Title IX’s Presence in the Player Compensation Era

As part of the Educational Amendments Act of 1972 to the 1964 Civil Rights Act, Congress enacted Title IX 20 U.S.C. § 1681 (“Title IX”).[1] More specifically, Title IX was enacted to redress past discrimination in athletics and to protect people from discrimination based on sex in education programs or activities that received financial assistance. Id. For example, the statute states:

“No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance.”[2]

Initially, Title IX only applied to financial aid departments at higher education institutions because financial aid departments were direct recipients of federal financial assistance. By contrast, athletic departments were not initially bound to Title IX requirements because they did not receive direct federal financial assistance. However, in 1987, Congress adopted an institution-wide approach under the Civil Rights Restoration Act. As a result, if any part of an institution received federal funding then all of the institution and its programs were subject to Title IX. Under this institution-wide approach, now athletic departments were subject to Title IX regulations. The recent developments of college player compensation may likely impact the way institutions interpret their responsibilities under Title IX compliance.

Player Compensation Era and Sharing of Revenue

Since its inception, the National Collegiate Athletic Association (“NCAA”) has existed based on an enforcement model with the goal of protecting amateurism. In order to “protect amateurism” in college sports, the NCAA was awarded judicial deference in their enforcement of their rules and regulations in 1984.[3] Included amongst the vast and dense regulations of the NCAA was Article 12 which prohibited student-athletes from using their athletic-related skills to earn any type of financial compensation.[4] Students that did not abide to Article 12, by collecting compensation for their athletic-related skills, were stripped of their “amateur status” and prohibited from competing in the NCAA. However, the overall enforcement model of the NCAA took an incredible hit in the summer of 2021 following the Supreme Court’s decision in NCAA v. Alston. The Supreme Court’s decision in NCAA v. Alston, opened the door to a new model: Player Compensation. Under a player compensation model, conferences and their college athletic departments may soon be finding themselves at a crossroads with respect to Title IX compliance.

NCAA v. Alston

Background

In 2019, current and former college athletes brought an antitrust lawsuit against the NCAA and 11 of its Division I conferences.[5] The athletes alleged that Article 12 of the NCAA’s rules violate § 1 of the Sherman Act, which prohibits “contract[s], combination[s], or conspirac[ies] in restraint of trade or commerce.”[6] Specifically, it was alleged that the NCAA and its member institutions agreed to compensation limits for its athletes and that the NCAA enforces these limitations on its members schools.[7] Overall, the athletes alleged, that the these compensation limits affected interstate commerce. Id.

Procedural History

Following a bench trail at the Northern District of California, the District Court found that the NCAA’s rules limiting the education-related benefits were unlawful and that the institution members of the NCAA may make such benefits available to its athletes. Id. On appeal at the Ninth (9^th) Circuit, the Circuit Court affirmed the lower court’s entire decision, including, that the NCAA’s limits on education-related benefits were unlawful. Id. Unwilling to accept this decision, the NCAA filed a writ of certiorari to the Supreme Court asking that the Court find all of its restraints on athlete compensation to be lawful Id. The Supreme Court granted the NCAA’s writ of certiorari. Id.

Supreme Court’s Decision

The majority ultimately agreed with the District Court’s application of the rule of reason analysis to the circumstances of the case. Id. Thus, the Supreme Court upheld the District Court’s finding that the NCAA’s rules restricting academic-related benefits failed to pass antitrust scrutiny, and were therefore unenforceable. Id.

Justice Kavanaugh’s Concurrence

Where the Majority’s opinion rest only on the NCAA rules restricting academic-related benefits, Justice Kavanaugh’s concurrence truly laid the foundation for the current state of college athlete compensation. Id. Specifically, Justice Kavanaugh took the majority’s decision and expressed his belief that the NCAA would lack justification for any of the NCAA’s remaining compensation rules. Id. Justice Kavanaugh accentuated his concurrence with:

“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 different. The NCAA is not above the law.” Id.

Current State of Player Compensation

Justice Kavanaugh’s concurrence clearly expands the Majority’s holding to challenge the legal validity of the NCAA’s compensation restrictions. In doing so, Justice Kavanaugh also challenges whether and how the NCAA, with its member institutions, can justify not paying student athletes a fair share of the revenues at all. This sharing of the revenues, of course, would undoubtedly lead to practical issues. One practical issue that Justice Kavanaugh mentions is: “[h]ow would any compensation regime comply with Title IX?”^[8] For now, most of the NCAA member institutions are attempting to interpret the meaning of Alston, and are hoping for guidance from the NCAA. Unfortunately, the NCAA has kept a relatively far distance from implementing any rules or regulations that limit player compensation. However, its members have interpreted their roles a bit differently.

