Supreme Court sides with athletes in dispute with NCAA over rules limiting benefits

The Supreme Court dealt the NCAA a unanimous defeat Monday and ruled the multibillion-dollar college sports industry can be sued under the antitrust laws for conspiring to make money by insisting star athletes be unpaid amateurs.

The decision upheld a pair of modest rulings by judges in California who struck down the NCAA’s limits on extra benefits for football and basketball players, such as computers or scholarships for graduate study.

The justices said they agreed with a federal judge in Oakland and the 9th Circuit Court of Appeals, which said the “national debate about amateurism in college sports” should not be resolved finally by judges or courts.

But Monday’s decision is likely to spur states and major universities to offer more benefits, bonuses and possibly salaries to their star athletes. Several states, including California, have passed laws that would allow athletes to profit from their names and celebrity.

The NCAA went to the Supreme Court hoping for a ruling that would bolster its regulatory authority and give it an “immunity from the normal operation of the antitrust laws,” said Justice Neil M. Gorsuch, writing for the court.

Instead, the court said the association has no legal shield from a price-fixing claim.

Gorsuch referred to the NCAA and the major sports conferences as a “sprawling enterprise” and “massive business” that enriches many. The president of the NCAA is paid about $4 million per year, he said. The commissioners of the top conferences “take home between $2 to $ 5 million...and the annual salaries of the top Division 1 college football coaches approach $11 million.”

But that did not prevent the NCAA and its top lawyers, he said, from going to the Supreme Court to complain about a carefully measured ruling by U.S. District Judge Claudia Wilkin that allows athletes to obtain extra benefits to further their studies after graduating from college.

He said the student-athletes had an unusually strong case. “Put simply, this involves admitted horizontal price fixing in a market where the defendants exercise monopoly control ... and student athletes have nowhere else to sell their labor,” he said.

Gorsuch said the NCAA’s best argument was that sports leagues are a “joint venture,” one that requires cooperation among competitors to produce a better product.

It is certainly correct that they must agree on rules for competition, he wrote, and in the past, the high court had upheld television deals that the NCAA and universities arranged to divide up the revenue.

But the joint venture argument goes only so far, he said. “The NCAA’s rules fixing wages for student-athletes fall on the far side of this line. Nobody questions that Division 1 basketball and football can proceed” even if athletes are allowed to earn extra education benefits.

“The games go on,” he said in NCAA vs. Alston.

While ruling for the student-athletes, Gorsuch stressed the judge’s ruling was quite limited. It did not prevent the NCAA from enforcing rules against giving athletes well-paying “phony internships,” lavish deals with sneaker companies or luxury cars to help them get to classes. “Nothing stops it from enforcing a ‘no Lamborghini’ rule,” he said.

In a concurring opinion, Justice Brett M. Kavanaugh said he was prepared to go further. The revered tradition of amateur athletics “cannot justify the NCAA’s decision to build a massive money-raising enterprise on the backs of student athletes who are not fairly compensated,” he wrote. “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... It is not evident why college sports should be any different. The NCAA is not above the law.”

New York lawyer Jeffrey Kessler, who led the suit against the NCAA, said, “this historic 9-0 decision is about the athletes, especially those who will never join the pros. Hopefully, it will also swing the doors open to further change.”

NCAA President Mark Emmert said in a statement that “while today’s decision preserves the lower court ruling, it also reaffirms the NCAA’s authority to adopt reasonable rules ...[on] what are or are not truly educational benefits. Additionally, we remain committed to working with Congress to chart the path forward.”