SCOTUS Agrees to Hear NCAA Athlete Compensation Case

Alston v. NCAA: Athlete Scholarships Fight may go to Supreme Court
Photo Credit: unafraidshow.com

On December 16, 2020, the Supreme Court announced that it will hear an appeal from the NCAA and eleven of its top-level conferences in a case that challenges the Association’s restriction on student-athlete compensation. In 2021, the high court will decide whether the NCAA’s rules which limit athlete compensation to scholarships is a violation of federal anti-trust law.

The decision to hear the Alston case comes after a three-judge panel of the 9th U.S. Circuit Court of Appeals upheld a lower court ruling which barred the NCAA from capping education-related compensation and benefits for student-athletes in Division I football and basketball programs. The case was brought by Shawne Alston, a former West Virginia football player, and others. The 9th Circuit found an antitrust violation, but nevertheless provided a narrow ruling, which required compensation to athletes to be “tethered to education,” and left both sides claiming victory.

If the Supreme Court affirms the lower courts’ rulings and the NCAA continues to be found in violation of antitrust law, it would lose its ability to determine, on a nationwide basis, the rules about the types and amounts of education-related benefits schools can give athletes. At this point in time, the lower courts have left intact the NCAA’s ability to set limits on compensation not connected to education. Nevertheless, as sports law attorney Dan Lust said, the NCAA risks the Supreme Court saying that the lower courts did not go far enough in removing its compensation caps and that there should be a “true free market” in collegiate athletics.

In response to the dozens of name, image, and likeness (NIL) state statutes and proposed Congressional bills, the NCAA unveiled a set of rules changes concerning athletes’ ability to make money from their NIL. Those changes are set for a vote in January. The justices’ decision to take the case adds a momentous element of uncertainty to an enterprise that has been shaken by these legislative efforts concerning not only athletes’ ability to make money from their NILs, but also the fairness of their overall treatment by the schools for which they help generate billions of dollars annually.

Amateurism and antitrust has not been before the Supreme Court for more than three decades. The last time was in 1984, NCAA v. Board of Regents, where the Supreme Court held that the NCAA deserves enormous protection under antitrust law because it “plays a critical role in the maintenance of a revered tradition of amateurism in college sports.” 468 U.S. 85, 120 (1984). Board of Regents gave the NCAA preferential treatment in applying the rule of reason, rather than the stricter per se analysis to restrictions that would otherwise fall into that category. The “dicta,” or legal commentary that does not constitute binding principle, essentially gave the NCAA broad impunity from antitrust challenges to its model of amateurism and unlimited power to make any and all rules, so long as they are consistent with preserving (the inexplicit definition of) amateurism. The exemption from antitrust scrutiny has only seriously been challenged by O’Bannon v. NCAA, and now, Alston.

Over the years, the NCAA has taken advantage of the broad sweeping language in Board of Regents and contends that antitrust allows them to impose certain restrictions — including those on student-athlete compensation — in an effort to promote relative competitive equity and to have a product for fans that is distinct from professional sports. Yet, we’ve reached a point where the the line between amateur and professional sports — at least in Division I basketball and FBS football — is long past blurred. UConn football head coach, Randy Edsall, said in an interview with ESPN, “[i]t ain’t a student anymore. It’s just athlete.”

Joe Schafer (’18) wrote since Board of Regents, the NCAA has created a multi-billion dollar amateur sports empire at the expense of a free labor force, while relishing its position as the last bastion of amateur athletics in the United States. First, in any other industry, this would be viewed as exploitation of workers. But here, because these individuals are “student-athletes,” exploitation — and collusion to do so — is permitted with no questions asked. Second, the NCAA has been so focused on following its amateurism principles and maintaining the distinction between amateur and professional athletes that it failed to see what was happening right under its nose. The NCAA no longer follows its own principles, therefore, it no longer deserves the protection of antitrust law.

The justices’ decision to hear this case comes at a time where the NCAA and the collegiate model as we know it is at its breaking point. Perhaps the Supreme Court finally recognized like myself, Joe Schafer, and many others that federal laws do not need to change. NCAA rules need to change and if it won’t amend its own rules, court intervention is necessary. As Jeffrey Kessler, lead attorney for the plaintiffs, said: “It is time for the Supreme Court to reaffirm that the big multi-billion dollar businesses of Division I basketball and FBS football are fully subject to antitrust review and that the era of exploiting the athletes who provide the labor in these businesses must come to an end.”

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