By Luke Trompeter

The Supreme Court declined to hear appeals from the National Collegiate Athletic Association (“NCAA”) and a group of current and former collegiate athletes, prolonging the debate over whether it is acceptable for the NCAA to provide monetary compensation to college athletes.[1]  The Court’s refusal to hear the case leaves in place a Ninth Circuit Court of Appeals ruling that found the NCAA in violation of federal antitrust law, but did not require the NCAA to pay players, leaving both parties unsatisfied.[2]

The NCAA oversees 460,00 athletes at 1,121 colleges and universities[3] and has faced challenges over the commercial use of athletes’ names and images without compensation.[4]  The athletes, led by former University of California Los Angeles (“UCLA”) basketball star, Ed O’Bannon, accused the NCAA of violating antitrust laws by blocking the athletes from obtaining a share in licensing revenue from broadcasts and videogames.[5]  The NCAA refuted this by arguing that college athletes are amateurs and paying them would turn the scholastic system into a professional one.[6]

In 2014, the United States District Court for the Northern District of California found the NCAA in violation of the Sherman Antitrust Act because its rules banning compensation were anti-competitive and fixed the “price” of college education for student-athletes.[7]  The District Court ordered the NCAA to allow schools to cover “cost of living expenses” outside of current scholarships and to fund trusts up to $5000 per year of eligibility of an athlete.[8]  This marked the first successful legal challenge to the NCAA’s amateur designation since the 1984 Supreme Court ruling in NCAA v. Board of Regents of the University of Oklahoma.[9]

In 2015, the Ninth Circuit Court of Appeals affirmed the District Court’s findings that the NCAA violated federal antitrust laws, but overturned the District Court’s remedies for allowing compensation to athletes.[10]  The Ninth Circuit instead ruled that schools covering an athlete’s full cost of attending college rather than just tuition and room and board was sufficient enough to satisfy antitrust laws.[11] Both parties were unsatisfied with the Ninth Circuit’s decision.  The players argued that the trust-fund system would not harm college athletics and it should not have been tossed out.[12]  The NCAA stated that the lower courts’ decisions, which found its requirement barring pay to players in violation of federal antitrust laws, “unprecedented.”[13]  The NCAA appealed to the Supreme Court arguing the Ninth Circuit ruling would jeopardize the benefits of amateurism and that the lower courts erred in hearing the case based on an incorrect interpretation of first amendment publicity rights.[14]  The group of athletes also appealed, asking the Court to review the section of the Ninth Circuit opinion that said the NCAA could use the likeness of student-athletes without compensating them with deferred payments.[15]  Both parties had hoped the Supreme Court would provide clarity on the antitrust violations as well as the first amendment question of the use of athletes’ likeness.[16]  Ultimately, the Supreme Court let the lower court decision stand, and as is tradition, declined to give reasons for its refusal to hear the case.[17]

The debate over whether college athletes should be paid will continue to be contentious.  Many scholars argue against paying student-athletes because they feel they are already compensated enough with scholarships.  Those who support paying college athletes argue providing the athletes a share of the NCAA’s $871.6 million revenue[18] is fair and just.  Either way, given the mixed ruling of the Ninth Circuit, there will almost certainly be additional legal challenges to the NCAA’s compensation rules.  Eventually, the Supreme Court will need to play ball and provide definitive rulings on whether the NCAA’s system violates antitrust laws and whether the use of the athletes’ likeness without compensation infringes on the First Amendment.  No one likes a game full of punting.

 

[1] Brent Kendall, U.S. Supreme Court Won’t Review Appeals on Pay for College Athletes, Wall St. J. (Oct. 3, 2016 10:05 AM), https://www.wsj.com/articles/u-s-supreme-court-wont-review-appeals-on-pay-for-college-athletes-1475503527.

[2] Adam Liptak, Supreme Court Declines to Consider N.C.A.A. Rules on Paying Athletes, N.Y. Times (Oct. 3, 2016), https://www.nytimes.com/2016/10/04/us/politics/supreme-court-declconsider-ncaa-rules-on-paying-athletes.html.

[3] NCAA, https://www.ncaa.org/about/resources/media-center/ncaa-101/what-ncaa (last visited Oct. 13, 2016).

[4] Adam Liptak, Supreme Court Declines to Consider N.C.A.A. Rules on Paying Athletes, N.Y. Times (Oct. 3, 2016), https://www.nytimes.com/2016/10/04/us/politics/supreme-court-declconsider-ncaa-rules-on-paying-athletes.html.

[5] Brent Kendall, U.S. Supreme Court Won’t Review Appeals on Pay for College Athletes, Wall St. J. (Oct. 3, 2016 10:05 AM), https://www.wsj.com/articles/u-s-supreme-court-wont-review-appeals-on-pay-for-college-athletes-1475503527.

[6] Adam Liptak, Supreme Court Declines to Consider N.C.A.A. Rules on Paying Athletes, N.Y. Times (Oct. 3, 2016), https://www.nytimes.com/2016/10/04/us/politics/supreme-court-declconsider-ncaa-rules-on-paying-athletes.html.

[7] See O’Bannon v. National Collegiate Athletic Ass’n, 7 F.Supp.3d 955, 1006 (N.D. Cal. 2014).

[8] Id. at 1008.

[9] See generally National Collegiate Athletic Ass’n v. Board of Regents of University of Oklahoma, 468 U.S. 85 (1984).

[10] See O’Bannon v. National Collegiate Athletic Ass’n, 802 F.3d 1049, 1079 (9th Cir. 2015).

[11] Id. at 1074.

[12] Brent Kendall, U.S. Supreme Court Won’t Review Appeals on Pay for College Athletes, Wall St. J. (Oct. 3, 2016 10:05 AM), https://www.wsj.com/articles/u-s-supreme-court-wont-review-appeals-on-pay-for-college-athletes-1475503527.

[13] Id.

[14] Zachary Zagger, High Court Won’t Hear O’Bannon Student-Athlete Pay Case, Law 360 (Oct. 3, 2016 10:31 AM), https://www.law360.com.proxy.wcl.american.edu/articles/847381/high-court-won-t-hear-o-bannon-student-athlete-pay-case.

[15] Id.

[16] Adam Liptak, Supreme Court Declines to Consider N.C.A.A. Rules on Paying Athletes, N.Y. Times (Oct. 3, 2016), https://www.nytimes.com/2016/10/04/us/politics/supreme-court-declconsider-ncaa-rules-on-paying-athletes.html.

[17] Id.

[18] NCAA, https://www.ncaa.org/about/resources/finances/revenue (last visited Oct. 13, 2016).