The NCAA went to the Supreme Court looking for help in keeping its rules limiting college athlete compensation in place. What it got instead was another significant blow to the amateur ideal and a public admonishment that won’t soon be forgotten.
Monday morning the highest court in the land ruled unanimously 9-0 in upholding the U.S. Court of Appeals for the 9th Circuit’s earlier ruling, which stated that NCAA schools were in violation of the Sherman Act and could no longer collude to fix the price of labor for college athletes — as long as the benefits in question are related to their education.
Here’s what you need to know about the Supreme Court opinion on NCAA v. Alston, written by Justice Neil Gorsuch, and a scalding concurring opinion by Justice Brett Kavanaugh that called the entire NCAA rule book into question for good measure:
—What was argued in NCAA v. Alston?
A group of former college athletes brought an antitrust suit to put the NCAA under the scrutiny of the Sherman Act once again. The athletes hoped the court would strike down all of the NCAA’s rules against pay for play, but the district court and court of appeals would only go as far as to say there should not be limits on benefits related to education. The thinking was that such benefits — postgraduate internships, vocational training and resources such as computers and iPads — would only serve to emphasize the difference between college sports and professional sports.
While the NCAA could have viewed that as a victory — since the court was willing to accept its justification for keeping limits on non-education-related benefits — the association decided to appeal to the Supreme Court. The assumption was that a staunchly conservative court could override the lower courts to keep the status quo in place. But the Supreme Court upheld that limits on educational benefits were unlawful and unnecessary.
—How does this apply to the everyday operation of college sports?
Athletic departments can now offer whatever they want in education-related benefits to athletes. If the USC Trojans want to give every football and basketball player a postgraduate scholarship in the field of their choice, they can. If the UCLA Bruins want to spring for the fanciest iPads for every athlete, they can.
The NCAA’s worry was that schools will live in the gray areas of the rule book to disguise extra educational opportunities as recruiting inducements.
“But the NCAA fears schools might exploit this authority to give student-athletes ‘luxury cars’ ‘to get to class’ and ‘other unnecessary or inordinately valuable items’ only ‘nominally’ related to education,” Gorsuch wrote. “Again, however, this over-reads the injunction in ways we have seen and need not belabor. Under the current decree, the NCAA is free to forbid in-kind benefits unrelated to a student’s actual education; nothing stops it from enforcing a ‘no Lamborghini’ rule.”
The court’s opinion confirms that the NCAA can still propose new rules that govern these educational benefits. But the schools will have to tread lightly now to make sure they aren’t sued again in the future if imposing fresh limits.
—How does this opinion affect the name, image and likeness (NIL) debate?
The Alston case was about what schools can offer athletes directly from their coffers. And as long as the NCAA is protected under law to only provide educational benefits, then it can continue to claim that athletes are not employees but merely students who play a varsity sport.
NIL is about payments from third parties to athletes for endorsements, sponsorships, autographs, appearances, etc. Since the schools are not paying athletes for their NIL rights, the NCAA similarly can still claim athletes are not employees.
The NCAA has been forced by dozens of state laws to change its rules on NIL, and it is now being forced by the court to allow schools to allow unlimited extra educational benefits. Neither development will fully implode the amateur model, technically, because the NCAA can still claim athletes are unpaid just like other students on scholarship.
The NCAA’s Division I Council was supposed to vote on new NIL allowances in January but put it off to see if the Supreme Court would rule in their favor in Alston. While they’re not the same thing, a favorable ruling in Alston would have given the NCAA more confidence to put stringent “guardrails” on NIL payments. Now? Again, the schools will have to tread more lightly.
—So what’s next?
The NCAA Division I Council, which votes on rules changes, is set to meet Tuesday and Wednesday. Now that the schools know with this Supreme Court opinion that the NCAA’s dream of an antitrust exemption is off the table, the NIL rules can take shape with that in mind.
On July 1, at least six states’ NIL laws will go into effect. Schools located in states without active NIL laws will still follow NCAA rules for now. It is most certainly going to be chaos, but this is what the NCAA asked for by moving so slowly to evolve.
The NCAA is still waiting for Congress to pass a one-size-fits-all federal solution to NIL, but it should worry that the Supreme Court’s opinion will only embolden Democratic senators to push for broad reform that includes protections for athlete health and safety along with full NIL rights.
If Kavanaugh’s concurring opinion, which covers the last five pages of the 45-page document, does not embolden senators and college athlete activists in the coming months, nothing will.
“The NCAA couches its arguments for not paying student athletes in innocuous labels. But the labels cannot disguise the reality: The NCAA’s business model would be flatly illegal in almost any other industry in America,” Kavanaugh wrote.
“All of the restaurants in a region cannot come together to cut cooks’ wages on the theory that ‘customers prefer’ to eat food from low-paid cooks. Law firms cannot conspire to cabin lawyers’ salaries in the name of providing legal services out of a ‘love of the law.’ Hospitals cannot agree to cap nurses’ income in order to create a ‘purer’ form of helping the sick. News organizations cannot join forces to curtail pay to reporters to preserve a ‘tradition’ of public-minded journalism. Movie studios cannot collude to slash benefits to camera crews to kindle a ‘spirit of amateurism’ in Hollywood.
“Price-fixing labor is price-fixing labor. And price-fixing labor is ordinarily a textbook antitrust problem because it extinguishes the free market in which individuals can otherwise obtain fair compensation for their work.”
