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Compensating College Athletes: Moving the Ball Forward

Aug. 12, 2021, 8:01 AM

In a unanimous decision, the U.S. Supreme Court rejected the NCAA’s arguments that its system of “amateurism” should receive blanket protection under the antitrust laws. The court altered the rules of the game for compensation of college athletes, and signaled that more change may be on the way through future litigation.

The court’s opinion in NCAA v. Alston, written by Justice Neil Gorsuch, sets the stage for colleges and conferences to exercise leadership in moving the ball forward in a thoughtful, fair, and practical way.

NCAA Lost Touch With the Needs of Student Athletes

In Alston, the court upheld a lower court’s injunction against restrictions on education-related compensation to student-athletes. Subjecting the NCAA to the same antitrust rules as other organizations, it rejected its own comment in a 1984 opinion that “there can be no question” that the NCAA needs “ample latitude” to play its “critical role in the maintenance of a revered tradition of amateurism in college sports.”

The court’s newfound skepticism is warranted. The NCAA had sought the protection of a “revered tradition” of amateur college play without providing a consistent meaning for “amateurism.” While the NCAA in this case did not even argue that its rules served the interests of student-athletes, and instead defended its rules on the ground that consumers (sports fans) preferred an amateur product, the organization has not always focused on the interests of the spectator over those of the athlete.

The NCAA was founded in 1906 to protect student-athletes, but it has undeniably lost touch with this mission along the way. The Alston decision provides notice that it is time for the NCAA to regain its focus on the interests of student athletes—and enact rules that not only financially reward athletic participation but also protect and support the academic benefits promised to student athletes.

NCAA Rules Should Not Revolve Around Its Financial Interest

NCAA rules should no longer revolve around the protection of their own financial interests. These sentiments are broadly supported by Justice Brett Kavanaugh in his concurrence, which rejects the NCAA’s defense of its “amateurism” system. Kavanaugh stated the following: “In my view, that argument is circular and unpersuasive,” and, “the NCAA’s business model would be flatly illegal in almost any other industry in America.”

Kavanaugh’s concurrence makes an important and practical point about capitalism in the U.S. In this nation, we believe that each individual should enjoy the right to share in the profits of his or her labor. The court’s decision in Alston anticipates further scrutiny of non-education compensation of student-athletes, including fair compensation for work performed.

Alston marks a historic moment and a turning point, but this is only the beginning. This case represents an opportunity for the NCAA and its conferences to exercise leadership. NCAA governance bodies took an important first step on June 30, adopting a uniform interim policy suspending NCAA name, image and likeness (NIL) rules for all incoming and current student-athletes in all sports—but much more needs to be done.

NCAA Business Model Should Serve Educational Needs

The NCAA’s suspension on NIL restrictions does not resolve the broader issue with the “amateur” system, or absolve the NCAA’s need to further enhance its business model to serve the educational interests of college athletes.

If the NCAA wants to create a system of true amateurism, then it must lead all stakeholders, including Congress, in proposing and implementing the following fair and pragmatic reforms:

  • Lifting limits on financial aid for student-athletes and expanding funding for educational pursuits;
  • Enforcing limitations on mandatory sport-related activities;
  • Providing student-athletes with the ability to negotiate and profit from commercial licensing agreements; and
  • Granting student-athletes freedom to form a players’ associations, and be represented by legal counsel.

Improving Transparency With Students

As for transparency, the NCAA should consider:

  • Requiring member schools to institute and enforce more rigorous academic requirements for student-athletes;
  • Prohibiting member schools from creating academic courses offered solely to student-athletes;
  • Prohibiting member schools from providing recruits with forecasts or projections as to their future professional sports prospects;
  • Requiring member schools to disclose to all potential recruits the percentages of student-athletes from that particular school, that school’s conference, and the entire NCAA who have successfully been drafted onto professional sports teams after playing in the NCAA for the past 10 academic years, and indicate which level of professional sports team for each alumnus (i.e., indicate if an alumnus reached minor league baseball or if they reached the major league);
  • Requiring member schools to disclose to all potential recruits the true time commitment for a player on the school’s NCAA team—inclusive of conditioning and travel;
  • Requiring member schools to have in place a comprehensive well-being program;
  • Requiring member schools to disclose the graduation rates of the general undergraduate population and the student-athlete population; and
  • Requiring member schools to disclose the transfer rates of the general undergraduate population and the student-athlete population.

If the NCAA can execute on the objectives enumerated above and work proactively and collaboratively, with universities and student-athletes, to improve the financial and non-financial benefits to student-athletes, the best interests of all parties, including the NCAA, will be served.

The alternative in the best case would be involve years of additional litigation, a patchwork of state laws, all with uncertain results and potential remedies that in the long run may not serve the best interests of any of the parties or amateur sports in general.

The alternative in the worst case could mean the death of the NCAA and the amateurism system as we know it.

This column does not necessarily reflect the opinion of The Bureau of National Affairs,Inc. or its owners.

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Author Information

Braeden Anderson is an associate with Sidley Austin LLP. He played basketball for the Seton Hall Pirates where he won the Big East Conference Championship while attending law school.

Michael Schmidtberger is chairman of Sidley’s Executive Committee.

This article has been prepared for informational purposes only and does not constitute legal advice. This information is not intended to create, and the receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this without seeking advice from professional advisers. The content therein does not reflect the views of the firm.

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