Supreme Court rules against NCAA in unanimous antitrust case

The Supreme Court ruled on Monday against the NCAA in a landmark antitrust case that specifically challenged the association’s ability to impose national limits on athlete benefits related to education, but had more broadly raised doubts about its ability to limit benefits.

The decision will end the association’s national limits on the educational benefits athletes can receive to participate in varsity sports.

By upholding lower court rulings, the judges upheld an injunction that could fundamentally change the NCAA’s amateur system.

Athletes playing Division I Men’s or Women’s Basketball or Bowl Division football will be able to receive benefits from their schools, including cash or cash-equivalent rewards based on college or graduation.

Other perks that schools can also offer are scholarships to earn undergraduate or graduate degrees at any school and paid internships once athletes have completed their college athletic eligibility.

Schools will not be required to provide these types of benefits, and conferences may impose bans on certain benefits if their member schools so desire. However, conferences cannot act in concert. Thus, if a conference chooses to limit or prevent certain benefits, it risks giving a competitive advantage to other conferences.

The decision was unanimous.

Judge Neil M. Gorsuch’s opinion noted that lower court rulings left in place the NCAA’s ability to “prohibit in-kind benefits unrelated to a student’s actual education.” However, he also wrote that as long as the NCAA “means offering some sort of judicially ordered immunity from the terms of (antitrust law) for its trade restrictions – that we should ignore its restrictions as they lie at the intersection of higher education, sport and money, we cannot agree. “

The move seemed likely to at least have an indirect impact on the NCAA’s attempts to address a range of other issues, including athletes’ ability to make money from non-university entities through their name, image and resemblance (NIL).

In a concurring opinion, Judge Brett M. Kavanaugh wrote: “… there are serious questions as to whether the remaining NCAA indemnification rules can be accepted as part of an ordinary antitrust legal analysis. Kavanaugh added that the NCAA “must provide a legally valid rationale” that “its remaining compensation rules” are of sufficient value to promote competitive balance and that the benefits outweigh the harm to athletes.

“In my opinion, however, the NCAA may not have such a rationale,” Kavanaugh wrote.

The result represents a victory on many levels for the lawyers of the athlete’s claimants. One of them, Steve Berman, already has another case related to it pending before the same U.S. District Court judge who handled the Alston case, as well as a previous case on behalf of the former UCLA basketball star Ed O’Bannon who helped set up the Alston case.

The new case not only calls for the NCAA to be prevented from having association-wide rules that “restrict the amount of name, image and likeness compensation available” to athletes, but also seeks unspecified damages based on the share of the TV rights money and the social media revenues that the plaintiffs claim the athletes would have received had the current NCAA limits on NIL compensation no. ‘had not existed.

In addition, under previous district-level decisions, plaintiffs’ attorneys have been awarded more than $ 33 million in fees and expenses – a result that will be reinforced by Monday’s unanimous decision.

“We hope this victory in the battle for the rights of varsity athletes will lead to a wave of justice elevating other aspects of athlete compensation. This is the fair treatment college athletes deserve, ”Berman said in a statement Monday.

In a statement, the NCAA highlighted one of the few aspects of Gorsuch’s decision that endorsed his ability to control education benefits – the part in which he affirmed lower court rulings that the association “could develop its own definition of benefits that relate to education and seek to modify the court injunction to reflect that definition.”

The NCAA said, “While today’s ruling preserves the lower court’s ruling, it also reaffirms the NCAA’s power to make reasonable rules and repeatedly notes that the NCAA remains free to articulate this. which are and are not truly educational benefits, consistent with the NCAA’s mission to support student-athletes. ”

The case, originally filed in March 2014 on behalf of former West Virginia footballer Shawne Alston, had nothing to do with NIL. But he focused on the degree of antitrust scrutiny that NCAA rules should face, particularly the rules around athlete compensation.

NCAA rules have severely restricted the NIL activity of athletes, but they are on the verge of relaxing those restrictions and allowing them to participate in certain types of sponsorship deals, monetize their social media followers and get paid to sign autographs. However, eight states have forced the issue by passing laws that will allow athletes to earn money with their NIL starting July 1 or when their schools wish.

Due to different state actions, the NCAA is seeking federal law that would create national NIL regulations. The association also wants the law to protect it from future athlete compensation lawsuits. Five bills have been introduced in Congress that assess the legal shield the NCAA wants against requiring schools to do more for athletes than just allowing them to have NIL agreements.

Monday’s decision came two and a half months after oral argument in which the Biden administration’s acting U.S. general counsel Elizabeth Prelogar joined lawyers for the athletes. The judges asked important questions about the compensation limits for NCAA athletes, but also expressed concern that changing those limits could destroy college sports as they currently exist.

10 QUESTIONS: Explore how name, image and likeness will change the face of varsity sport

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Questions from Chief Justice John G. Roberts Jr. illustrated the riddle.

Speaking to NCAA attorney Seth Waxman, Roberts noted that NCAA rules allow colleges to pay for a form of insurance for elite-level athletes that is meant to cover them if they experience a injury that causes them to suffer a significant loss of value from a professional sport. Contract.

“Now it looks a lot like a paid game,” said Roberts. “You know, you pay the insurance premium for them to play in college and not in the pros. Doesn’t that undermine the amateur status theory that you have?

But Roberts also lobbied athlete lawyer Jeff Kessler. He observed that lower court rulings – and the additional education benefits they approved – could lead to the erosion of any limits on athlete compensation.

“It’s like a game of Jenga,” said Roberts. “You have this nice, solid block that protects the kind of product that schools want to provide. And you take out a log and then another and everything is fine and another and another. And all of a sudden, everything collapses. “

Kessler replied that in this case, the problem is only with the benefits of education.

Follow Steve Berkowitz on Twitter @Berkowitz

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