Kicked across sports pages and TV broadcasts was the recent U.S. Supreme Court ruling that the NCAA violated antitrust laws in its regulation of certain compensation to college athletes.
But no, it did not rule that college athletes are entitled to be paid a salary or hourly wage for their athletics. So, what is the antitrust law all about and how are NCAA athletes affected by this ruling?
The Supremes noted that colleges across the country have leveraged sports to bring in revenue, attract attention, boost enrollment and raise money from alumni. That profitable enterprise relies on “amateur” student-athletes competing under rules that restrict how the schools may compensate them for their play.
The claim in this case brought by former student-athletes was that the NCAA issues and enforces these rules. These rules depress compensation for at least some student-athletes below what a competitive market would yield.
The claim was that the NCAA’s rules violate the Sherman Act, which prohibits contracts, combinations or conspiracies “in restraint of trade or commerce.”
Antitrust policy is premised on the idea that competition in the marketplace yields the best allocation of the nation’s resources, but restrained competition can lead to monopolies, which is a bad thing. The Sherman Act’s prohibition on restraints of trade has long been interpreted by courts to prohibit only restraints that are “undue.”
Whether a particular restraint is undue is generally decided by a “rule of reason.” This requires a court to do a fact-finding of market power and structure so as to decide what a restraint’s actual effect is on competition.
The NCAA tried to argue that its business is special, and special exception should exclude it from antitrust law. Or if not excluded, that at least it be given special leeway under antitrust law. This was necessary, argued the NCAA, for it to maintain its amateur competitiveness between schools.
Nope, said the Court. The only question under antitrust law is: Is college sports a trade?
Yup.
Can colleges restrain athletes from the marketplace?
Nope, if that restraint is undue.
In this case, the Supremes found undue certain NCAA rules limiting the education-related benefits schools otherwise could make available to student-athletes. Among those are paid internships, post graduate scholarships, tutoring or education abroad. In effect, you can’t completely restrict anything that is linked to direct educational benefit. To completely restrict that, said the Court, violates the rule of reason.
At the same time, however, it refused to wipe out the NCAA’s rules limiting undergraduate athletic scholarships and other compensation related to athletic performance.
So, before all the sports shows’ talking heads go agog with fantasy discussions of star QBs lawfully getting their Lamborghini, the Supremes specifically said it’s not undue for the NCAA, or conferences within it, to define what those educational benefits are, or for creating rules on their applicability.
Restriction on pay-for-play seemingly remains intact.
The national debate on amateur college sports continues. The sports shows’ talking heads continue to explode.
So, please pass the nachos while I continue to root against Alabama and Ohio State and churn ink in a law column discussing amateur sports.
Leave off the jalapenos.
Brett Kepley is a lawyer with Land of Lincoln Legal Aid Inc. Send questions to The Law Q&A, 302 N. First St., Champaign, IL 61820.
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June 27, 2021 at 11:15PM
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