Teeing up an appeal that could either upend or reinforce the NCAA’s model of amateurism for college athletics, the U.S. Supreme Court on Wednesday agreed to review a Ninth Circuit decision holding that limits on education-related benefits for student athletes are unreasonable restraints of trade under the Sherman Antitrust Act.
In Alston v. NCAA, which the Ninth Circuit decided in May, a three-judge panel affirmed the district court’s finding that non-cash, education-related benefits — such as postgraduate scholarships, tutoring, and educational supplies — could not be confused with a professional athlete’s salary, and that limiting these benefits is anticompetitive.
The NCAA had contended that its cap on education-related benefits preserves amateurism and is therefore pro-competitive, because it widens consumer choice by maintaining a distinction between college and professional sports.
In its ruling, the Ninth Circuit declined to hold that the NCAA’s limits on benefits unrelated to education constituted antitrust violations. It also held the litigation, brought by a group of college football and basketball players, wasn’t foreclosed by the Ninth Circuit’s landmark ruling in O’Bannon v. NCAA (9th Cir. 2015) 802 F.3d 1049, in which the court upheld the district court’s finding that the NCAA illegally restrained trade by preventing certain student athletes from being compensated for their names, images, and likenesses. The Supreme Court decided to leave that ruling in place in 2016.
Although it’s rigorously maintained that college athletes are amateurs and not professionals, the NCAA has recently shown it’s open to change on the compensation issue. In April, its board of governors announced that it supports changes to the NCAA bylaws to allow student athletes to be compensated for their names, images, and likenesses.
The rule change, expected to take effect at the beginning of the 2021-2022 academic year, opens the door for college players to make money from endorsements and promotions. Each NCAA division has developed proposals to implement the change, and there will be a vote on new bylaws in each division at the NCAA Convention in January.
The NCAA’s decision to consider the change is widely believed to have been spurred by California’s passage last year of the Fair Pay to Play Act, set to take effect in 2023. After Gov. Newsom signed the bill into law last September, the NCAA conceded that “changes are needed to continue to support student-athletes, but improvement needs to happen on a national level through the NCAA’s rules-making process.”
The case is NCAA v. Alston, case number 20-512, in the Supreme Court of the United States.
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