Supreme Court ruling could bring about shift in athlete compensation

A unanimous decision by the U.S. Supreme Court could bring about change — perhaps modest in the short term but potentially more sweeping in years ahead if the NCAA is challenged under antitrust law.

The Supreme Court upheld a lower court decision in NCAA v. Alston, a decision that is largely viewed as an antitrust matter and not of one reflecting name, image and likeness (NIL) legislation. The NCAA was seeking a reversal of the lower court while also protection under federal antitrust. But this verdict is more narrow and focuses strictly on education-related benefits.

As a result of the ruling: Schools may provide student-athletes with a level of compensation if it is used for educational purposes. This may include internships or providing laptop computers, downloadable software and online training.

“Colleges and universities across the country have leveraged sports to bring in revenue, attract attention, boost enrollment, and raise money from alumni,” Justice Neil Gorsuch wrote. “That profitable enterprise relies on “amateur” student- athletes who compete under horizontal restraints that restrict how the schools may compensate them for their play. The National Collegiate Athletic Association (NCAA) issues and enforces these rules, which re- strict compensation for student-athletes in various ways. These rules depress compensation for at least some student-athletes below what a competitive market would yield.”

It remains to be seen what level of competitive advantage one school could have over another or if a conference, for example the ACC, could put restrictions on what is and isn’t acceptable educational-related purchases. 

“The ruling by the Justices provides clarity surrounding educationally based benefits and we look forward to engaging our conference membership in our efforts to best serve and support our student-athletes,” ACC commissioner Jim Phillips said. “The Court also made it clear that the preferred pathway for resolving these issues is in the legislative process, as opposed to the courts, and we look forward to continuing our dialog with members of Congress to support our nearly 10,000 student-athletes.”

In a statement, the NCAA said: “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 the Supreme Court decision did not directly address NIL but reaffirmed his commitment “to working with Congress to chart a path forward, which is a point the Supreme Court expressly stated in its ruling.”

In Florida, legislation on name, image and likeness will become law next week — on July 1. FSU administrators and coaches have prepared for the law by hiring Apex to lead in education of athletes on what they can do under the law and how to brand themselves. A pair of classes are also being taught to athletes at the Jim Moran Institute. 

But a scathing concurrent opinion was written by Justice Brett Kavanaugh and it included some blistering thoughts on the NCAA’s model through the lens of antitrust law. One example: “The NCAA and it’s member colleges maintain important traditions that have become part of the fabric of America — game days in Tuscaloosa and South Bend; the packed gyms in Storrs and Durham; the women’s and men’s lacrosse championships on Memorial Day weekend; track and field meets in Eugene; the spring softball and baseball World Series in Oklahoma City and Omaha; the list goes on. But those traditions alone cannot justify the NCAA’s decision to build a massive money-raising enterprise on the backs of student athletes who are not fairly compensated. 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.”

The NCAA countered, in a statement to USA Today Sports, regarding Kavanaugh’s opinion: “The notable thing is that eight other justices did not agree with that and wouldn’t sign on to it,” said Jeffrey Mishkin, an outside lawyer for the NCAA. “So I don’t think that you can make very much of that concurrence. It’s his own view, and he’s writing for himself. So I think that’s just not all central to what’s been decided today.”

Also of concern are the incurred costs to the NCAA as well as member conferences and, likely, to the schools. According to the USA Today story, there is a $208 million settlement in the Alston case as well as $250 million in settlements to athletes and lawyers. Some of that has been covered by insurance, the story stated.