Wednesday, September 30, 2015

NCAA & Antitrust Law: Can Student-Athletes be Paid Professionals?

For those readers who are sports fans, the ongoing courtroom saga of the Ed O'Bannon vs. the NCAA case has been capturing our attention for the past 2 years or so. In this case, a former NCAA basketball player sued the organization that runs collegiate athletics (the NCAA) for the right of student-athletes to receive some form of compensation, more than just athletic scholarships, for the use of their likenesses & names in television & radio broadcasts, video games, & merchandise. The court battle has been fierce & has the potential to completely redefine the American collegiate sports scene, from one clinging to an outdated notion of amateurism to something more representative of the modern age of immediacy & increasing specialization among youth in sports.

Today's decision by the US 9th Circuit Court of Appeals partially affirmed & partially reversed the decision of the lower court which it was reviewing. To get a good view of what happened here & what it all means for the future of collegiate athletics, let's break down the decision into more easily digestible parts. In terms of agreeing with the lower court's decision, the 9th Circuit Court determined that the NCAA is in violation of US antitrust laws by restricting payments to student-athletes & must allow member institutions to provide up to the full cost of attendance to these students. The Circuit Court, however, reversed the lower court's decision allowing NCAA member schools to provide $5,000 per year in cash compensation to players to fund non-educational expenses. The Court said that by not tethering this compensation to education, the facade of amateurism was turned into a farce & the NCAA was no longer required to permit member institutions to pay student-athletes this sort of compensation. At the end of the day, both sides took away victories from this ruling, as the NCAA is no longer required to permit schools to pay non-educational compensation to athletes & the Court also affirmed that the NCAA must comply with US antitrust laws.

9th Circuit Court of Appeals
As a big sports fan myself & someone who is interested in the legal & business aspects of both professional & collegiate athletics, I found that the biggest takeaway from this decision was the affirmation that the NCAA must play by the US antitrust laws just the same as all of the rest of the major professional sports leagues in North America. In the past, the MLB, NBA, NHL, & NFL have all had major legal decisions turn against them due largely to one law: the Sherman Antitrust Act. For instance, this law helped the first wave of professional baseball players in the early 1970s break the MLB leadership into allowing free agency in the sport, greatly increasing player freedom & bargaining power in negotiations with team owners. The legal fact, as affirmed by the 9th Circuit Court today, that the NCAA is definitively subject to this powerful law is something that will stay with the organization forever. Regardless of the outcome of this particular legal battle, one which may end up in the Supreme Court, the NCAA will now always be subject to legal & antitrust scrutiny, which may force the organization to open up its policies & become more student-athlete friendly sooner rather than later.


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