In a much-anticipated decision, the Supreme Court unanimously ruled against the NCAA proclaiming that the NCAA violated antitrust laws by limiting education related benefits to student-athletes. While NCAA v. Alston was a relatively narrow decision, it could open the door for major changes to college athletics in the near future.
To be clear, this decision did not rule on issues relating to paying athletes for performance or allowing them to earn money from endorsements. The Supreme Court’s decision only dealt with whether colleges could provide educational perks without limitations to student-athletes, like free laptops, tutoring, equipment/instruments, disability insurance, scholarships, or paid internships.
In this case, former college football players brought suit against the NCAA saying the governing body of college sports violated Section 1 of the Sherman Antitrust Act by engaging in restraints of trade or commerce. Interestingly, the NCAA did not dispute the key facts regarding restraints and instead argued that these restraints were necessary to preserve amateurism.
The NCAA tried to argue that the institution was largely exempt from antitrust laws because of its mission to ensure that there was a clear distinction between college and professional sports. However, in the decision, the Supreme Court noted that NCAA rules were not reasonably necessary to distinguish between college and professional sports. Moreover, Justice Neil Gorsuch stated that this argument was particularly weak given the fact that “this suit involves admitted horizontal price fixing in a market where the defendants exercise monopoly control.”
Justice Brett Kavanaugh further emphasized that the NCAA’s business model would be “flatly illegal in almost any other industry in America.” For example, Kavanaugh presented several comparisons, saying restaurants could never legally be allowed to agree to cut wages of cooks because consumers prefer to eat food from low-paid chefs or that lawyers would never be allowed to put a cap on lawyer salaries under the belief that lawyers should not have big salaries because they are working for the love of the law. In his concurring opinion, Kavanaugh frankly stated “price-fixing labor is price-fixing labor. And price-fixing labor is ordinarily a textbook antitrust problem because it extinguishes the free market in which individuals can otherwise obtain fair compensation for their work.”
With this decision, schools and conferences can theoretically offer different educational benefits than their competitors in the near future. Student-athletes may soon have to consider each university’s educational perks when deciding where to commit. This adds yet another layer of competition between schools.
