By Jacob Pierce.
For the first time in 35 years, the United States Supreme Court will hear an antitrust matter involving the National Collegiate Athletic Association (“NCAA”). On March 31, 2021, the Court is set to hear oral arguments in a case called NCAA v. Alston. This case is significant because it has the potential to settle a landmark issue that has dominated college athletics coverage in the recent past—student-athletes’ right to compensation.
How Did NCAA v. AlstonReach the Court?
Prior to reaching the Supreme Court, the Ninth Circuit Court of Appeals affirmed the United States District Court’s decision holding the NCAA cannot outright restrict or limit its member institutions from giving student-athletes non-cash benefits for the pursuit of academics. Under this holding, universities would be permitted to give benefits to student-athletes in the form of computers, musical instruments, science equipment, study-abroad programs, and other items as long as they are purchased and used in the pursuit of academic activities. These benefits are in addition to academic related benefits that student-athletes already receive in the form of cost-of-attendance benefits including tuition, room and board, meals, and textbooks. Although this was a large blow to the NCAA, the Ninth Circuit’s opinion did not completely disfavor the NCAA and its amateurism model. For instance, the Ninth Circuit recognized, to the NCCA’s delight, that its constraints on student-athlete compensation unrelated to academic pursuits were indeed essential to “preserving amateurism and thus improving consumer choice by maintaining a distinction between college and professional sports.”
The final issue the Ninth Circuit touched on was student-athletes’ ability to commercialize their name, image, and likeness (“NIL”) with third parties. A common example of this would be any type of endorsement deal. This discussion by the panel came on the heels of the passing of the Fair Pay for Play Act, a piece of California state legislation, that goes into effect in January 2023, enabling student-athletes attending universities in the state to profit from their NIL rights. However, the Ninth Circuit opined that the student athletes’ arguments on that issue were “premature.” It is possible that the Ninth Circuit declined to address the NIL issue because it believed that the NCAA would rule on the issue of NIL itself. In April of 2020, the NCAA Board of Governors came out with recommendations that mildly supported student-athletes rights to commercialize and profit from their NIL, provided that sufficient guardrails were put in place. For instance, the Board of Governors wanted to ensure, among other things, that NIL payments were not merely a way for universities to pay athletes, that schools and conferences would play no role in NIL activities, and that boosters (i.e., large donors) of universities would not use NIL opportunities as a chance to recruit student-athletes to their respective school. However, all momentum stalled on January 11, 2021, when the NCAA Division 1 Council voted to postpone indefinitely its vote on NIL legislation that was supposed to take place no later than January 31, 2021.
Key Issue(s) for the Court and Parties’ Positions
According to the brief supplied by respondent, the issue for the Supreme Court to decide is “whether restraints that competing NCAA member schools have agreed to impose in the name of amateurism should be exempt from challenge under the antitrust laws.” In layman’s terms, the parties want the Court to declare whether education related benefits to student-athletes can be limited by the NCAA and its member schools without being subject to U.S. antitrust laws. As one would expect, the NCAA would prefer the Court to rule in the affirmative in the name of keeping amateurism and professional sports distinct and to preserve parody among its member schools. Respondents believe that the NCAA’s position is extreme. This is evident in their brief to the Supreme Court which reads that the injunction, rendered by the District Court and affirmed by the Ninth Circuit, stopping the NCAA and its member schools from imposing these limitations on academic related benefits “simply enables individual schools and conferences to compete among themselves.” In reference to the NCAA’s amateurism model, the brief adds “there is no reason to believe that eliminating restraints on education related benefits will fundamentally transform the century-old institution of NCAA sports.” Moreover, the Court may address the issue of student-athletes’ ability to commercialize their NIL rights, but this is not an explicit issue in front of the Court as it stands currently.
Implications of NCAA v. Alston
No matter how the Court rules, the outcome should have a very direct and lasting impact on the NCCA, its member schools, and student-athletes—especially as it pertains to the economics and structure of college sports. For instance, if the Court were to rule for Respondent, meaning that education related benefits limits would violate federal antitrust law, it could lead to significant competition among schools for student-athletes. As an illustration, this could hypothetically mean Clemson University and University of Alabama would be allowed to entice a high-school athlete to come to their school based on the amount of education related benefits it can offer to them. Obviously, the NCAA is concerned that this could blur the lines between professionals and amateurs depending on how outrageous the offers to athletes become. On the other hand, if the court rules for the NCAA, the status quo would remain, allowing the NCAA and its member schools to restrict the amount of education related benefits that student-athletes can receive.