NCAA Fight on Athlete Compensation Is Supreme Court Toss-Up (1)

The National Collegiate Athletic Association got a mixed reception at the U.S. Supreme Court as the justices debated a case that could loosen the NCAA’s hold over college sports and mean greater compensation for student-athletes.

Hearing arguments by phone Wednesday, some justices suggested they would reject the NCAA’s bid for a broad antitrust shield and back a lower court decision easing the association’s limits on education-related compensation. Justice Brett Kavanaugh said the antitrust laws “should not be a cover for exploitation of the student-athletes.”

But others said they worried that a ruling against the NCAA would undermine college sports, letting athletes seek increasingly larger payments and blurring the distinction between professional and amateur athletics. Justice Clarence Thomas said universities with large budgets might be able to “cherry pick” athletes from smaller schools that can’t afford to provide more benefits.

“How do we know that we’re just not destroying the game as it exists?” Justice Sonia Sotomayor asked.

The case promises to produce the biggest Supreme Court ruling in decades for the NCAA, which is seeking to preserve what it sees as the amateur nature of college sports.

The NCAA and its biggest conferences are battling college football and basketball players who sued to let schools start paying athletes. A federal judge in California gave the group a partial victory, saying the NCAA didn’t need its limits on education-related benefits, such as computers and internships, to accomplish its professed goal of preserving college sports as a distinct product.

U.S. District Judge Claudia Wilken also said schools could provide academic achievement awards of $5,980 per athlete per year, the same amount they already can offer for athletic achievement. A federal appeals court upheld the ruling.

Billions of Dollars

The NCAA, which has overseen U.S. intercollegiate athletics since 1906, says it is trying to preserve a longstanding tradition of amateurism in college sports. That argument drew pushback Wednesday from justices who wondered whether athletes shouldn’t get a bigger share of the billions of dollars schools collect from sports.

“A great deal has changed since 100 years ago in the way that student-athletes are treated,” Justice Elena Kagan said. “I guess 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.”

Chief Justice John Roberts was more supportive of the NCAA, saying the lower court rulings could spawn a troublesome new wave of litigation against the athletic association.

“There’ll be a wide number of rules that are subject to challenge, if not in this litigation, in subsequent cases,” Roberts said. “And the effect, it seems to me, is to substitute the court’s view for the business judgment of the people” running the NCAA.

“I worry a lot about judges getting into the business of deciding how amateur sports should be run,” Justice Stephen Breyer added.

‘Stark Picture’

The 90-minute argument revealed varying perspectives among the justices about the big-money nature of college athletics.

Kavanaugh said the system amounted to schools conspiring with one another “to pay no salaries to the workers who are making the schools billions of dollars on the theory that consumers want the schools to pay their workers nothing.” He said that “just seems entirely circular and even somewhat disturbing.”

Justice Samuel Alito said the athletes had painted a “pretty stark picture” of a system that forces them to put sports ahead of academics while rewarding coaches and other school officials with massive salaries.

“So the argument is they are recruited, they’re used up, and then they’re cast aside without even a college degree,” Alito said. “So they say, how can this be defended in the name of amateurism?”

But Thomas said the $5,980 payments allowed under Wilken’s order would benefit large universities at the expense of “schools that have more modest circumstances.”

“The bigger schools would begin to cherry pick with the transfer portal the athletes from the lower schools simply because they’re able to afford this income you’re talking about,” Thomas, an avid University of Nebraska fan, told the athletes’ lawyer, Jeffrey Kessler.

The athletes, led by former West Virginia football player Shawne Alston, say the NCAA is effectively seeking an exemption from the antitrust laws.

“It is just the latest iteration of the repeatedly debunked claims that competition will destroy consumer demand for college sports and that the NCAA should have a judicially created antitrust exemption because of an imaginary revered tradition that they argue for,” Kessler said.

Biden Stance

The NCAA’s lawyer, Seth Waxman, said that courts should uphold rules that are “reasonably designed” to preserve amateurism.

“Decades of judicial experience show that that distinction is both sensible and administrable, and the alternative is perpetual litigation and judicial superintendence,” Waxman argued.

The Biden administration is backing the athletes in the case. Acting Solicitor General Elizabeth Prelogar said the NCAA hadn’t shown that its caps on education-related compensation help distinguish college sports from professional.

“So there is no procompetitive justification to deprive student-athletes of the opportunity to obtain those educational benefits through ordinary market competition,” said Prelogar, who was making her first argument as the federal government’s top lawyer at the Supreme Court.

The case reached the Supreme Court amid a push in Congress and state legislatures to let athletes earn money off the use of their names, images and likenesses. The NCAA has been developing a plan to start letting athletes earn that type of income but in January delayed a vote on the change.

The court is scheduled to rule by June in the case, NCAA v. Alston, 20-512.

(Updates with comments from Breyer, Alito, lawyers starting in 12th paragraph)

To contact the reporter on this story:
Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story:
Elizabeth Wasserman at ewasserman2@bloomberg.net

Larry Liebert

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