Washington Post - Antitrust law is the key to making the NCAA pay student-athletes
Sandeep Vaheesan of Open Markets Institute writes in The Washington Post about the NCAA’s Supreme Court case against football and basketball players over the antitrust aspects of player compensation.
A day after Gonzaga and UCLA won their Elite Eight contests and joined Baylor and Houston in the Final Four of men’s college basketball, the Supreme Court heard oral argument in National Collegiate Athletic Association v. Alston, a case that could remake college basketball and football in the United States. In Alston, a group of basketball players (both men and women) and football players challenged, on antitrust grounds, the NCAA’s rules prohibiting pay to players and won a partial victory, with the district and appellate courts striking down the NCAA’s ban on payments tied to education. As the players successfully argued, the NCAA’s caps on player compensation restrain competition among colleges for athletes’ talents.
The NCAA now asks the high court to reverse the judgment in favor of the players and grant it an effective antitrust immunity. (The Open Markets Institute, where I serve as legal director, filed an amicus brief in support of the players.) At oral argument, several justices expressed skepticism that colleges, operating through the NCAA, should have the right to collusively cap compensation to the athletes who draw millions of fans, under the guise of “amateurism.” They were right to do so. The NCAA is, in effect, an employer cartel that deprives the predominantly Black basketball and football players of a fair share of the revenue they generate. Wednesday’s arguments further exposed the weakness of the NCAA’s position, showing that it absurdly upholds the supposed interests of its fans at the literal expense of the athletes it employs.
The NCAA is a peculiar institution. Many of its Division I colleges and universities run highly lucrative basketball and football programs. The NCAA and the major conferences produce tens of billions of dollars in annual revenue from the two sports. Member colleges, however, share only a small portion of this revenue with the players because they agree not to pay the players a wage and cap their compensation at a scholarship covering tuition, room and board and ancillary expenses of college attendance. Because not all players receive full scholarships, some have reported not having enough money to obtain food and other necessities. Whereas professional basketball and football players earn about 50 percent of league revenue in salaries and benefits, their college counterparts receive less than 20 percent of their sports’ revenue in the form of scholarships. Where does the remaining 80 percent of revenue go? In part to coaches like Alabama’s Nick Saban and Kentucky’s John Calipari, who each make around $10 million a year.
Ordinarily, the NCAA’s conduct would be clearly illegal under the antitrust laws as an association of employers collusively holding down the compensation of its workers. Until recently, however, the NCAA successfully used a 1984 Supreme Court case to defend its wage-fixing. In NCAA v. Board of Regents of the University of Oklahoma, the court struck down the NCAA’s rules that prevented top football programs from entering into separate television broadcasting contracts. In passing, it also praised the social value of amateur athletics. The NCAA has since persuaded several courts that this throwaway line in a decision invalidating the NCAA’s restraints on TV contracts protected its restrictions on compensation for players.
Despite the NCAA’s expansive interpretation of Board of Regents and earlier victories in litigation, the players in Alston challenged the NCAA’s rules against paying players and won at trial. They successfully defended this victory on appeal. A district judge in California and the Court of Appeals for the Ninth Circuit concluded that the players showed that the NCAA’s restraints hurt them. In the absence of these restraints, colleges would compete for players’ talents by offering wages, salaries and benefits.
Read the full op-ed on The Washington Post here.