Supreme Court Rules Against NCAA, Opening Door To Significant Increase In Compensation For Student Athletes

Supreme Court Rules Against NCAA, Opening Door To Significant Increase In Compensation For Student Athletes

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College sports raise billions of dollars from ticket sales, television contracts and merchandise, and supporters of the students say the players are being exploited and barred from the opportunity to monetize their talents. In 2016, for example, the NCAA negotiated an eight-year extension of its broadcasting rights to March Madness, worth $1.1 billion annually.

Justice Neil Gorsuch delivered the opinion of a unanimous court, but in a concurring opinion, Justice Brett Kavanaugh said the NCAA is essentially acting “above the law” in how it treats athletes.

    “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,” Kavanaugh wrote. “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 did not immediately respond to a request for comment.

        “It is our hope that this victory in the battle for college athletes’ rights will carry on a wave of justice uplifting further aspects of athlete compensation. This is the fair treatment college athletes deserve,” Steve Berman, managing partner of Hagens Berman which represented students in the case, said in a statement on Monday.

        The ruling is the first time in decades the Supreme Court has considered the issue and is a dramatic win for a class of students who said that they were being exploited. The NCAA had argued that the spending caps at issue were necessary to preserve a distinction between amateur and pro sports.

          A district court preserved limits on compensation unrelated to education, but ruled that caps on some education-related benefits violate anti-trust laws. The ruling was largely upheld by the 9th US Circuit Court of Appeals, although the schools did not make immediate changes waiting for the legal process plays out.

          Gorsuch said that the lower court had laid out the correct “fact specific” test that judges should use to assess restrictions and he rejected a more lax standard put forward by the NCAA.

          “So, once more, if the NCAA believes certain criteria are needed to ensure that academic awards are legitimately related to education, it is presently free to propose such rules — and individual conferences may adopt even stricter ones,” Gorsuch wrote.

          The lower court also said that the NCAA must also permit student athletes to receive unlimited non-cash “education-related benefits” including post-eligibility internships. The students can also receive annual payments up to $6,000 if they maintain academic eligibility.

          Opening up to future challenges

          Steve Vladeck, CNN Supreme Court analyst and professor at the University of Texas School of Law, said Gorsuch’s opinion for the Court “repeatedly describes itself as modest, but it’s likely to be anything but.”

          “As Justice Kavanaugh’s concurrence poignantly notes, by ruling against the NCAA here, the justices have effectively undercut the central justification the NCAA uses for any number of practices that wouldn’t fly in other industries,” Vladeck said Monday.

          “The floodgates are now open to an array of claims from student-athletes — and the NCAA’s amateurism-centric business model is likely to face far larger and more wide-ranging challenges in the near future,” Vladeck added.

          Seth Wax

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