The Supreme Court docket’s unanimous choice to pay NCAA pupil athletes, defined

The Supreme Court on Monday issued a conditional victory for elite college athletes. The immediate effect of the unanimous decision of the court in the National Collegiate Athletic Association v Alston case is that many elite student athletes receive additional education-related compensation, such as additional scholarship money. However, the case could have wider implications and eventually lead to these athletes receiving salaries.

The court’s decision marks the final chapter in a lengthy legal battle that began in 2014. Several athletes from the highest levels of college sport – men’s and women’s Division I basketball and soccer players from the NCAA’s elite Football Bowl Subdivision – filed this lawsuit seven years ago. They questioned the rules enforced by the NCAA and various other governing bodies in college sports that place fairly strict limits on the compensation of athletes.

To be clear, these athletes weren’t uncompensated. Many top athletes received scholarships that covered their tuition fees, room and board. Some players could also receive small cash scholarships to cover living expenses, as well as perks like meals and medical care for sports injuries. But they weren’t getting anywhere near the stratospheric salaries available to the best professional athletes – or none at all.

The top student athletes also receive a rather meager salary, although they are enormous profit centers for their universities – and a number of retailers and broadcasters who benefit from university sports. For example, in the 2015-16 academic year, Division I Basketball and Division IA Football had sales of $ 4.3 billion. The NCAA’s current transfer agreement for their annual March Madness basketball tournament is valued at over $ 1 billion annually.

In the course of the Alston litigation, two lower courts ruled that some – but not all – NCAA restrictions on athletes’ compensation must be lifted. As Judge Neil Gorsuch summarized these lower court rulings in his Supreme Court opinion, the lower courts removed “rules that limit graduate or professional school scholarships, payments for academic tuition or paid post-graduate internships” while leaving them with “targeted rules” to ensure that ‘athletic students do not receive unlimited payments unrelated to education’. ”

The opinion of Gorsuch leaves these lower court decisions.

In essence, this means that athletes can receive additional education-related payments, such as: However, a member of the court argued in a separate advisory opinion that student athletes should be given more extensive relief when filing a new lawsuit to challenge any NCAA compensation limits.

The NCAA hoped to avoid that outcome by arguing that it should effectively be exempted from antitrust rules that prevent companies from partnering with their competitors in setting employee compensation. The result of Gorsuch’s opinion is that in at least one instance like this the NCAA must follow the same antitrust rules as everyone else – although this may not apply in every future case alleging that a sports league is in violation of federal antitrust law.

The NCAA claimed it was beyond the reach of antitrust law because it was a “joint venture”.

The NCAA’s rules for limiting player compensation are, in the parlance of antitrust law, a “horizontal agreement”. That said, they’re an agreement to set prices between multiple companies that compete on the same level within the college sports industry.

As the Supreme Court in NCAA v. As explained by the Board of Regents of the University of Oklahoma (1984), “horizontal pricing and production limits under an” inherently illegal “approach are usually condemned because these practices are so likely to be anti-competitive.” collapse to depress wages, the courts usually hit these employers with a hammer.

However, the regent’s decision also suggests that federal antitrust law does not always apply to sports leagues with full force.

Such leagues are called “joint ventures” by antitrust lawyers. The nature of team sport is that several teams have to agree to compete together according to a common set of rules. You need to agree when games will be scheduled and where those games will take place. For these reasons, the courts usually allow sports teams to participate in agreements to a certain extent – and to form umbrella organizations like the NCAA, which lays down rules for many teams – because competitive sports cannot exist without a certain amount of mutual agreement.

However, the result of the court’s ruling in Alston is that the special diligence that antitrust law typically accords to sporting leagues does not extend to attempts by the NCAA to limit player compensation.

The fact that a certain amount of collusion between competitors “is necessary in order to create or maintain a league sport,” writes Gorsuch, “does not imply all aspects of a sophisticated collaboration between the leagues:“ Nobody questions that basketball is the Division I and FBS Football can (and are) continue without the district court’s educational-related compensation restrictions. the games go on. “

Thus, the NCAA cannot evade compliance with federal antitrust law.

In addition, the NCAA argued that paying more to their athletes would fundamentally change the product that the NCAA offers to consumers. According to the NCAA, this product is “amateur” athletics offered by low-paid student athletes, not professionals paying a market salary. But the court treated this argument rather negatively.

In his statement, Gorsuch noted, among other things, that “the NCAA’s view of amateurism has changed steadily over the years”. A former commissioner for the Southeastern Conference of College Sports even testified that he “was never clear what was really meant by amateurism”.

Hence, it is difficult for the NCAA to claim that they offer a unique product based on “amateurism” when they cannot even adhere to a single definition of what it means to be an “amateur” athlete.

The NCAA may suffer an even greater loss in a future event

The lower courts lifted the NCAA’s limits on education-related compensation for athletes, but left different compensation limits – and the Supreme Court upheld that baby-splitting result in Alston.

However, a major reason the Supreme Court did not move forward, as Gorsuch notes in its statement, is that the plaintiffs did not request it. As he writes, “the student athletes [did] did not renew her blanket challenge to the NCAA’s compensation restrictions ”when her case reached the Supreme Court.

Although the entire court has failed to consider whether elite student athletes should be eligible for more compensation than the Alston statement requires, Judge Brett Kavanaugh wrote a separate consensus statement arguing that “the remaining NCAA compensation rules are also serious issues under the antitrust law. “

As Kavanaugh writes, “the NCAA’s business model would be completely illegal in almost any other industry in America.” Among other things, the NCAA controls “the market for college athletes”; it “acknowledges that its compensation rules set the price of student athletic work at a below market price”; and it “recognizes that there is currently no meaningful way for student athletes to negotiate compensation rules with the NCAA.”

This is exactly the kind of iron grip on pricing that antitrust laws are designed to prevent.

It remains to be seen whether Kavanaugh’s opinion will one day become law, but it will likely signal student athletes to consider filing a new lawsuit to challenge the NCAA’s remaining compensation restrictions.

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