NCAA on Compensation Ruling: Court Recognizes 'College Sports Should Be Played by Student-Athletes'

By Michael Morris | March 13, 2019 | 1:31pm EDT
NCAA Men's National Championship Trophy (left) and Duke Men's autographed National Championship basketball (right) (Photo by Chip Somodevilla/Getty Images)

In a statement on March 8, 2019 on the recent Alston decision concerning college athlete compensation and benefits, the National Collegiate Athletic Association (“NCAA”) noted that the federal court recognized “college sports should be played by student-athletes, not by paid professionals.”

“The court’s decision recognizes that college sports should be played by student-athletes, not by paid professionals,” stated Donald Remy, NCAA chief legal officer. “The decision acknowledges that the popularity of college sports stems in part from the fact that these athletes are indeed students, who must not be paid unlimited cash sums unrelated to education. NCAA rules actively provide a pathway for tens of thousands of student athletes each year to receive a college education debt-free.”

The NCAA chief legal officer continued in his statement, “Although the court rejected the plaintiffs’ desire for a free market system, we will explore our next steps as appropriate. We believe the ruling is inconsistent with the decision by the 9th Circuit Court of Appeals in O’Bannon. That decision held that the rules governing college athletics would be better developed outside the courtroom, including rules around the education-related support that schools provide.”

The statement from the NCAA followed a recent federal appeals court decision from the Ninth Circuit, leading CBS Sports writer Dennis Dodd to ask in a recent piece, “How long until conferences offer cars to athletes who do not otherwise have transportation to get to and from school?”

The Alston case was brought by “current and former student-athletes who played men’s Division I Football Bowl Subdivision (FBS) football and men’s and women’s Division I basketball” against “the National Collegiate Athletic Association (NCAA) and eleven of its conferences: that participate in FBS football and Division I basketball.” The Plaintiffs challenged “the current, interconnected set of NCAA rules that limit the compensation they may receive in exchange for their athletic services,” further contending “that these limits on compensation … violate federal antitrust law, because Plaintiffs would receive greater compensation in exchange for their athletic services in the absence of these artificial limits.”

Judge Claudia Wilken ruled in favor of the Plaintiff class, noting the “great disparity between the extraordinary revenues that Defendants garner from Division I basketball and FBS football, and the modest benefits that class members receive in exchange for their participation in these sports relative to the value of their athletic services and the contributions they make.”

Judge Wilkens added, “Restricting non-cash education-related benefits and academic awards that can be provided on top of a grant-in-aid has not been proven to be necessary to preserving consumer demand for Division I basketball and FBS football as a product distinct from professional sports,” and therefore, “[a]llowing each conference and its member schools to provide additional education-related benefits without NCAA caps … will help ameliorate their anticompetitive effects and may provide some of the compensation student-athletes would have received absent Defendants’ agreement to restrain trade.”

The Ninth Circuit ordered a permanent injunction, stating in pertinent part the following (emphasis added in italics):

“[The NCAA] are hereby permanently restrained and enjoined from agreeing to fix or limit compensation or benefits related to education that may be made available from conferences or schools to Division I women’s and men’s basketball and FBS football student-athletes on top of a grant-in-aid.

“The compensation and benefits related to education provided on top of a grant-in-aid that the NCAA may not agree to fix or limit pursuant to paragraph 1 of this Order are the following: computers, science equipment, musical instruments and other tangible items not included in the cost of attendance calculation but nonetheless related to the pursuit of academic studies; post-eligibility scholarships to complete undergraduate or graduate degrees at any school; scholarships to attend vocational school; tutoring; expenses related to studying abroad that are not included in the cost of attendance calculation; and paid post-eligibility internships.

“… [T]he NCAA may adopt, enact or agree to, now or in the future, a definition of compensation and benefits that are ‘related to education’ for the purpose of complying with this injunction. It the NCAA chooses to adopt, enact, or agree to any such definition, the nCAA may move to amend this injunction to incorporate that definition. …”

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