Home > Alerts > Oral Argument in Blockbuster NCAA Case Reveals Justices’ Skepticism of Rules on College Athlete Pay but Also Support for Status of NCAA as Legitimate Joint Venture

Oral Argument in Blockbuster NCAA Case Reveals Justices’ Skepticism of Rules on College Athlete Pay but Also Support for Status of NCAA as Legitimate Joint Venture

Posted: 04/05/2021
Industries: Higher Education

Last week in the Supreme Court, the much awaited oral argument in NCAA v. Alston lived up to its billing with nearly every justice participating in the questioning, putting the lawyers for the NCAA, plaintiffs, and the Acting U.S. Solicitor General (appearing as a friend of the Court) through their paces. The issues covered ranged from the standards applicable to the antitrust challenge to the NCAA’s monetary limits on educational benefits payable to college athletes, the NCAA’s legitimate business purpose served by such limits, and the record below which led a district judge to enter an injunction against the association and the Ninth Circuit Court of Appeals to uphold that ruling. We previously wrote about the May 18, 2020 opinion and order by the Ninth Circuit Court of Appeals here.

The NCAA argued on Wednesday that its practices should have been upheld using a truncated Rule of Reason analysis given that the restrictions at issue are at the core of the NCAA’s business, namely the provision of amateur athletics. Several of the justices pushed back on this concept expressing skepticism that the NCAA’s limitations on athletes’ education benefits outweigh the obvious, anti-competitive impact of those limitations on college athletes themselves. Among other things, the justices asked:

  1. Why a truncated antitrust analysis is appropriate given the NCAA’s monopsony power over college athletes’ labor rather than a full blown Rule of Reason analysis that examines, rather than simply defers to, the NCAA’s competitive justification for its restraints on pay?
  2. Why “amateurism” is defined solely by reference to athletic competition featuring unpaid athletes rather than competition featuring college students in good standing at their institutions of higher learning?
  3. Why NCAA’s limits on educational benefits are needed or constitute the least restrictive alternative available given the NCAA already permits a host of other educational benefits to college athletes, including monetary scholarships, prizes and insurance against loss of future earnings, that could be viewed as eroding the NCAA’s view of “amateurism”?

The justices also weighed in with active questioning of the plaintiffs’ lawyer and the Solicitor General. Several justices voiced the opinion that, while the NCAA’s practices at issue seem to be a straight-forward conspiracy to fix the prices of student athlete labor, the NCAA otherwise is a legitimate joint venture entitled to deference under the Rule of Reason when it comes to its traditional role in setting standards around recruitment of athletes, establishing the rules of college athletics, negotiating TV rights, and promoting amateur athletics. Neither plaintiffs’ counsel nor the Solicitor General disagreed with these concepts and, in fact, pointed out that individual conferences and institutions (which do not have monopoly power like the NCAA) are free to set their own limits on educational benefits to student athletes without the same risk of violating antitrust laws.

By the end of the argument, many of the justices’ questions came down to whether the Court should decide the case narrowly or more generally on the NCAA’s role as a joint venture. Although the plaintiffs had argued in the trial court that the NCAA should not be able to place any limits on monetary pay for college athletes, counsel conceded they have abandoned that position on appeal. A consensus seemed to emerge that the NCAA might be able to prohibit or limit the size of “non-educational” payments to student athletes in order to preserve their status as amateurs, but only time will tell how sweeping an opinion the Supreme Court issues on the case.

A decision in the case is expected this summer or fall. The authors will continue to monitor developments in the case and on the legislative front with respect to the passage of state (and possibly federal) laws protecting college athletes’ right to their names, images and likenesses.