The U.S. Supreme Court on Monday unanimously ruled in favor of college athletes seeking unlimited benefits tied to education in a landmark case that enhances players’ ability to earn compensation while simultaneously diminishing the NCAA’s power. The Supreme Court ruled that the NCAA could not limit such benefits for athletes who play Division I basketball or football.
“The NCAA and its member colleges maintain important traditions that have become part of the fabric of America … but those traditions alone cannot justify the NCAA’s decision to build a massive money-raising enterprise on the backs of student athletes who are not fairly compensated,” wrote Justice Brett Kavanaugh in his concurring opinion. “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 any different.
“The NCAA is not above the law.”
The Supreme Court ruled 9-0 in favor of the appellees in Alston v. NCAA, who previously won a Northern District of California Circuit Court decision. The loss is the biggest legal defeat for the NCAA since the NCAA v. Board of Regents case in 1984 that allowed schools to monetize the rights to televised football games.
The suit in NCAA v. Alston was brought by a group of athletes led by former West Virginia running back Shawne Alston who contended the NCAA had violated antitrust laws by capping the amount of compensation they could receive as part of their scholarships. Currently, scholarships only include tuition, room, board and cost of attendance.
The NCAA attempted to take the ruling on the chin, noting in a statement that it believes it still has some power to regulate educational benefits.
While today’s decision preserves the lower court ruling, it also reaffirms the NCAA’s authority to adopt reasonable rules and repeatedly notes that the NCAA remains free to articulate what are and are not truly educational benefits, consistent with the NCAA’s mission to support student-athletes.
While this case does not create an avenue for schools to pay athletes directly, it does lead to the opportunity for schools to provide nearly anything they want to athletes so long as they can tie the items to the educational experience.
Most notably, schools can now offer internships, postgraduate scholarships and the like to lure athletes to campus. They will also be able to offer electronic equipment, such as computers. The lengths to which these benefits can be applied have not yet been worked out. For example, is there a scenario in which a car could be given to an athlete who lives a certain distance from campus or has a class in a certain area of town? The lower court has indicated the benefits would be limited.
The Supreme Court’s decision enhances the chances of athletes being able to get vast sums of benefits in the future with the NCAA still finalizing name, image and likeness rules while awaiting a potential Congressional bill.
“The NCAA has long restricted the compensation and benefits that student athletes may receive. And with surprising success, the NCAA has long shielded its compensation rules from ordinary antitrust scrutiny. Today, however, the Court holds that the NCAA has violated the antitrust laws,” wrote Justice Kavanaugh. “The Court’s decision marks an important and overdue course correction. … I add this concurring opinion to underscore that the NCAA’s remaining compensation rules also raise serious questions under the antitrust laws.”
In essence, the NCAA version of amateurism is being redefined as this decision — with NIL regulations to follow — will allow athletes to be compensated beyond what the NCAA has fought to defend for decades, the idea that a scholarship ought to be enough.
A Pac-12 study commissioned a few years ago found that athletes were spending an average of 50 hours per week on their sport. Legislation had to be enacted that prohibited coaches from beginning practice after midnight and before 6 a.m. because NCAA rules restricted them more than normal students.
In rendering the decision, the Supreme Court altered the underpinnings of the NCAA — a non-profit organization run by its members. It decided the NCAA’s autonomy has become such that it violated the Sherman Antitrust Act of 1890 that did away with monopolistic practices by giant companies.
In the end, the Supreme Court delivered some of the harshest words ever handed down to the NCAA in a legal proceeding. Throughout the case, the NCAA continued to rely on wording from that 37-year old Regents case (which it lost) to bolster its case in Alston. The NCAA contended the Regents decision approved NCAA limits on athlete compensation.
“That is incorrect,” the Supreme Court wrote.
Justice Kavanaugh continued: “The bottom line is that the NCAA and its member colleges are suppressing the pay of student athletes who collectively generate billions of dollars in revenues for colleges every year.”
At the time, it was surprising the Supreme Court took the case in December 2020. There was a train of thought that, after former President Donald Trump had added conservative justices, the Court would bolster NCAA rules.
Instead, the decision was devastating for the 116-year old organization that was formed in 1905 to protect the physical welfare of athletes.
If NIL rights are granted as expected, the NCAA will be stripped to its elements. Its center will be enforcement and the NCAA Tournament. Its oversight over athletes’ ability to market themselves will be lessened.
“Generally speaking, I don’t think this changes anything for the NCAA,” said Jason Montgomery, an attorney who works with student eligibility for Husch Blackwell in Kansas City. “The Supreme Court wanted to limit its decision. … That all being said, it’s also clear it’s not going to limit [the ability] for plaintiffs in antitrust cases in the future.”
The decision allows the NCAA Council to quickly adopt NIL legislation this week. The Council had been waiting until a Supreme Court decision to proceed. NIL rights would allow athletes to earn compensation for such outside endeavors as autographs, endorsements and commercials.
“Even though the decision does not directly address name, image and likeness, the NCAA remains committed to supporting NIL benefits for student-athletes,” said NCAA president Mark Emmert in a statement. “Additionally, we remain committed to working with Congress to chart a path forward, which is a point the Supreme Court expressly stated in its ruling.”
There is urgency because NIL laws in six states (Alabama, Florida, Georgia, Mississippi, New Mexico and Texas) are set to begin July 1. The thinking has been the NCAA has to pass something before that date to address the situations in the 44 other states.
The NCAA Council is meeting Tuesday and Wednesday. Any recommendations would have to be approved by the NCAA Board of Directors on June 28.
“Today’s ruling from the Supreme Court makes clear that the status quo in college athletics is untenable,” said Sen. Maria Cantwell (D-WA), chair of the U.S. Senate Committee on Commerce who is working on a federal NIL bill. “Student athletes are the ones creating tremendous value and providing entertainment for millions with their talent, hard work and skill — and NCAA policies must reflect that reality. This decision gives new urgency to the bipartisan work we are doing to set a nationwide standard for student athletes that gives them control of their Name, Image and Likeness (NIL) as well as providing additional health benefits and standards.”