The NCAA will be back in court Tuesday in California, defending its amateurism rules against plaintiffs who say capping compensation at the value of a scholarship violates federal antitrust law (Ralph D. Russo, Associated Press). Amateurism rules are complex, but not hard to break. The rules state that athletes cannot receive compensation that exceeds actual and necessary expenses. Antitrust law and Sherman Act. “The panel held that even though many of the NCAA’s rules were likely to be procompetitive, they were not exempt from antitrust scrutiny and must be analyzed under the Rule of Reason” (O’Bannon V. NCAA). The plaintiffs are insinuating that the NCAA is illegally restricting colleges from paying athletes beyond what’s covered by their scholarships. This is where the Sherman Anti-Trust Act comes into the situation versus monopolistic business practices compared to “the restraint is justified by some Pro-competitive justification” (Ralph D. Russo, Associated Press, Steve Berman).
Steve Berman states that the court says the caps on compensation are anti-competitive and restraint on trade in the NCAA. Plaintiffs are stating that paying college athletes will not hurt college sports or for that matter, change college sports forever. The NCAA having a set price on “athlete payment” contradicts the act by saying that the Sherman Act is in place because companies can band together or out pay one another because there are no set market prices. Amateurism Rules are in place in the NCAA so that pay-for-play situations do not happen which would change college sports (Ralph D. Russo). Loopholes are being “reached” or “stretched” in this case, due to the entire case being based off a what if. What this means is that no one can predict the future, for that matter to say the NCAA will or will not change. No one truly knows if college sports would or would not change for the better if college athletes get “paid”. This case will have to lean on analytical judgment and have a majority vote to pass a verdict. Judge Claudia Wilken will decide the outcome, however, the case will have a mixed ruling most likely and be sent to the Ninth Circuit Court of Appeals to have the final say much like the O’Bannon case.
In the O’Bannon case in 2015, “the panel affirmed in part and reversed in part the district court’s judgment after a bench trial in an antitrust suit regarding the National Collegiate Athletic Association’s rules prohibiting student-athletes from being paid for the use of their names, images, and likenesses” (O’Bannon V. NCAA Court OF Appeals). The district courts in O’Bannon’s favor were trying to say that, the NCAA violated the first section of The Sherman Act, however it did not. In the first section, it states that “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine…” (The Sherman Antitrust Act (1890)). The Key statement in this section is “person who makes a contract that is illegal” and the contracts that NCAA athletes sign states these agreements and are legal.
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The loophole backfired on O’Bannon, and in this specific case, the plaintiffs are going off of what if’s and how it’s against antitrust laws. This comes down to college players who didn’t go pro wanting compensation for the time and effort they put into the specific sport they played. However, the court ruled that the NCAA was unlawful in section one of the Sherman Act and stated that schools would not be giving student-athletes scholarships up to the full cost of attendance but instead give $5,000 per year in deferred compensation, to be held in trust for student-athletes after they leave college (O’Bannon V. NCAA Court OF Appeals).
In the Washington University Journal of Law and Policy states that The Amateurism Rules of the NCAA doesn’t have a defined concept of what these rules are. “Rather it treats amateurism as a nebulous status that exists short of a threshold of professionalism, a status that is lost the instant that threshold is crossed” (Stephen Shaver, Unnecessary Roughness). This statement is insinuating that college athletes can be removed from playing that sport by tactics of fear. Explaining in the guidelines to not cross that “threshold”. “The NCAA states that college athletes may not receive any pay or benefit from any outside party in return for their labor of the sport, may not utilize an agent to advise him or provide representation, and may not use their image to promote themselves outside the NCAA” (Stephen Shaver, Unnecessary Roughness).
Where does the NCAA get the right to demand so much from a college athlete, who gives so much and not get compensated for his or her work? This sounds more like dirty cooperation than a legal one who follows the laws. However, from the outside looking in, this is a written agreement from one company to another for the trade of services. Paid education for labor. This violates many Acts and Laws but from societies eyes its acceptable. The plaintiffs are insinuating that the NCAA rules are illegal restraints of trade due to the Sherman Act, making the NCAA one of the biggest monopolies in the world. In cases time and time again, college athletes are bringing up these issues of not being compensated after graduating that college and the NCAA still using their image and name for their personal profit. The NCAA amateurism policies justify their actions and will continue to use the concept of being an “armature” compared to a professional athlete.
