By: Jordan Gary
Should college athletes be allowed to receive unlimited “education-related benefits” from schools in exchange for their labor? On March 22, 2021, the Supreme Court will hear NCAA v. Alston[1] to decide just that. The Court granted certiorari to determine whether the Ninth Circuit erred in holding that NCAA eligibility rules regarding compensation of college athletes violate antitrust law.[2] The eligibility rules in question restrict college athlete compensation, specifically what the parties call “education-related benefits,” to preserve the NCAA’s system of amateurism.[3] Because this is an antitrust case, the lower court used the Rule of Reason test, which balances a market restraint’s anticompetitive effects with its procompetitive justifications, to analyze the impact of the NCAA’s restraint on competition.[4] That court found that the NCAA’s only procompetitive justification could be achieved through less restrictive means, thus the restraint violated antitrust law.[5]
This case centers on the 1984 Supreme Court decision, NCAA v. Board of Regents, where the Supreme Court held that in limiting television broadcasts of college football games, the NCAA was trying to artificially increase the value of game tickets which was a violation of the Sherman Antitrust Act.[6] In Alston, the NCAA relies on dicta in Board of Regents and argues that the decision gives the NCAA broad discretion to create eligibility rules that are not subject to strict scrutiny under antitrust laws because they preserve the NCAA’s unique brand of amateurism.[7] However, Alston argues that the Court cannot use Board of Regents to grant the NCAA blanket antitrust exemptions.[8] So who is right?
To answer that question, we need to compare the NCAA’s arguments to what the Court actually said in Board of Regents. The NCAA argues that allowing student-athletes to receive unlimited “education-related benefits” would be too similar to a pay-for-play regime and render the NCAA’s brand of amateur college athletics virtually indistinguishable from professional athletics.[9] However, they also argue that a distinguishing feature of amateurism in the NCAA is higher education’s non-commercial objective.[10] Suppose higher education is, as the NCAA claims, an essential factor in what defines their brand of amateurism and athletics. In that case, it should not be against the NCAA’s ideals or the brand of college athletics to offer education-related benefits to student-athletes. Both the District Court and the Ninth Circuit reached this conclusion in their decisions.[11]
Further, in Board of Regents, the Court noted that amateurism in the NCAA was procompetitive because it differentiated the NCAA’s product from professional sports.[12] The NCAA relies heavily on this procompetitive justification for amateurism. However, as Alston points out, much has changed in the relevant markets since the Board of Regents decision in 1984.[13] In Board of Regents, the NCAA argued for the protection of its television broadcasting plan to protect its ticket sales for live events.[14] However, in the almost thirty-seven years since that decision, the television market for college athletics has shown not to inhibit live event ticket sales[15] and has proven incredibly lucrative for both the NCAA and member institutions.[16] This has resulted in massive salaries for athletic directors and coaches,[17] and provides a much more significant disparity between the student-athlete and everyone else involved in the college athletics industry. As Alston notes, federal and state legislation has been adopted or proposed that recognizes these inequities.[18] While it may not be in the Court’s purview to settle the nation’s debate over the merits of amateurism in this particular case, the Court should reasonably consider the changed landscape of college athletics since Board of Regents in its analysis.
Namely, these disparities call into question the NCAA’s and its member-school’s claimed primary missions of educating their students with athletics programs “designed to be a vital part of the education.”[19] If these missions are central to these institutions and college athletics, why would the NCAA limit college athlete’s education-related benefits? Especially considering how much revenue is made from college athletics and how many people and institutions, aside from the athletes, are financially benefiting from the industry. The NCAA does not justify this limitation outside of its argument that consumer interest in amateurism drives consumer demand for college athletics and the NCAA’s unique brand.[20] Alston and the lower courts point out that this is not factual, according to the record.[21]
Moreover, the NCAA’s claim that its eligibility rules are “so clearly procompetitive” that they should not be subject to strict scrutiny essentially asks the Court not to consider anticompetitive effects in an antitrust analysis.[22] However, failing to weigh the anticompetitive effects of a given restraint properly would render the Rule of Reason analysis incomplete. It would amount to courts summarily rendering markets procompetitive with no analysis. The NCAA’s claim that Board of Regents is meant to uphold the NCAA’s definition of amateurism against antitrust claims because it is inherently procompetitive[23] is not only not true, but is based in dicta by the Court, not in any binding holding. Because there is a question of horizontal restraint of trade, which is precisely what antitrust laws are designed to prevent, a detailed analysis of both the anticompetitive effects and procompetitive justifications of the restraints is only reasonable. The District Court and Ninth Circuit reasonably found that amateurism alone is not a procompetitive enough justification to warrant no detailed analysis. The Court should affirm the use of a detailed Rule of Reason test.