Institution’s Cutting Checks to their Current College Athletes (Academic Incentives)

One of the injunctions set by the District Court in NCAA v. Alston, and subsequently upheld by the Supreme Court, was that the NCAA could not limit institutions from awarding Division I football and basketball players education-related compensation.[9] The NCAA was instructed, however, that they may limit cash awards for academic achievements no lower than $5,980 per year.[10] Further, the District Court was clear that the injunction only applied to the NCAA and multi-conference agreements, thus allowing individual conferences to impose tighter restrictions if they so wish. Id. Nonetheless, following the Alston decision, the Southeastern Conference (“SEC”)^[11] and Big 12^[12], and not the NCAA, implemented conference specific caps for academic-related benefits to $5,980.

The University of Mississippi (“Ole Miss”’), a member of the SEC, became the first institution to distribute a check to one of its current athletes.^[13] Specifically, Senior long jumper Allen Gordon received a $2,990 check for academic achievements. Id. Further, at that time, Ole Miss planned to implement this payment plan for all athletes who met the academic requirement of the prior semester and who were on an active roster. Id. Ole Miss has planned to spend $2.48 million a year in additional payments for about 415 athletes. Id.

Since Ole Miss became the first institution to provide their athletes academic-related checks, only 23 of the 130 FBS-Level schools have indicated that they have plans to provide academic bonus payments to athletes for this academic year.^[14] In early April of 2022, ABC News contacted the 130 FBS-Level institutions to determine whether they had any plans to implement academic-related bonusses for their athletes. Id. Below are the results from the 101 institutions that responded to their survey. Id.

Twenty-two (22) schools said they have plans in place to reward their athletes with payments for good grades this semester.
Thirty-four (34) said they have not yet decided if or when they will start to pay academic bonuses.
Twenty (20) said they will not make bonus payments this year, but plan to make them in the future.
Fifteen (15) said they have no plans to pay academic bonuses.
Ten (10) responded to public records requests by saying they have no relevant documents of a plan to share, or by providing documents that disclosed no information about an existing plan to make academic bonus payments. Id.

Currently, the $5,980 in cash awards for academic-related payment remains the only example of an institution itself issuing cash to its athletes. While this may seem to be permissible under antitrust law, and in-tune with the current player compensation model, the distribution of said monies may reasonably lead to violations of Title IX. For example, with the funds being accumulated due to the revenue generating sports (i.e., Football, Men’s and Women’s Basketball), how long will schools justify distributing cash to athletes participating in non-revenue generating sports, even under academic-related incentives?

Mississippi State Bill

On April 20, 2022, Mississippi Governor Tate Reeves signed into law two changes to the state’s Name, Image, and Likeness law.^[15] First, Junior colleges and institutions in Mississippi can play a more active role in guiding their college athletes through the NIL landscape. Id. Specifically, Senate Bill 2690^[16], now allows institutions to communicate with third parties who seek to work with college athletes.^[17]

“b) A postsecondary educational institution may facilitate opportunities for student-athletes to engage with third parties interested in entering into name, image, and likeness agreements, and may communicate with third parties interested in providing name, image, and likeness agreements to student-athletes.” Senate Bill 2690 Section (3)(b)^[18]

Second, now athletes in the state of Mississippi can enter NIL deals after they verbally commit to a junior college or institution within the state of Mississippi. Id. This change allows for earlier agreement between the college athletes and prospective NIL opportunities, because, previously, athletes in Mississippi had to wait until they officially signed their letter of intent before agreeing to NIL deals. Id.

Title IX Concerns

Institutions in Mississippi now can “facilitate opportunities for student-athletes to engage with third parties interested in entering into name, image, and likeness agreements, and may communicate with third parties interested in providing name, image, and likeness agreements to student-athletes.”^[19] In doing so, institutions should be careful of potential Title IX violations.

Title IX contains specific provisions governing athletic programs.^[20] Specifically, if an institution offers an athletic program, it must provide equal athletic opportunities for male and female participants. Id. Institutions regulate Title IX compliance through Office of Civil Rights (“OCR”). When determining whether equal opportunities are available, OCR considers whether an institution is effectively accommodating the athletic interests of all its participants. Id. Further, OCR will assess their respective athletic departments using the following factors to determine whether male and female athletes are provided with equal benefits, opportunities, and treatment: equipment and supplies; game and practice times; travel and per diem allowances; coaching and academic tutoring; assignment and compensation of coaches and tutors; locker rooms, practice and competitive facilities; medical and training facilities and services; housing and dining facilities and services; and publicity. Id.

In addition, Title IX regulations specify that if an institution provides its students athletic financial assistance (traditionally scholarships), it must provide reasonable opportunities for such awards for members of each sex in substantial proportion to the number of students of each sex participating in intercollegiate athletics. Id.

