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Isaiah White of the USC Trojans takes a shot against the Kansas Jayhawks during the second half of a second round game of the 2021 NCAA Men’s Basketball Tournament at Hinkle Fieldhouse on March 22, 2021 in Indianapolis, Indiana. Gregory Shamus/Getty Images
Credit Claims For Kansas Athletes: Legal Considerations For Financial Security
Ian is a senior reporter at Millhiser, where he focuses on the Supreme Court, the Constitution, and the decline of liberal democracy in America. A JD from Duke University, he is the author of two books on the Supreme Court.
The Kansas School Funding Formula Explained
College sports are a big business. In the 2015-’16 academic year, Division I basketball and Division I-A football generated $4.3 billion in revenue. The question of whether these basketball and football programs should use some of this revenue to compensate players more is now before the Supreme Court in NCAA v. in Alston, which the jury will hear next Wednesday.
The lawsuit was filed by several college football and basketball players (both men and women) alleging that “the NCAA and its constituents will not unlawfully pay an athlete any amount that exceeds the value of a grant-in-aid,” athletic scholarships and the nation’s premier college sport. A combination of similar compensation awarded to many of the players.All of the plaintiff athletes play (or, at least, played – the lawsuit was filed in 2014) at the elite Division I level.
If you watch a college football or basketball game on television, you’re watching the product of a long list of salaried or waged workers in the marketplace. Coaches in the best programs earn millions of dollars a year. Such programs employ an array of athletic directors, assistant coaches, and athletic trainers. Cleaners are needed to clean the grounds after the games. Soccer fields need groundskeepers. Basketball programs require workers to maintain court surfaces. And all these workers are generally paid as much as they can be compensated in the open market.
But players are not like that. The National Collegiate Athletic Association (NCAA) enforces strict rules governing player compensation.
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College athletes are not uncompensated. At the elite level, many receive scholarships to attend college, which include expenses such as room and board. Some players also receive a small cash stipend to cover their living expenses and other benefits such as food and medical care for sports-related injuries.
Of course, some of these players will make a lot of money as professional athletes, but that’s only a rare few. As Judge Milan Smith pointed out in his opinion in the case, “Less than 5% of student-athletes ever play at the professional level, and most of those lucky ones have only a few short years of advantage.” So “college years may be the only years when young student-athletes have a realistic chance to earn significant amounts of money or gain fame as a result of their athletic abilities.”
But these players cannot negotiate on salary. And they don’t benefit financially from the fame they earn while playing. The NCAA’s rules state that “an individual is ineligible for intercollegiate competition in a particular sport … if athletic ability is used (directly or indirectly) to gain pay in that sport.”
In any other industry, this arrangement would violate federal antitrust laws. For example, the media cannot form a cartel with its competitors where they all agree to pay depressed salaries to reporters.
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Now I have to admit that the NCAA has a fair amount of strength under existing precedents, in terms of pro-Labor. And it has a strong case because the Supreme Court has long recognized that sports leagues must have certain exemptions from federal antitrust law to operate.
NCAA v. University of Oklahoma. As the Court explained in Board of Regents (1984), sports leagues necessarily require individual teams to cooperate with their competitors. For example, the teams that make up a soccer league “must all agree on rules that affect things like the size of the field, the number of players on a team, and the extent to which physical violence is encouraged or prohibited.” They also have to agree on the fundamentals.Without this kind of collaboration, organized competitive sports cannot exist.
However, while there is widespread agreement that the NCAA needs some leeway to set rules that generally violate antitrust laws, this permission is far from absolute. The fundamental question in
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In the parlance of antitrust law, NCAA rules governing player compensation refer to what’s known as a “horizontal agreement” between competitors — that is, an arrangement between multiple businesses that compete on the same level in the college sports industry.
The case states, “Horizontal pricing and output capping are generally condemned as a matter of law under an ‘unlawful’ approach because the probability that these practices are anticompetitive is very high.” This is why media companies cannot band together and underpay their writers.
But this strong rule against horizontal price-fixing has been relaxed for what antitrust lawyers call “joint ventures.” Sometimes, several competitors can combine to produce a product that would not exist without such a combination. As Robert Borg, a former judge and unsuccessful Supreme Court nominee, wrote in an extraordinarily influential book in 1978, the “leading example” of such an effort was “league play.”
Few are going to see a single sports team showcase their talents. The essence of team sports is that two or more teams go against each other in a pre-arranged competition. As Borg wrote, such competition is an activity “that can only be undertaken collectively.” If Duke can’t work with UNC to decide when their two teams should meet on the basketball court, fans of both teams will lose a cherished tradition.
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Acknowledging that sports teams must have some ability to enter into arrangements that generally violate antitrust laws, the Court did not give the NCAA free rein to do as it pleased.
Includes the NCAA’s efforts to control which games can be televised at what time. Under the NCAA’s regulations, only two networks (ABC and CBS) were allowed to broadcast college football games, and those networks were required to “schedule the appearance of at least 82 different [teams] in each 2-year period.” Also, no team “qualifies for more than six total televised appearances and four national appearances, with the appearances split equally between the two carrying networks.”
The express purpose of the provision was to prevent televised games that “could have a negative effect on college football attendance.” The NCAA fears that if more games are televised, fans will choose to watch college football at home rather than buy tickets and watch at the stadium.
The court, however, held that such an arrangement was not permissible. The court explained that restrictions on televising sports such as rules defining the conditions of competition, the eligibility of participants, or the manner in which joint venture members share responsibilities do not apply. The benefits of total effort.”
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A sports league cannot exist unless every team plays by the same set of rules, and it cannot exist unless the teams agree to a certain schedule. But college football is capable of thriving without the limitations of televised sports imposed by the NCAA.
Case. Indeed, college football is now a thriving business, even though the court has struck down the NCAA’s restrictions on televised sports.
Antitrust law does not prevent competitors from colluding with one another—although such collusion would generally be illegal in such activities as horizontal price-fixing—provided that such collusion allows those competitors to deliver to consumers that would not otherwise be the case.
But what exactly is the “product” offered by the NCAA and its various affiliated schools?
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The NCAA argues in its brief that “the production of college sports” is “different from that of professional sports” because the participants are not only students but also amateurs, meaning they are not paid to play.” Competition among “amateurs” in this context refers to players who may receive scholarships and small stipends, but not salaries. The NCAA says it’s a fundamentally different product than competition among athletes for the wages they might earn in a free market.
One problem with this argument is that it can be applied to other industries.
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