The Supreme Court of the United States will hear arguments about whether National Collegiate Athletic Association rules that cap the amount of financial aid athletes receive from colleges violate federal antitrust law, the court announced Wednesday.
The NCAA and some of the nation’s top Division I athletic conferences petitioned the Supreme Court in October to reverse a California federal appeals court decision, in which a panel of judges struck down limitations on athletes’ education-related aid set by the association and some conferences in the Football Bowl Subdivision, in which the nation's top football programs compete.
NCAA bylaws allow athletes to be paid by institutions up to the cost of attendance, including tuition, room and board, course materials, and other miscellaneous college-related expenses, according to the petition filed Oct. 15. Rules also allow students access to some associationwide funds, awards for academic achievement, and Pell Grants for students in need, the petition said.
The decision by the Supreme Court to review the case means that the justices are ready to address how much legal leeway the NCAA should have to develop its own set of rules for intercollegiate sports competition, said Stephen Kastenberg, a lawyer who specializes in antitrust law at Ballard Spahr. The Supreme Court previously declined in 2016 to hear a similar case to expand education-related aid for athletes.
The compensation of college athletes and NCAA restrictions on athletes’ ability to profit from their personal celebrity has recently come under public scrutiny, and federal lawmakers have debated the issue and proposed several bills that would prohibit the NCAA from disqualifying players who are paid by third parties. Kastenberg believes the Supreme Court’s ruling will have “clear implications” not just for education-related aid, but for the future of athlete compensation more broadly and the NCAA’s definition of amateurism.
“The Supreme Court isn’t interested in taking this case in order to look at a very narrow question,” Kastenberg said. “I think they’re taking the case to really look at the bigger issues -- how do you define amateurism, how do you set limits on pay and how much deference is the NCAA entitled to in making these determinations?”
While the NCAA argues that its restrictions on financial aid maintain athletes' status as amateurs, which the association says is an essential part of the college sports business model, judges in the U.S. Court of Appeals for the Ninth Circuit said in May that the limitations have anticompetitive effects. Restricting financial aid to cost of attendance causes athletes -- especially those that compete at the top level in lucrative sports such as Division I football and men’s and women’s basketball -- to be undervalued, the appeals court decision said. The judges concluded that athletes should have the opportunity to receive, for example, scholarships to pursue a graduate degree and other education-related benefits after they finish competing for a college.
Kastenberg said the Supreme Court’s interest in reviewing the appeals court decision indicates that it might be overturned in favor of the NCAA rules. It “seems like the court has some concern that the Ninth Circuit has gone too far,” he said.
In a statement released Wednesday, Donald Remy, the NCAA’s chief legal officer, cheered the news that the case would be argued before the nation’s highest court.
“We are pleased the U.S. Supreme Court will review the NCAA’s right to provide student-athletes with the educational benefits they need to succeed in school and beyond,” the release said. “The NCAA and its members continue to believe that college campuses should be able to improve the student-athlete experience without facing never-ending litigation regarding these changes.”
However, the former athletes and their legal representatives who filed the original lawsuit in 2014 were satisfied with the appeals court ruling in their favor and argued that the Supreme Court should not take another look at the case, which is named for Shawne Alston, a former football player at West Virginia University. The athletes called the NCAA’s restrictions on aid “cost-cutting measures” and said they limit athlete choice and restrict competition between colleges during athlete recruitment, according to a brief filed by the athletes' lawyers in response to the NCAA’s October petition to the Supreme Court.
“The NCAA and its member conferences and schools receive billions of dollars every year through the hard work, sweat, and sometimes broken bodies of student-athletes,” the brief said. “Yet the schools have agreed among themselves to limit what student-athletes may receive for their work in generating these extraordinary revenues.”
Jeffrey Kessler, a lawyer for the law firm Winston & Strawn who is representing the athletes, said in an email that they “welcome” the Supreme Court’s review.
“Hopefully, this will finally bring an end to the exploitation of the athletes who provide the labor for the multibillion-dollar businesses of Division I basketball and FBS football,” Kessler said, referring to the Football Bowl Subdivision.
Audrey Anderson, a lawyer for Bass, Berry & Sims and former general counsel at Vanderbilt University, said a Supreme Court ruling in favor of the athletes could result in colleges and universities redirecting funds from expensive athletic facilities and coaching salaries into resources that more directly benefit students.
“Maybe that’s a good thing,” Anderson said.
But the downside of such a ruling could be a new avenue for boosters and companies to influence where athletes attend college, which could be a threat to the amateurism model, she said. In its petition, the NCAA floated a hypothetical situation where under the expanded financial aid rules a college is paid by Nike, the sports shoe and apparel company, to support an internship for athletes, for which the student gets paid $500,000 and it’s considered “related to education.” Colleges could use such internships to attract top players, thus damaging the amateurism model, the NCAA argued.
“It’s policing those things that makes everybody kind of anxious,” Anderson said. “Is there a way to open the back door to boosters paying for your student athletes … Then will student athletes start choosing schools based on that?”
Kastenberg said the current standard for the NCAA’s antitrust protections was set by the Supreme Court in a 1984 case, when it determined that amateurism is a “defining characteristic” of college sports and allowed the association greater ability to determine its own eligibility requirements. The NCAA relies on this case to maintain that the Ninth Circuit decision “will fundamentally transform the century-old institution of NCAA sports, blurring the traditional line between college and professional athletes,” the association’s petition said.
“Under the guise of applying the rule of reason, the Ninth Circuit has made itself a tool of one viewpoint in the debate: that student-athletes should have increasing and ultimately unbounded freedom to negotiate their compensation for playing college sports,” the petition said.
The case will be heard by the Supreme Court in the new year, and a ruling is expected by the end of June 2021, The Washington Post reported.