College sports raise billions of dollars from ticket sales, television contracts, merchandise and video game placements. And, the argument about where student athletes place in that hierarchy of cash has been argued for a decade-plus. Supporters of the student athletes say the young players are being exploited and barred from the opportunity to monetize their talents, and a recent Supreme Court ruling agrees.
In a unanimous decision on Monday, June 21, the Supreme Court ruled that the NCAA has illegally restricted education-based benefits that could be used as compensation to student athletes. The case was brought by current and former student athletes who played college football, as well as men’s and women’s college basketball. They sued the NCAA and 11 conferences, claiming that the rules restricting compensation violated antitrust laws.
This when compared to the 2016 move where the NCAA negotiated an eight-year extension of its broadcasting rights, worth $1.1 billion annually, one can see why the lower court ruling was moved to the high court. “To the extent [the NCAA] means to propose a sort of judicially ordained immunity from the terms of the Sherman Act for its restraints of trade,” Justice Neil Gorsuch wrote in the court’s opinion.
“That we should overlook its restrictions because they happen to fall at the intersection of higher education, sports, and money—we cannot agree.”
Gorsuch made clear that the athletic organization can still enforce rules that forbid schools from paying students salaries or giving them outlandish gifts to lure them to their programs. “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,” he said.
In a concurring opinion, Justice Brett Kavanaugh called into question the NCAA’s restrictions, writing, “To underscore that the NCAA’s remaining compensation rules also raise serious questions under the antitrust laws,” making clear that the court’s decision “does not address the legality” of those rules because they were not at issue on appeal.
Kavanaugh went on to make a case against those remaining rules.
“The NCAA acknowledges that it controls the market for college athletes. The NCAA concedes that its compensation rules set the price of student athlete labor at a below-market rate. And the NCAA recognizes that student athletes currently have no meaningful ability to negotiate with the NCAA over the compensation rules,” he wrote. He went on to attack the NCAA’s past argument that the rules are pro-competitive because they help define college sports as featuring unpaid amateurs, calling this claim “circular and unpersuasive.”
In concluding his argument, Kavanaugh compared the NCAA to other industries, noting the absurdity of suggesting that nurses’ wages be capped because it would make their work “purer,” or that restaurant customers prefer eating food made by “low-paid cooks.”
“The NCAA’s business model would be flatly illegal in almost any other industry in America,” Kavanaugh said.
“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,” he concluded. “The NCAA is not above the law.”