The NCSL Blog

17

By Lisa Soronen

In NCAA. v. Alston and AAC v. Alston the U.S. Supreme Court will decide whether the NCAA's eligibility rules prohibiting pay-to-play violate antitrust law. The 9th Circuit ruled against the NCAA.

Marquette forward Justin Lewis (2) makes a dunk against Creighton in the first half during an NCAA basketball game on Monday, Dec. 14, 2020, in Omaha, Neb. (AP Photo/John Peterson)Five states have passed legislation that would allow student-athletes to profit off of their name, image and likeness, with an additional 30 states introducing similar legislation in 2020, according to information compiled by NCSL.

While the NCAA disallows pay-for-play it does allow schools to reimburse student-athletes for their reasonable and necessary academic and athletic expenses. The student-athletes in this case claim that the NCAA student-athlete payment limits are an anticompetitive restraint of trade in violation of federal antitrust law. 

The relevant antitrust analysis is called the Rule of Reason. First, the student-athletes had to establish that the NCAA restrained trade; next the NCAA had to show that the restraint had procompetitive effects; and then the student-athletes had to demonstrate that substantially less restrictive alternatives are available.

 The NCAA doesn’t dispute the first point—that its compensation framework is anticompetitive.

 The NCAA defended the compensation limits as being procompetitive because they “preserve ‘amateurism,’ which, in turn, ‘widen[s] consumer choice’ by maintaining a distinction between college and professional sports.

The 9th Circuit mostly disagreed with the NCAA concluding that only “unlimited cash payments akin to professional salaries” and not restriction on “certain education-related benefits” are procompetitive.   

The 9th Circuit agreed with the district court’s list of less restrictive alternatives including prohibiting the NCAA from “(i) capping certain education-related benefits and (ii) limiting academic or graduation awards or incentives below the maximum amount that an individual athlete may receive in athletic participation awards, while (iii) permitting individual conferences to set limits on education-related benefits.”

In its petition asking the Supreme Court to hear this case, the NCAA points out that three federal circuit courts of appeals have rejected similar lawsuits.

The NCAA offers numerous objections to the 9th Circuit’s application of the Rule of Reason. The NCAA argues: “The decision below deprives the NCAA of the leeway that sports governing bodies and joint ventures ordinarily have under antitrust law, leeway that this Court and others have recognized the NCAA needs to administer intercollegiate athletics.

"Instead, the decision below vests nationwide supervision of eligibility to participate in intercollegiate athletics in one district judge, with authority to be exercised through an endless string of antitrust lawsuits challenging NCAA rules—even if those rules have been upheld in prior cases.”

Lisa Soronen is executive director of the State and Local Legal Center and a regular contributor to the NCSL Blog on judicial issues.

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This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.