Supreme Court Hears Arguments For and Against Athlete Pay

U.S. Supreme Court justices seem skeptical of the argument that sports fans will lose interest in Division I games if college athletes are permitted to receive compensation in the form of financial aid and other benefits for playing.

The justices made their doubts clear during a hearing Wednesday for a case involving the National Collegiate Athletic Association, which opposes compensating college athletes. The hearing was held via conference call, and the justices acknowledged concerns by athletes that they are being exploited for their talents, but the justices questioned whether that's reason enough to rule in their favor. The athletes contend that the NCAA’s limits on education-related financial aid violate antitrust law, while the association maintains that its restrictions are essential for its business model.

A class of athletes sued the NCAA in 2014 in U.S. District Court for the District of Northern California, accusing the association and its member institutions of collectively restricting aid as a way to reduce their spending. The federal district court ruled in the athletes' favor, and the U.S. Court of Appeals for the Ninth Circuit last year upheld the lower court's ruling.

The U.S. District Court determined that the association may not restrict certain member institutions in Division I athletics from granting “non-cash education-related benefits” to athletes, a ruling that opened the door for athletes to receive financial aid for expenses such as study abroad trips, graduate study or internships. Under current NCAA bylaws, athletes may only be given financial aid equal to the cost of the colleges they attend.

Seth Waxman, an attorney for the NCAA, argued that the association’s long-held belief that loosening restrictions on financial awards to athletes would undermine the NCAA’s “product,” sports played by unpaid amateurs. He said fewer college sports fans would want to watch games if the line is blurred between student and professional athletes. He also reasoned that the NCAA has good, “pro-competitive” reasons for restricting even education-related payments across all of its institutions.

“Whatever their labels are, these new allowances are akin to professional salaries,” he said. “Especially given the truly unique history here, a rule that is reasonably designed to preserve amateurism, as the NCAA has defined it, should be upheld.”

Waxman was referring to the NCAA’s 116-year history of maintaining what he characterized as "integrity and the social value of college athletics," as well as a previous 1984 Supreme Court ruling that said amateurism is a "defining characteristic" of college sports and granted the NCAA leeway to determine its own bylaws.

The justices seemed unimpressed by Waxman's arguments at the hearing yesterday. Several of them questioned why awards tied to education would violate the NCAA’s stated amateurism values and why the association should be allowed to continue upholding its unique definitions of “pay” and “amateurism.”

“A great deal has changed,” Associate Justice Elena Kagan said. “It doesn't move me all that much that there's a history to this, if what is going on now is that competitors as to labor are combining to fix prices.”

The skepticism expressed by some of the justices is a positive signal for opponents of the NCAA's position, but it is too early to draw conclusions about how the court will rule, said Audrey Anderson, a lawyer for Bass, Berry & Sims and former general counsel at Vanderbilt University. She said several justices seemed torn and concerned about how their decision could disrupt and dismantle the college sports model.

Anderson noted that even the court’s conservative justices expressed a negative view of Waxman’s argument. Early in the hearing, Associate Justice Clarence Thomas questioned why the NCAA’s amateurism standards apply only to athletes and not coaches.

“It just strikes me as odd that the coaches’ salaries have ballooned and they're in the amateur ranks, as are the players,” Thomas said.

Associate Justice Samuel Alito, another conservative member of the court, noted claims by athletes and their advocates, who consider the amateurism model to be exploitative due to the exploding revenues that leading football and basketball programs bring to Division I institutions, while colleges are restricting the amount of aid or other benefits they give to athletes. Alito cited the immense pressure to perform that athletes in money-making sports face and the “shockingly low” graduation rates among the players.

“This money funds enormous salaries for coaches and others in huge athletic departments, but the athletes themselves have a pretty hard life,” he said. “The argument is they are recruited, they're used up, and then they're cast aside without even a college degree. So they say, how can this be defended in the name of amateurism?”

Associate Justice Brett Kavanaugh, also a conservative, said “antitrust laws should not be a cover for exploitation of the student athletes,” adding, “That is an overarching concern here.”

However, some justices also voiced concern about opening the door to further litigation that could chip away at and eventually destroy the collegiate sports model. Chief Justice John Roberts Jr. said he could foresee a ruling in favor of the athletes loosening more of the NCAA’s boundaries.

“It's like a game of Jenga. You've got this nice solid block that protects the sort of product the schools want to provide, and you pull out one log, and then another,” Roberts said. “All of a sudden, the whole thing comes crashing down.”

Len Elmore, a former Division I basketball player and co-chair of the Knight Commission on Intercollegiate Athletics, an organization that advocates for reforming NCAA governance, among other things, and putting more focus on academics, was disappointed there was not more discussion about the educational side of college athletics during the hearing.

He criticized the athletes’ legal argument for being largely focused on the concept of labor and payment, rather than educational benefits. Even if the court rules in favor of athletes and permits them to receive more financial aid, it won’t fix the contradiction between the NCAA’s stated values and its actions, including the way the association and the College Football Playoff distributes wealth, Elmore said.

“Whatever the outcome is going to be, it’s not the silver bullet that will solve the problems of college sports,” he said.