Supreme Court unanimously sides with former college players in dispute with NCAA about compensation

June 21, 2021, 12:09 PM

The Supreme Court of the United States unanimously affirmed a ruling Monday that provides for an incremental increase in how college athletes can be compensated and also opens the door for future legal challenges that could deal a much more significant blow to the NCAA's current business model.

Justice Neil Gorsuch wrote the court's opinion, which upheld a district court judge's decision that the NCAA was violating antitrust law by placing limits on the education-related benefits that schools can provide to athletes. The decision allows schools to provide their athletes with unlimited compensation as long as it is some way connected to their education.

Gorsuch wrote that the nation's highest court limited the scope of its decision on those education-related benefits rather than delving further into questions about the association's business model. Justice Brett Kavanaugh published a concurring opinion that takes a harder line, suggesting that the NCAA's rules that restrict any type of compensation -- including direct payment for athletic accomplishments -- might no longer hold up well in future antitrust challenges.

"The NCAA is not above the law," Kavanaugh wrote. "The NCAA couches its arguments for not paying student athletes in innocuous labels. But the labels cannot disguise the reality: The NCAA's business model would be flatly illegal in almost any other industry in America."

The idea that college athletes should not be paid, a fundamental tenet of the 115-year-old NCAA, has faced increasing scrutiny in recent years. Federal antitrust lawsuits have slowly eroded strict amateurism rules during the past decade. Politicians in 19 states have passed laws in the past two years that rebuke the organization's rules and will soon allow athletes to start making money from third-party endorsements, and members of Congress are currently debating at least a half-dozen bills aimed at reforming the NCAA. Monday's ruling in the NCAA v. Alston case represents another blow during a particularly uncertain time for the future of amateurism.

"It's tremendous to win this 9-0," lead plaintiff's attorney Jeffrey Kessler told ESPN Monday morning. "Hopefully it will be the major next step on the road to a true fair competitive system for these athletes."

The Alston ruling marks the first time in more than 30 years that the Supreme Court has weighed in on the governance of college sports. In 1985, the court upheld a ruling in the NCAA v. Board of Regents of Oklahoma University case that the NCAA was breaking antitrust laws by limiting the amount of times that individual schools could appear on television. The resulting change led to an explosion in media rights revenue that has reshaped the top tier of college sports. The Regents case in 1985 found that the NCAA was illegally restricting the earning potential of individual schools. The Alston ruling this week affirms that the NCAA has been illegally restricting the earning potential of individual athletes.

Despite ruling against the NCAA in 1985, the court's opinion in that case -- written by Justice John Paul Stevens -- said the association should still be given "ample latitude" to make rules that it feels are best suited to preserve amateurism and the educational benefits that come with it. The NCAA's appeal in the Alston case argued that a judge's decision in district court unfairly stripped them of the ample latitude they need to make their own rules.

The NCAA asked the Supreme Court to review a case first filed in 2014 by former West Virginia football player Shawne Alston. Judge Claudia Wilken ruled in the Alston case in 2019, determining that schools should be able to provide their athletes with educational equipment, study abroad programs, internships and even cash rewards in exchange for academic accomplishments. The NCAA's attorneys argued that these measures were "micromanaging" rules that should be determined by the NCAA's members and that the added benefits were "akin to professional salaries." 

"Even though the decision does not directly address name, image and likeness, the NCAA remains committed to supporting NIL benefits for student-athletes," NCAA president Mark Emmert said in a statement. "Additionally, we remain committed to working with Congress to chart a path forward, which is a point the Supreme Court expressly stated in its ruling."

Kavanaugh wrote a concurring opinion to underscore that while the court's ruling was narrow in this case, "the NCAA's remaining compensation rules also raise serious questions under the antitrust laws."

"All of the restaurants in a region cannot come together to cut cooks' wages on the theory that 'customers prefer' to eat food from low-paid cooks," Kavanaugh continued. "Law firms cannot conspire to cabin lawyers' salaries in the name of providing legal services out of a 'love of the law.' Hospitals cannot agree to cap nurses' income in order to create a 'purer' form of helping the sick. News organizations cannot join forces to curtail pay to reporters to preserve a 'tradition' of public-minded journalism. Movie studios cannot collude to slash benefits to camera crews to kindle a 'spirit of amateurism' in Hollywood. Price-fixing labor is price-fixing labor."

Alston and his attorneys argued that any restrictions placed on what schools can offer to their athletes as compensation were illegal. New antitrust lawsuits that raise similar arguments against the NCAA already have been filed.

Steve Berman, who was co-counsel in the Alson case, also is currently leading a lawsuit that challenges any limits the NCAA is putting on future name, image and likeness opportunities for college athletes. Berman told ESPN on Monday that his firm is considering amending its complaint to be more aggressive, asking the court to remove any restrictions on the type of compensation schools can provide to their athletes.

"In light of Justice Kavanaugh's comments, we're rethinking whether we should once again challenge pay for play," Berman said. "Kavanaugh is suggesting you should go after everything."

The NCAA has asked Congress for help in carving out a limited antitrust exemption that would protect it from some future legal claims while allowing the organization to continue to put some restrictions on how athletes can be compensated, which it says is an important step in maintaining a distinction between pro and college sports. Thus far, many members of Congress have been reticent to grant them an exception.

"Today's Supreme Court ruling highlights just how much the tide is turning against the NCAA and its unfair treatment of college athletes," said Sen. Chris Murphy, D-Connecticut, who has been one of the association's most outspoken critics on Capitol Hill. "The status quo on 'amateurism' is finally changing and the NCAA no longer has carte blanche to control athletes' livelihoods and monopolize the market. This is the kind of justice, and basic rights, college athletes deserve."