As the NCAA has these rules in place, are they for the right or the wrong reasons? Paying college athletes would cripple the NCAA, for the number of athletes in the United States and the ones who no longer play, imagine the profit loss. That would be money lost that would go towards scholarships and new facilities. The entire face of college sports would change. However, these rules and contracts that are put in place contradict laws and policies placed to protect the American people.
Antitrust Laws are worded in such ways that courts have hard times finding concrete foundations and dealing with more loopholes in them. The antitrust laws are put in place to protect the people, however with no firm foundation companies such as the NCAA can create loopholes such as Amateurism Rules. “Antitrust law promotes consumer welfare and economic efficiency by fostering competition on the theory that competition is the best way to allocate resources and meet consumer desires. Competition, however, is a loaded word; certain agreements among ostensible competitors that limit competition undoubtedly benefit consumers rather than hurt them” (Kreher, Peter, Antitrust Theory).
In this case The NCAA the rules are set in place to give educational opportunities to students and athletes in a proper manner. The ‘’debt-free’’ card is played in this case on the NCAA’s behalf stating that athletes should be proud to play for their college due to educational purposes that other students do not necessarily get. That later in life this contract between the athlete and college would pay divides and help them to a successful career in whatever degree they choose. “The student-athlete defense helped the NCAA win- and avoid- numerous liability cases through the years” (Kreher, Peter, Antitrust Theory). The audience of college sports could care less if players get paid or not due to the cost of attendance stipends proving that paying athletes, even more, would not hurt college sports (Russo).
College athletes will not be paid anytime soon says FOX Sports. Athletes both present and past over the years have brought to the media and everyone’s attention on how the NCAA’s Amateurism Rules are illegal and non-legislative. Nevertheless, the NCAA has provided comeback’s and notions of legitimacy and usually win in the long run. Even in cases where the NCAA loses, not many changes but small things here and there. The amateurism rule is still in effect, even after it has been said to violate laws and policies. The only difference is it has been modified for specific “loopholes” and sections even though most things have stayed the same over the years. After every court hearing, verdict changing, the results are ultimately the same. This is why college athletes keep bringing up these lawsuits and will more than likely be continued to be brought up from past history.
All these cases seem to lead right to the Ninth Circuit where changes are made to specific cases but not as a whole. The NCAA is not above the antitrust laws and will have consequences to their actions. But again, it goes right back to nothing really being done. Considering the NCAA is in charge of all revue profits in college athletics. A monopoly of this magnitude would almost be impossible to shut down. However, these cases can change the course of college sports by chipping away piece by piece and reforming it from the outside in. In the beginning, the NCAA was made to promote safety and fair play amongst players and colleges. Then once in charge, the NCAA took over more profit-oriented aspects. “In its incipience, the NCAA served in accordance with its charter as a “minor force” in the governance of college athletics.32 Its primary responsibilities included hosting championship events and providing a forum for colleges to discuss on-field safety issues” (Marc Edelman, Oregon Law review).
Lastly, the NCAA will be back in court again to defend its amateurism rules and to show how making these changes will eventually change the way college sports are perceived. Plaintiffs will again say capping compensation at the value of a scholarship violates federal antitrust law (Russo). “This case and the fate of the NCAA’s economic model will likely ultimately rest in the hands of the Ninth Circuit and the Supreme Court,’ said Gabe Feldman, director of Tulane University’s sports law program.”(Russo). The plaintiffs want a free market for conference by conference. This will almost abolish the amateurism rules in the sense that a college would become markets like professional organizations.
Competing against one another while paying students to play and go to school. Competitive Justification will be the NCAA’s big issue in this case since the price for players can be the same throughout the NCAA. Proving that the free market theory would be invalid in this situation. Then the O’Bannon case proves that “rules are essential in providing educational opportunities to thousands of student-athletes” (Russo). Whenever you pay college athletes, you’re taking away what it means to be in college and the lines of professionalism get blurred. Imagine the controversy of a college athlete possibly getting paid more than let’s say a professional athlete. Then once that happens, the lawsuits would be everywhere.
Professional athletes wanting to be compensated for playing in college and professional, or college players being sued for many different reasons. The face of college athletics will be changed forever if this is passed. There will be an economic crisis in college as a whole, which would affect not only college athletes but non-athletic college students. Plaintiffs have a valid case against the NCAA and will ultimately prove again that the NCAA is in violation of laws and policies put in place to protect the American people. In the end, the Ninth Circuit Court will decide the fate of the rest of college sports as we know it.
