Oral Argument Summary: NCAA v. Alston
By: Audrey Jung
On March 31, 2021, the Supreme Court considered whether the NCAA’s restrictions on paying college athletes violate antitrust law.
This dispute draws its roots from NCAA v Board of Regents (1984), a case where the University of Georgia and the University of Oklahoma sued the NCAA for restricting the number of football games they could broadcast on national TV networks. The Supreme Court ruled that the NCAA’s restrictions had monopolized broadcasts, thus violating antitrust law. However, it also held that the NCAA had “ample latitude” to enforce rules preserving amateurism, which separates college from professional sports.
NCAA v Alston will more clearly define what “ample latitude” means.
In 2014, several Division I athletes, including former West Virginia running back Shawne Alston, challenged the NCAA’s restrictions on education-related benefits, claiming that they violated antitrust law. These benefits include internships, computer and science equipment, music instruments, and post-graduate scholarships. The student-athletes argued that these restrictions didn’t drive consumer demand or impact amateurism, but were instead designed to cut costs.
The district court ruled for the students but noted that while the NCAA can’t restrict non-cash-related benefits, it can restrict cash awards for educational purposes. The Ninth Circuit of Appeals affirmed. The NCAA appealed, and the Supreme Court agreed to hear the case in December 2020.
At the Supreme Court, the NCAA’s lawyer, Seth Waxman, argued that college sports are marked by amateurism, meaning that students are not “paid for their play.” Maintaining amateurism is pro-competitive, and it’s achieved through agreement by schools within the NCAA. Waxman claimed that the lower courts’ definition of amateurism is too narrow, and that amateurism should be decided by the NCAA, not by the courts. Giving courts the power to decide leads to unnecessary litigation and makes judges supervisors of college sports.
The lawyer for the students, Jeffrey Kessler, argued that there is no pro-competitive justification for the NCAA’s restrictions. Kessler cited past NCAA restrictions — on TV broadcasts, assistant coach salaries, and name, image, and likeness profits — and argued that even after court rulings lifted all these restrictions, demand for college sports continued to flourish.
Acting Solicitor General Elizabeth Prelogar also argued for the respondents. She explained why the Court should apply the rule of reason and not, as the NCAA argued, a
“quick look” review of the restrictions. Unlike the rule of reason, the “quick look” review doesn’t require an in-depth analysis of the market and its anticompetitive effects. Instead, it simply requires the NCAA to show that removing the restrictions hurts the market for college sports. According to Prelogar, this clashes with precedent. Price-fixing in a market where the NCAA has monopoly control has severe anticompetitive effects.
In line with March Madness, Waxman, Kessler, and Prelogar are legal all-stars. Waxman, a former solicitor general, has argued over 80 cases at the Court. Kessler is a well-known sports lawyer. Prelogar, who clerked for Justices Elena Kagan and Ruth Bader Ginsburg, as well as then Appellate Court Judge Merrick Garland, is also no stranger to the Supreme Court.
Chief Justice Roberts asked the opening question. Colleges pay up to $50,000 for insurance policies so that their athletes will play in college and not the professional leagues. To Roberts, this practice sounded a lot like students were “paid to play,” and he questioned whether it undermines amateurism.
Justice Thomas wondered whether there are also differences in pay between coaches of amateur and professional teams. Why don’t pay restrictions on amateur athletes also apply to coaches of amateur teams?
Meanwhile, Justice Alito brought up the potential costs of playing a college sport. While colleges receive billions of dollars to pay coaches and fund their athletic departments, rigorous and time-consuming training leaves students with less time to study, the pressure to avoid harder majors, and low graduation rates. “How,” Alito queried, “can this be defended in the name of amateurism?”
Waxman cited limits to the number of hours athletes can spend in training. As to lower graduation rates, student-athletes, he claimed, graduate at higher rates. Alito remained skeptical. While Waxman’s argument could apply to lower revenue sports, it’s a different story with powerhouse basketball and football teams.
Justice Sotomayor brought up the fact that although courts prohibited the NCAA from restricting education-related benefits, athletics conferences can still do so. If the NCAA and its member schools believe these benefits harm amateurism, why not let conferences impose these restrictions?
Justice Kagan offered a different perspective. What if what was really happening was that the NCAA was using its market power to fix athletic compensation at low rates, to make a profit?
Justice Gorsuch and Justice Kavanaugh both built off of Justice Kagan’s concern. Because the NCAA has monopoly control, Gorsuch wondered why it shouldn’t be subject to stricter scrutiny, through a rule of reason analysis. Kavanaugh, meanwhile, expressed concern that schools were “conspiring…to pay no salaries to the workers [students] who are making the school billions of dollars”.
Justice Barrett looked ahead. How would a ruling against the NCAA affect Title IX and women’s sports?
Waxman replied that it would disadvantage lower-revenue sports, in both mens’ and womens’ sports. To cut costs, schools would cut benefits to less popular sports to compensate players in sports that drew more revenue.
In a question to Kessler, Justice Thomas asked whether lifting NCAA restrictions would lead to “cherry-picking,” with wealthier schools offering more enticing benefits to draw in the best athletes. With lower-income schools at a disadvantage, it could hurt the competitiveness of college sports.
The district court ruled that schools can pay students up to $5,980 for being on the team, an amount that Justice Kagan questioned as arbitrary and Justice Sotomayor as judicial price-fixing.
General Prelogar clarified that the $5,980 isn’t an automatic award students receive for joining the team. The NCAA can enforce criteria, like a GPA requirement, so that the $5,980 is an award for academic achievement, rather than payment for the athletes’ play. Failing to limit cash payments could allow athletes to be paid amounts akin to professional salaries, blurring the line between college and professional sports. The $5,980 isn’t arbitrary, in that it matches the equivalent amount students received in athletic awards.
Both Chief Justice Roberts and Justice Breyer wondered how far the Court’s role extends into businesses, like college sports. A ruling in this case, though narrow, could affect a large number of antitrust cases. In Roberts’ words, “the restrictions…were modest ones, but I don’t think the principle was.”
The Court’s ruling could have broad implications. A ruling in the NCAA’s favor could make it harder for students to fight restrictions in future cases or to receive compensation. A ruling in the students’ favor would allow athletes to receive educational benefits. It might also open doors to future cases challenging the NCAA’s restrictions, or extend to antitrust cases beyond college sports.
A ruling will come out sometime this year.
Image credit: U of Alabama v. U of Georgia (David Smith, https://flic.kr/p/3aZqnc; CC BY-NC-ND 2.0, https://creativecommons.org/licenses/by-nc-nd/2.0/).