Supreme court has ruled NCAA violated antitrust laws by capping college-athletes educational gifts and benefits.
College athletes filed a lawsuit against the NCAA, for their rules that prevent students from being paid with scholarship funds being capped at the cost of attendance. the rule meant that college athletes have a $5,000 cap on expenses.
The NCAA argued that the rules were necessary to ensure the integrity of amateurism in college sports. Whereas college athletes argued that the rules suppress their ability to be rewarded for their valuable skills.
The US Supreme Court sided with the college athletes, declaring the NCAA rules to violate antitrust laws. Specifically, the rules violated the Sherman Antitrust Act, which is meant to outlaw monopolies in business.
Formed in 1906, the National Collegiate Athletic Association (NCAA) is a nonprofit and member-led organisation that regulates college-athletes in North America. Initially organising events in track and field, the organisation's jurisdiction extended into other sports. The NCAA regulates student-athletes in 24 sports across three different divisions - Division I, II, and III.
Member representatives that serve on committees draw up rules and regulations. There are around 1,500 committee members from approximately 450 institutions across the United States. Those members decide which rules to adopt and implement on their campuses.
Whilst the NCAA generates billions of $$$ every year, the organisation is nonprofit, which means that the revenue is dispersed to various student and institutional funds.
The NCAA argued against the lifting of the cap because college athletes would not be as focused on education as they would be with a cap. Any lifting of a cap would erode the nature of amateurism in college sports.
However, the concept of amateurism in college sports was initially based on keeping the working class out of sports that were only meant for college men. Those college men would not accept money as it was nobler to be an amateur.
The NCAA's amateurism argument is weakened by the fact that graduation rates with college athletes are incredibly low, despite the fact that there is an existing cap on educational gifts and benefits.
The court sided with the student athletes in the compensation row, which only addressed the lower court's opinion. The court said that the limits on educational expenses are not fair and violated antitrust laws.
Whilst the court mentioned the hefty salaries paid to college coaches, they did not go as far as to allow unlimited salaries to college athletes. However, the decision does open the door to future claims that seek greater compensation, possibly in the form of a salary. Justice Neil Gorsuch said that the NCAA had essentially sought "immunity from the normal operation of the antitrust laws".
Jeffrey Kessler, the senior lawyer representing the student-athletes in a statement recognised how important the decision for compensation will be for those athletes that "will never join the pros".
What this ruling means
The ruling allows for athletes to be compensated for their services. However, the Court left leeway for the NCAA to design rules around student benefits with Justice Gorsuch adding that, " If the NCAA believes certain criteria are needed to ensure that academic awards are legitimately related to education, it is presently free to propose such rules".
The NCAA clarified that it will look at whether student-athletes can be compensated for the use of their intellectual property rights, which allow the athletes from benefiting from their image.
The ruling will also have implications on the way colleges recruit athletes. The decision indirectly promotes an athlete "arms" race between the colleges and enhances the competition. Smaller institutions will find it harder to lure top talent away from colleges that have greater resources.
Who does this ruling help?
College sports in America have generated billions in revenue through corporate sponsorships, endorsements, licensing fees and TV contracts. According to the NCAA, college sports generated $18.9bn in 2019. Following a Supreme Court ruling in the 80s, Colleges made vast sums of money from broadcasting rights. Whilst this may be a benefit to colleges, it became a problem.
Whilst colleges are making a lot of money, some student-athletes struggle financially. This rings most true with the athletes that never make it pro - the 99%.
despite helping West Virginia University win an Orange Bowl, Shawne Alston never made it to the NFL.
Although the trophy brought the college revenue and fame, Alston struggled to find funds to feed himself. The current head coach of West Virginia makes $4m per year. US college coaches are amongst the highest-paid employees in 39 of 50 states.
"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. "
Justice Brett Kavanaugh