Currently, OCR’s do not have a standard to assess whether institutions are facilitating equal NIL, or compensation, opportunities to both male and female athletes. Nonetheless, with the NIL landscape continuing to evolve, institutions in Mississippi would likely be safe in implementing programs that facilitate equal opportunities for NIL engagement for both their male and female athletes.

Player Compensation Regulations and Title IX

With respect to player compensation regulation, institutions themselves have to be concerned with Title IX. In 1999, the Supreme Court, in Smith v. NCAA held that although the NCAA receives membership dues from federally funded institutions, that alone is not enough to subject it to Title IX regulation.[21] Therefore, institutions will have to determine how to situate themselves in the player compensation environment while complying to Title IX requirements because no such guidance will come from the NCAA itself.

Furthermore, the current regulations for player compensation have little to no uniformity, and generally speak only to a player’s Name, Image, and Likeness (“NIL”) compensation. For example, following the Supreme Court’s decision in NCAA v. Alston, the NCAA implemented an interim NIL Policy. Under this policy, the NCAA prohibits institutions from inducing prospective athletes with payments of any sorts, including cash payments. However, the policy cedes further regulation to state laws, and for states without NIL laws, institutions themselves. Currently, just over half the states in our country have enacted NIL laws, while the remainder has pending legislation or is completely silent on the issue.[22] Therefore, there does not appear to be much guidance on how an institution can properly implement an academic-related payment program for its athletes.

Implications

It appears that conferences, and their institutions, are implementing these academic-related payment plans based on their interpretation of the holding from NCAA v. Alston. There, the entire case was based upon Division I Football and Basketball academic related benefits. There was no mention of the other sports that compete at these institutions under the NCAA. While Justice Kavanaugh’s concurrence is indeed wide-reaching, he too narrows his opinion to Football and Basketball. How then can schools justify using monies earned from Football and Basketball to distribute to students that don’t play football or basketball? Further, at what point does an “academic-related” benefit no longer become academic. For example, do all passing GPA’s qualify for the same amount of academic benefits? How long will a 4.0 swimmer receive a $2,990 check per semester knowing that a 2.7 football player receives the same amount? Similarly, how do football players and basketball players who may not qualify for a school’s academic program feel knowing they generate the revenue used to provide payment to the 4.0 swimmer (a sport that does not generate money)? Ultimately, if institutions set the threshold, as simply “eligible”, then what would the incentive be to obtain higher GPAs for college athletes. Finally, how does the non-athlete student body feel about college athletes receiving checks each semester for certain performances in the same classes?

Future Impact

Much of this discussion has been about the current implementation of academic-benefits for college athletes. While this has been implemented under an education-umbrella, the fact remains that institutions may continue to provide compensation assistance under the new player compensation era of college athletics. As institutions begin to determine how, and if, they can assist their college athletes in anyway, they must keep Title IX regulations in mind.

In the player compensation era, some have speculated that with the increase in awareness of NIL compensation, institutions may be pressured to provide further assistance. Some examples of institutions aiding may be:

The university trains its men’s basketball team on how to navigate the world of contracts and agents, but does not similarly train any women’s team.
The university allows the football team members to use its trademarked logo in an ad for a sports apparel brand, but not any women’s team members.
The women’s swimming and diving team coach holds meetings with various vendors to feature her team members on their website, but no men’s team coaches hold similar meetings.
The men’s baseball team members are paid by the university’s apparel partner to have jerseys sold with their names on the back, but no female athletes are offered similar deals.[23]

Each of these hypotheticals are examples of how institutions may feel inclined to assist their college athletes. Nonetheless, as institutions begin to understand their position in the player compensation environment, institutions, administrators, compliance officers, employees, boosters, athletes, and supporters must keep in mind the requirements of Title IX.

[1] https://www2.ed.gov/about/offices/list/ocr/docs/tix_dis.html#:~:text=Title%20IX%20states%3A,activity%20receiving%20Federal%20financial%20assistance.

[2] 20 U.S.C. § 1681(a)

[3] See NCAA v. Board of Regents 48 U.S. 85 (1984)

[4] See Old-NCAA Article 12

[5] NCAA v. Alston

[6] See NCAA v. Alston; See Also 15 U.S.C. § 1

[7] NCAA v. Alston

[8] See NCAA v. Alston at 2168

[9] See NCAA v. Alston at 2153

[10] See NCAA v. Alston at 2154

[11] https://www.cbssports.com/college-football/news/sec-implements-education-based-benefits-for-athletes-with-significant-fallout-soon-to-follow/

[12]https://www.espn.com/college-sports/story/_/id/32356922/big-12-joins-sec-letting-schools-set-athlete-compensation