Law & Courts

U.S. Supreme Court Rules for Athletes Over NCAA in Case on Education-Related Compensation

By Mark Walsh — June 21, 2021 5 min read
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The U.S. Supreme Court on Monday dealt a major defeat to the National Collegiate Athletic Association, unanimously upholding a lower-court injunction that requires increased education-related compensation of student-athletes, such as for graduate school scholarships, paid post-eligibility internships, and study abroad.

The case, NCAA v. Alston (No. 20-512), has drawn the interest of the precollegiate sports world for its potential impact on college recruitment of high school athletes. But the decision is likely to be widely, and immediately, felt in college sports.

Writing for the court, Justice Neil M. Gorsuch said a federal district judge had applied the correct level of scrutiny under federal antitrust law when she ruled in part for a class of college student-athletes who challenged many of the NCAA’s compensation rules. The judge considered the NCAA’s restrictions on education-related aid a restraint on trade under the Sherman Antitrust Act.

“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—that we should overlook its restrictions because they happen to fall at the intersection of higher education, sports, and money—we cannot agree,” Gorsuch said.

He said the Supreme Court could not resolve the national debate about amateurism in college sports, and whether the injunction went too far in “undervaluing the social benefits associated with amateur athletics,” or not far enough in granting “fuller relief” to student-athletes clamoring for more compensation.

“Our task is simply to review the district court judgment through the appropriate lens of antitrust law,” Gorsuch said. “That review persuades us the district court acted within the law’s bounds.”

Justice Brett M. Kavanaugh, in a concurring opinion, said the court’s conclusion that the NCAA has violated the antitrust laws “marks an important and overdue course correction.”

The NCAA’s other rules barring non-education-related payments to college athletes and barring them from endorsement deals, which weren’t before the high court in this case, “also raise serious questions under the antitrust laws,” Kavanaugh said.

“The NCAA’s business model would be flatly illegal in almost any other industry in America,” he 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. The NCAA is not above the law.”

Expansion of education aid, including payments of nearly $6,000

The NCAA said in a statement that “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.”

NCAA President Mark Emmert said in the statement that the organization remains committed to supporting so-called name, image, and likeness benefits for student athletes. That issue also was not before the court in this case, but the NCAA has been pressured by a growing number of state laws that would grant college athletes such NIL rights. Some of the laws, which clash with current NCAA rules, are set to take effect July 1.

In the Alston case, two lower courts rejected the original goal of the class action by college athletes, which was to remove all limits on compensation. But those courts found that the NCAA’s rules restricting education-related aid to student-athletes violated federal antitrust law.

A 2019 injunction in the case by U.S. District Judge Claudia Wilken of Oakland, Calif., upheld by the U.S. Court of Appeals for the 9th Circuit, in San Francisco, and now by the Supreme Coiurt, authorizes the expansion of education aid to include unlimited payments for post-eligibility internships and annual cash payments of nearly $6,000 above scholarships and other aid that student-athletes now receive to cover the full “cost of attendance” at their institutions.

The NCAA appealed to the Supreme Court, arguing that its rules were “procompetitive” under antitrust principles because they help define college sports as a product distinct from professional sports.

Gorsuch, whose opinion outlined the history of intercollegiate sports going back to an 1852 boat race between Harvard and Yale that included lavish prizes, described college sports today as a “massive business” where TV rights fees bring in billions of dollars, the NCAA president earns $4 million per year, and some coaches earn much more than that.

“The NCAA is free to argue that, because of the special characteristics of its particular industry, it should be exempt from the usual operation of the antitrust laws—but that appeal is properly addressed to Congress,” Gorsuch said.

Kavanaugh, in his concurrence, said the bottom line of the case 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. Those enormous sums of money flow to seemingly everyone except the student athletes.”

He acknowledged that there might be “difficult policy and practical questions” if all the NCAA’s compensation rules were struck down, such as how paying athletes more might affect non-revenue sports and whether athletes in some sports but not others should receive pay. Also, he wondered how any compensation system would comply with Title IX, the federal law that bars sex discrimination in federally funded educational programs and which plays a key role in requiring equal athletic opportunities for female college athletes.

Kavanaugh said those questions might be resolved through legislation or even collective bargaining between colleges and student athletes.

The opinions did not address concerns raised about the case’s implications for high school sports.

The National Federation of State High School Associations, which writes rules for high school sports, had filed a friend-of-the-court brief in support of the NCAA, arguing that under a ruling for the college athletes, “many premier high school student athletes would become motivated less by their love of sports and more by the prospect of being rewarded handsomely to play certain sports in college.”

There was no immediate response by the federation to a request for comment.

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