Supreme Court rules against NCAA in landmark antitrust case
The account arrives. It hasn’t happened yet, but it is.
On Monday, a United States Supreme Court unanimously (when is the Supreme Court ever unanimous on anything?) ruled against the NCAA on whether antitrust laws apply to rules restricting the benefits a school can offer to student-athletes.
The result is limited, but the future implications could be very broad. For now, schools should be allowed to compete for student-athletes by offering educational benefits beyond undergraduate tuition, room, board, fees and books. The enhanced education benefits of a given school can no longer be considered prohibited by the NCAA, a rule that the Supreme Court has found violates antitrust laws.
Justice Gorsuch delivered the opinion of the nine-member court. A concurring opinion (essentially, agreement but an articulation of different reasons) from Judge Kavanaugh has attracted and will continue to attract more attention than the main submission.
In his concurring opinion, Justice Kavanaugh essentially calls the NCAA what it is and what it has been for decades: a golden egg factory that refuses to properly compensate geese.
“The NCAA has long limited the compensation and benefits that student athletes can receive,” writes Justice Kavanaugh. “And with surprising success, the NCAA has long protected its compensation rules from ordinary antitrust reviews. Today, however, the court finds that the NCAA violated antitrust laws. The Court’s decision marks a significant and belated course correction, and I fully agree with the excellent opinion of the Court.
Justice Kavanaugh explains that his separate opinion is intended to underscore the fact that beyond the rules at issue in this case, “the remaining NCAA compensation rules also raise serious questions under antitrust laws.”
“The NCAA makes its case for not paying student athletes under harmless labels,” he wrote. “But labels can’t hide the reality: The NCAA business model would be downright illegal in almost every other industry in America. Not all restaurants in a region can unite to reduce cook wages based on the theory that “customers prefer” to eat food from poorly paid cooks. Law firms cannot conspire for cabin attorney salaries in the name of providing legal services out of “love of the law”. Hospitals cannot agree to cap nurses’ income in order to create a “purer” form of patient care. News organizations cannot join forces to reduce journalists’ salaries in order to preserve a “tradition” of public-minded journalism. The film studios cannot agree to reduce the advantages of film crews in order to ignite a “spirit of amateurism” in Hollywood. “
Amen to it all. And those words will set the stage for broader and more aggressive attacks on a system that has allowed different universities to fill their coffers full of money, pay everyone who participates in its sports programs except athletes, and to continue to inexplicably delay the time when those who deserve to receive real financial rewards for the billions of their talents, efforts and sacrifices will ultimately be treated fairly.
“The pricing job is the pricing job,” says Justice Kavanaugh. “And the pricing of labor is generally a classic antitrust problem because it extinguishes the free market in which individuals can otherwise get fair compensation for their labor. . . . Companies like the NCAA cannot avoid the consequences of pricing labor by incorporating fixed-price labor into the definition of the product.
Here’s Judge Kavanaugh’s kicker, the ultimate truth that the NCAA ran from: “The bottom line is that the NCAA and its member colleges are cutting the salaries of student-athletes who collectively generate billions of dollars in college revenue. every year. These huge sums of money apparently go to everyone except student athletes. College presidents, athletic directors, coaches, conference commissioners, and NCAA officers earn six- and seven-figure salaries. Colleges are building lavish new facilities. But the income-generating student athletes, many of whom are African American and from low-income backgrounds, end up with little or nothing. “
The NCAA tries to hide behind the idea that there is magic or purity in amateur athletics and the traditions it has spawned. This facade is starting to crumble. Judge Kavanaugh takes a flamethrower there.
“[T]Pipe traditions alone cannot justify the NCAA’s decision to create a massive fundraising business on the backs of student athletes who are not being fairly paid, ”writes Justice Kavanaugh. “Nowhere else in America can companies agree to not paying their workers at the fair market rate on the assumption that their product is defined by not paying their workers at the fair market rate. And under ordinary antitrust law principles, it’s not clear why college sport should be any different. The NCAA is not above the law.
No, this is not the case. And the NCAA surely knew that before today. About a decade ago, as the company began to ask tough questions about a billion dollar company that does not fairly pay its most important workers, the NCAA likely realized the account would come a day. The aim was to delay it as long as possible.
Today’s ruling shows the NCAA and its members will benefit from several additional budget cycles without line items for field labor costs. Justice Kavanaugh’s concurring opinion shows the NCAA can work, but it can’t hide.