis by NIL expert and sports attorney Mit Winter.

“This Tennessee law goes further than the others because it was specifically drafted in a way that says schools in the state of Tennessee and their athletes don’t have to adhere to any restrictions on NIL compensation, except in certain limited circumstances,” Winter said.

Now, unlike some universities that may have concerns, those in Tennessee can operate without worrying about becoming defendants.

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