Finally, the NCAA argues that the District Court’s definition of amateurism[24] contradicts both Board of Regents and reality because professional athletes do not receive unlimited pay.[25] However this point does not stand up. The court explained that the NCAA did not clearly define amateurism, a non-circular definition was not clear from the NCAA’s constitution, and the SEC Commissioner testified that he did not know what amateurism meant.[26]
In particular, the NCAA’s argument that because professional athletes do not make unlimited amounts of money, student-athletes should not be able to receive unlimited education-related benefits does not make sense. While not every professional athlete does make unlimited amounts of money, they theoretically can, due to market competition for talent.[27] In that vein, student-athletes having the ability to receive unlimited amounts of education-related benefits does not mean that they will. As Alston points out, the injunction does not require schools to provide the benefits or prevent individual schools from restricting benefits. It merely allows the schools to compete with each other, in line with the purpose of antitrust law principles.[28]
This reasoning is also in line with the District Court’s findings that consumer demand is driven by the fact that student-athletes are students at particular institutions.[29] Suppose schools are unrestricted in the education-related benefits they can give to students. That would allow students to make decisions that best suit their athletic and academic future, and consumers would continue to follow athletes at particular institutions without regard to whether they are compensated. In this regard, the NCAA restricting student-athletes from theoretically receiving unlimited amounts of education-related benefits is more akin to market restriction on competition than preserving amateurism.
In Alston, the Supreme Court has a chance to bring an area of case law out of the 1980s and into the present day to reflect the changed landscape of college athletics. As part of that changed landscape, the Court also has the chance to recognize the labor of college athletes as the center of revenue generation in the college athletics market and to reward that labor, even if only with a gesture as small and reasonable as education-related benefits. It would be fitting to do so, especially given the current national landscape of both social justice[30] and legislation regarding the rights of college athletes.[31]
[1] See, National Collegiate Athletic Association v. Alston, No. 20-512, cert. granted, (docketed Oct. 19, 2020), https://www.supremecourt.gov/docket/docketfiles/html/public/20-512.html.
[2] Id.
[3] See, Brief for the Petitioner at 48, National Collegiate Athletic Association v. Alston, No. 20-512, cert. granted, (docketed Oct. 19, 2020); Brief for the Respondent at 3, National Collegiate Athletic Association v. Alston, No. 20-512, cert. granted, (docketed Oct. 19, 2020).
[4] In re National Collegiate Athletic Association Athletic Grant-In-Aid Cap Antitrust Litigation, 375 F.Supp.3d 1058, 1061-62 (N.D. Ca 2019) [hereinafter NCAA I].
[5] Id.
[6] NCAA v. Board of Regents of the University of Oklahoma, 468 U.S. 85, 119 (1984).
[7] Brief for the Petitioner, supra note 3 at 14-15.
[8] Brief for the Respondent, supra note 3 at 1.
[9] Brief for the Petitioner at 2-3, National Collegiate Athletic Association v. Alston, No. 20-512, cert. granted, (docketed Oct. 19, 2020).
[10] Id. at 2.
[11] NCAA I, 375 F.Supp.3d at 1089; In re National Collegiate Athletic Association Athletic Grant-In-Aid Cap Antitrust Litigation, 958 F.3d 1239, 1260-61 (9th Cir. 2020) [hereinafter NCAA II].
[12] NCAA v. Board of Regents of the University of Oklahoma, 468 U.S. 85, 101-02 (1984).
[13] Brief for the Respondent, supra note 3 at 5; see also, NCAA II, 958 F.3d at 1266 (Smith, J., concurring).
