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Strong words, and the last sentence in a compelling concurring opinion written by Justice Kavanaugh in a watershed unanimous Supreme Court decision issued earlier today, NCAA v. Alston. This long-awaited decision begins a new era for collegiate athletics. What remains to be seen, however, is what that new landscape will look like.
The Alston decision caps several years of upheaval and litigation during which the NCAA’s all-encompassing control over student-athletes faced unprecedented challenge. The first crack appeared in 2014, when Ed O’Bannon successfully sued the NCAA over its restriction upon student-athletes’ ability to receive compensation for their name, image and likeness (NIL), ultimately resulting in the removal of NCAA restrictions upon scholarships up to the full cost of attendance at institutions. Notably, the Supreme Court declined certiorari.
In 2015, Kain Colter rallied his Northwestern football teammates in an attempt to unionize. While this bid was ultimately unsuccessful, it raised the profile of NCAA student-athlete restrictions and publicized the growing concern that a very lucrative enterprise was not treating its “employees” fairly. The spectre of college athletes toiling as much as 60 hours per week at a highly ranked academic institution seemed to fly in the face of the NCAA’s amateurism model.
The Alston decision, filed in the same California federal district court which heard the O’Bannon case, has been percolating through the court system for several years. Meanwhile, California became the first state in the nation to pass the Fair Pay to Play Act in 2019. Currently, five states (Alabama, Arizona, Florida, Georgia, Mississippi, New Mexico and Texas) have NIL laws which take effect on July 1st. Just two weeks ago, NCAA officials testified before a Congressional subcommittee, advocating for a national NIL bill that would help prevent what is sure to be a wild, wild West scenario as individual states move forward with their own varied legislation in this area. This, after the NCAA declined to take action during its January meetings to confront an issue largely of its own making.
So – what is at stake? And how/why did we get here? Ironically, the two entities most responsible for the current state of affairs are the NCAA itself and – SCOTUS. In 1984, the NCAA was on the wrong end of another Supreme Court decision, NCAA v. Board of Regents of Univ. of Oklahoma. In that case, NCAA restrictions upon institutions’ ability to individually sell television broadcast opportunities to networks was struck down as a violation of the anti-trust laws. Significantly, however, the NCAA focused upon what the majority opinion in Alston now deems “stray comments” in that opinion:
“The NCAA plays a critical role in the maintenance of a revered tradition of amateurism in college sports. There can be no question but that it needs ample latitude to play that role, or that the preservation of the student-athlete in higher education adds richness and diversity to intercollegiate athletics and is entirely consistent with the goals of the Sherman Act.“
The NCAA ultimately relied almost entirely upon this language to justify what it claimed should be a “quick look”, or preferential treatment under The Sherman Act for essentially all of its student-athlete compensation rules. Meanwhile, as we all know, and as acknowledged by Justice Gorsuch’s majority opinion, A LOT has changed since 1984. The NCAA moved forward, building out an incredibly lucrative business model based upon amateur (read: unpaid) talent which denied student-athletes virtually any ability to capitalize upon their athletic talent in real time. Meanwhile, NCAA revenues rose exponentially, from $922 million for D1 football and $41 million for D1 basketball in 1985 to $13.5 BILLION by 2016. The March Madness television revenue alone increased from $16 million per year between 1982-1984 to $1.1 billion by 2016. Clearly, the market has changed dramatically. And, as noted by the Supreme Court, the student-athlete restrictions are not imposed in a vacuum, but in the real world where NCAA market dominance as THE only place players can market their labor cannot be overlooked, nor given a pass under the anti-trust laws.
While there had been hints during oral argument that SCOTUS was not especially impressed with the NCAA’s position in this case, it was still a bit of a surprise that the opinion was unanimous. Justice Kavanaugh’s concurrence was simply stunning. He made it very clear that while the issue of whether student-athletes should be directly compensated for performance was not on the table (the issue before the Court was limited to rules restricting education-related benefits), he thinks they violate The Sherman Act. Justice Kavanaugh acknowledges the tradition of football Saturdays, while warning:
“But those traditions alone cannot justify the NCAA’s decision to build a massive money-raising enterprise on the backs of student athletes who are not fairly compensated. Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate. And under ordinary principles of antitrust law, it is not evident why college sports should be any different. THE NCAA IS NOT ABOVE THE LAW.” (Emphasis added.)
Given the potential ramifications of Justice Kavanaugh’s concurrence, it is clear that the very structure of the NCAA is now in peril. July 1st is approaching. So far, Congress has not moved forward on any of the proposals to address the NIL issue and/or the more comprehensive proposal advocated by Senator Corey Booker, who seeks guaranteed educational benefits, extended health care and more for student-athletes. But this much IS evident: the collegiate sports industry in the US is on the verge of unprecedented change. Hold on for the ride.