U.S. Supreme Court Scores Home Run for Collegiate Athletes

Just in time for our nation’s 245th birthday, the U.S. Supreme Court issued an opinion striking out at the National Collegiate Athletic Association’s (NCAA) ability to interfere with collegiate athletes who want to make money. In National Collegiate Athletic Association, v. Alston, the NCAA was enjoined from interfering with certain money-making rights of amateur athletes. In a nutshell, the Supreme Court decided that many of the NCAA rules were in violation of the Sherman Antitrust Act.

How did the NCAA become subject to the Antitrust Act? The NCAA, for all its lofty ideals of promoting the amateur collegiate athlete, in reality exists to make money. To believe the NCAA is not big business is basically to deny the money and power of the organization.

The NCAA’s playbook is relatively new in the world of “amateur” collegiate sports. The Supreme Court traced “pay for play” back to the 1852 Harvard-Yale boat race at Lake Winnipesaukee, New Hampshire.

Organized by a prescient train company executive wanting to promote train travel to Lake Winnipesaukee, this was to be no ordinary boat race. With students getting gifts, free trips and all the liquor they could drink, it was quite a hit. Combine this with the fact that lake resort vacationers could socialize with the carefree and exciting athletes, by the end of the century, the race was attracting 40,000 people and generating impressive ticket sales of over $25,000. In a sense, March Madness was born on a lake.

The Supreme Court found that everyone involved in collegiate sports from NCAA executives to college coaches to television networks was making money. Lots of money. There was only one glaring exception – the student-athletes who actually played the game. They were not allowed to make money. Judge Brett Kavanaugh’s concurring opinion summed it up like this:

“In short, the NCAA and its member schools have the power to restrain student-athlete compensation in any way and at any time they wish, without any meaningful risk of diminishing their market dominance…Price-fixing labor is price-fixing labor. And price-fixing labor is ordinarily a textbook antitrust problem because it extinguishes the free market in which individuals can otherwise obtain fair compensation for their work.”

With ice in their veins, the NCAA stood before the Supreme Court and made a lofty pitch. As they were the sole protectors of the fundamental American value of “amateur” athletics they had to be awarded “judicially ordained immunity” to protect the institution. If they couldn’t write the rules the way they wanted, consumers would not attend collegiate sporting events. In antitrust terms, consumers would cease to buy the NCAA’s product, collegiate sports, because the public would not be interested in “pay for play” collegiate sports.

The court found that the NCAA’s product, collegiate sports, would still flourish regardless of the ability of athletes to make money. Consumers are not going to stop rooting for their team simply because the players could make money. The NCAA failed in its quest for immunity because:

“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.”

Is there any chance the NCAA could win this game? For the antitrust laws to not apply would literally require an act of Congress. The Supreme Court’s message was clear – if fans want the NCAA to get a mulligan, the law will have to be changed.

This article first appeared in The Journal Record on July 30, 2021, and is reproduced with permission from the publisher.


Associated People:

Madalene A.B. Witterholt

Practice Area:

Labor & Employment