[14] Board of Regents, 468 U.S. at 116-117.
[15] See, Allen R. Sanderson and John J. Siegfried, The Role of Broadcasting in National Collegiate
Athletic Association Sports, 52 Rev. of Indus. Org. 305, 316 (Oct. 24, 2017) https://tinyurl.com/119pk20o (explaining that schools have expanded stadiums to make room for more paying fans in the past few decades).
[16] See, Brief for the Respondent, supra note 3 at 5-6 (listing television broadcast revenue from NCAA March Madness, College Football Playoff, and conference deals).
[17] See, Steve Berkowitz et al., NCAA Salaries – NCAAF Coaches, USA Today (Nov. 17, 2020), https://tinyurl.com/32zqxpyl (listing NCAA football head coach salaries where available, with the highest salary over $9 million in 2020); Robert Lattinville & Roger Denny, 2020 FBS Athletics Directors’ Compensation Survey, Athletic Director U (2020), https://tinyurl.com/16u2gqe0 (providing data on athletic director salaries at major universities in the United States, showing an average salary of over $1 million at Power 5 conference schools).
[18] Brief in Opposition, at 4 Petition for Writ of Certiorari, National Collegiate Athletic Association v. Alston, No. 20-512, cert. granted, (docketed Oct. 19, 2020).
[19] Brief for Petitioner, supra note 3, at 6 (internal quotations omitted).
[20] Brief for the Petitioner, supra note 3, at 14-15.
[21] Brief for the Respondent, supra note 3, at 42-44; NCAA II, 958 F.3d at 1249-51, 57-59.
[22] Brief for the Petitioner, supra note 3, at 15.
[23] Id.
[24] The NCAA claims the definition of amateurism from the NCAA and Board of Regents is that “student-athletes must not be paid,” but that the lower courts changed the definition to “[n]ot paying student-athletes unlimited payments unrelated to education.” Brief for the Petitioner, supra note 3, at 35.
[25][25] Brief for the Petitioner, supra note 3, at 36.
[26] NCAA I, 375 F.Supp.3d at 1070-71.
[27] While professional teams have a cap for how much they can spend on salaries in total, there are not specific limits on how much an individual athlete can earn. See generally, Jim Pagels, Are Salary Caps for Professional Athletes Fair?, Priceonomics, (Aug. 19, 2014) https://priceonomics.com/are-salary-caps-for-professional-athletes-fair/ (explaining how salary caps for professional athletes work).
[28] Brief for the Respondent, supra note 3 at 49.
[29] NCAA I, 375 F.Supp.3d at 1082.
[30] Corbin McGuire, College Athletes Using Platforms to Speak Out on Social Justice Issues, NCAA (Aug. 18, 2020), https://www.ncaa.org/about/resources/media-center/feature/college-athletes-using-platforms-speak-out-social-justice-issues (explaining the use of social media by college athletes to advocate for social issues, especially racism); Tim Nevius, I Used to Enforce the NCAA’s Exploitation of College Athletes; Now I Fight for the Players, USA Today (Sept. 3, 2020 10:00 am) https://www.usatoday.com/story/opinion/voices/2020/09/03/ncaa-athletes-college-coronavirus-safety-schools-exploitation-column/5690842002/ (explaining the financial exploitation of college athletes’ labor and that this exploitation disproportionately impacts students and athletes of color); Kwadwo Frimpong, Black People Are Still Seeking Racial Justice – Why and What to Do About It, Brookings (Nov. 12, 2020), https://www.brookings.edu/blog/how-we-rise/2020/11/12/black-people-are-still-seeking-racial-justice-why-and-what-to-do-about-it/ (explaining the national movement for racial justice that reached a pinnacle during the summer of 2020 and continues today).
[31] Dan Murphy, NCAA, Congress Have Labyrinth of Options, but NIL Clock is Ticking, ESPN (Dec. 17, 2020), https://www.espn.com/college-sports/story/_/id/30534578/ncaa-congress-labyrinth-options-nil-clock-ticking (explaining NCAA rules and federal and state legislation that has been proposed recently surrounding name, image, and likeness rights for college athletes, as well as proposed compensation and benefits).
