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The Supreme Court Rules in Favor of College Athletes in Compensation Fight with the NCAA

June 24 2021

In a unanimous ruling (9-0), the Supreme Court affirmed lower court rulings that found that the NCAA violated antitrust laws by putting restrictions on payments and benefits colleges and universities could give to student athletes.  The ruling, penned by Justice Neil Gorsuch, permits schools to compensate their athletes in any manner they deem fit, so long as it is connected to their education.

Gorsuch’s opinion limited the scope of its decision to benefits related to education and did not tackle the separate and ongoing dispute over whether the NCAA can restrict the ability of student athletes to receive compensation for endorsement deals, advertising, appearances or other commercialization of their name, image and likeness (NIL) rights. This omission was noted and addressed in a comment by NCAA president Mark Emmert, who said, “Even though the decision does not directly address name, image and likeness, the NCAA remains committed to supporting NIL benefits for student-athletes.”

However, the court may not care too much for NCAA’s support, or lack thereof, as a concurring opinion by Justice Brett Kavanaugh went further and included a scathing review of whether restrictions on endorsements and NIL rights would be enforceable under similar pretenses.  Kavanaugh’s opinion stated:

“Everyone agrees that the NCAA can require student athletes to be enrolled students in good standing. But the NCAA’s business model of using unpaid student athletes to generate billions of dollars in revenue for the colleges raises serious questions under the antitrust laws. In particular, it is highly questionable whether the NCAA and its member colleges can justify not paying student athletes a fair share of the revenues on the circular theory that the defining characteristic of college sports is that the colleges do not pay student athletes. And if that asserted justification is unavailing, it is not clear how the NCAA can legally defend its remaining compensation rules.

Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate.  And under ordinary principles of antitrust law, it is not evident why college sports should be any different.  The N.C.A.A. is not above the law.”

So while the matter before the Supreme Court may have been limited to how colleges and universities compensate their student athletes with respect to expenses related to education, further challenges to other compensation restrictions put forth by the NCAA may expect to receive some difficult scrutiny if they wind up before the same justices.  And the fact that the ruling was unanimous, in these altogether divisive times, shows that this is not a partisan issue, and one that all sides of the spectrum can agree on.  The time for many of the restrictions the NCAA puts on student athletes is coming to an end.  Gabe Feldmen, Director of Sports Law at Tulane University stated, “The longer term concern for the N.C.A.A. is if enough justices and federal justices join with Justice Kavanaugh’s view.  It could only be a matter of time before all of the N.C.A.A.’s restrictions on compensation are struck down as antitrust violations.”

Many expect the NCAA to take imminent action on making changes to these restrictions, particularly as at least 20 states have put laws on the books permitting student-athletes to take advantage of their NIL rights. This ruling by the Supreme Court may just be the final tipping point in pushing through an end to the iron grip the NCAA has had over restricting compensation of student athletes under the guise of amateur athletics.