Explainer: Why is the NCAA at the Supreme Court?

If you’re a fan of one of the many NCAA member institutions in our area, you may be wondering why the NCAA recently appeared before the United States Supreme Court. If so, here’s a quick explainer. The case I’m referring to is National Collegiate Athletic Association v. Alston, and its oral argument was heard by the US Supreme Court on March 31. To begin, it’s important to know what the case is not about: it is not about athlete’s rights to receive compensation for their name, image, and likeness (NIL) while in school, which has been in the news frequently over the last few years. Instead, the case involves antitrust law, and specifically concern the NCAA’s rules restricting the amount of non-cash education related benefits that athletes may receive.  The case began in 2014 as a class action lawsuit against the NCAA and several of its conferences, where the Plaintiffs argued that the NCAA’s restrictions on eligibility and compensation violate federal antitrust laws because the restrictions prevent college athletes from receiving fair-market compensation in exchange for their labor. Eventually, the case was decided by a federal court in the Northern District of California, where the Court held that NCAA rules restricting education-related benefits were unlawful restraints of trade in violation of the Sherman Antitrust Act. Importantly though, the District Court also found that the NCAA could continue to restrict benefits unrelated to education. On appeal, the Ninth Circuit Court of Appeals agreed with the District Court, upholding its ruling, and the NCAA successfully petitioned the US Supreme Court to review the case.  As mentioned above, from a legal standpoint this is an antitrust case. Generally speaking, antitrust law seeks to promote free competition in the marketplace. The NCAA has argued that what makes the NCAA unique is the amateur (i.e. unpaid) status of its competitors, and that this amateur status promotes competition by allowing consumers to choose between watching college or professional sports. Also, the NCAA has relied on another Supreme Court case from 1984, NCAA v. Board of Regents of University of Oklahoma, where the Court noted that the NCAA should be given deference with respect to antitrust laws. Further, the NCAA has argued that it isn’t really a commercial venture at all but rather an association of schools that further a broader education purpose; pointing to several of its policies that clearly do not maximize revenues, like requiring member schools to have teams in various sports. According to the NCAA, its product is the amateur nature of athletes themselves, and that distinction between collegiate and pro sports is inherently procompetitive.  On the other hand, the athlete Plaintiffs argue that the NCAA really is asking for an antitrust exemption, and that it isn’t possible to argue that the NCAA isn’t commercial given that coach salaries and television contracts are measured in millions and billions of dollars, respectively. The athletes say that the substantive exemption from antitrust law that the NCAA seeks is better to be determined by Congress than the courts. The athletes also argue that despite the NCAA’s reliance on NCAA v. Boardof Regents of University of Oklahoma, that case is highly distinguishable given the evolution and monetization of collegiate sports since 1984. Additionally, the athletes say that the NCAA’s argument that its restrictions are necessary to preserve amateurism, which is purportedly what enhances competition in the NCAA’s eyes, is inadequate. Instead, the athletes believe that the NCAA’s rules are much more restrictive than necessary to preserve demand for college sports as a distinct product.  The NCAA faced what many consider to be a tough line of questioning at oral argument on March 31. However, a decision likely will not be announced in the case until summer. Until then, remember these points: 1) this is not an NIL case, and doesn’t directly deal with athletes’ ability to seek endorsement opportunities, 2) at present, the athletes are only seeking review with respect to education-related compensation, in accordance with the lower court rulings, and 3) the most significant legacy of the case may wind up being its effect on future cases, as its outcome will become binding precedent that both athletes and the NCAA will have to grapple with.  R. Austin Stevenson focuses his practice on general corporate and business law, litigation, labor and employment, and real estate. Originally from Wheelersburg, Ohio, he earned his bachelor’s degree in Political Science from NKU and his law degree from University of Kentucky College of Law. He can be reached at rastevenson@strausstroy.com or by phone at 513-768-9745.