In June of 2021, the United States Supreme Court issued a decision in the case of NCAA vs Alson.
This decision was very narrow because the judges tried to stick to the facts of the particular case. For example, the Ohio State quarterback should be able to accept a good laptop or a post-graduate scholarship.
However, the case has far-ranging implications for amateurism and compensation in college sports. It’s also been mischaracterized by both sides, creating a great deal of confusion.
This article gives a clear explanation of the Supreme Court ruling.
Background To Alston Vs NCAA
The NCAA has long had a rule that athletes and players on college teams do not get compensation.
There are a few exceptions such as scholarships or very small stipends for division one athletes. But players were not allowed to do anything else to earn extra money. That includes:
- college work-study programs
- outside jobs
- paid appearances
The NCAA rules were put in place to stop colleges or college team fans from using work opportunities to pay players under the table.
Downside to the NCAA amateur rules
A large portion of college football players come from poor backgrounds and don’t go on to make the professional leagues.
The side effect of the NCAA rules meant that they couldn’t even afford to go out with friends for a pizza or to see a movie. They simply couldn’t do anything to earn money.
Meanwhile, the colleges were raking in massive amounts of money by selling television rights and selling jerseys with players’ names on them. No cut of the money went to the players.
The primary concern about this was the fact that these players are bringing huge amounts of money into colleges but are being forced to be essentially free labor.
Massive amounts of money going only one way
The top football colleges bring in well over a hundred million dollars from football alone.
Alabama University head football coach Nick Sabin makes over ten million dollars a year!
Meanwhile, the players get a scholarship and maybe a small stipend.
Anyone who doubts the amount of money that college football brings in only needs to watch this brief video from a television broadcast of a Penn State University game.
This is two teams of college students playing in a college stadium! The ticket and television income from this game alone must be staggering.
Alston V. NCAA In The Federal Courts
In 2014, the federal courts ruled in a case entitled O’Bannon v. NCAA that colleges were profiting from players’ names and likenesses.
The courts said that not sharing this with the players was a violation of United States antitrust law.
After this decision, several former college athletes, including Shane Alston and Justine Hartman, sued for violations of antitrust law.
They argued that they should have received benefits that were education-related and not monetary. This would include:
- study abroad
- post-career graduate scholarships
All these cases were consolidated in the Federal Courts under the title of Alston v. NCAA.
The players won their case at the lower court levels. Here is one federal judge:
The treatment of Student-Athletes is not the result of free-market competition.
To the contrary, it is the result of a cartel of buyers acting in concert to artificially depress the price that sellers could otherwise receive for their services.
Our antitrust laws were originally meant to prohibit exactly this sort of distortion.Court ruling on Alston vs NCAA
NCAA V. Alston At The Supreme Court
At the Supreme Court, the names were reversed because it was now the NCAA bringing the case since they were appealing losses at the lower levels.
The NCAA argued that since they were merely a cooperative organization they should be given wide leeway to set rules that allow them to preserve the nature of college sports.
The courts had previously stated that the NCAA had a legitimate interest in protecting the amateur nature of its sport.
That prior ruling was on the basis that college football is different from professional sports because it is rooted in academic tradition. This makes it more popular than pro sports such as Minor League Baseball.
The NCAA argued that college athletes must not be paid in order to preserve this character and quality.
The Supreme Court rules that the NCAA violated antitrust law
The Supreme Court acknowledged that there was a legitimate interest in maintaining the distinction from professional sports.
However, the judges’ unanimous decision was that the economic power of the NCAA, with its twelve thousand member colleges, had an effective monopoly and overwhelming economic power.
Therefore, they ruled that the actions of the NCAA violated antitrust law.
Limits of the ruling
Interestingly, the decision expressly stated that the same rationale did not apply to individual conferences within the NCAA.
This is because individual conferences only contain a few teams and are competing against other similar conferences.
Due to this, they are not monopolies and are free to enact whatever rules they like.
For example, the Ivy League is just a single conference. This means they can continue to prohibit athletic scholarships.
The NCAA as a whole can’t enact a ban on academic benefits. But the Big Ten, the SEC, or any other conference that wants to can.
The Court also made clear that their decision only applied to non-cash academic benefits.
It said nothing at all about players getting paid, use of player images, or anything else.
What Does The Decision Mean For College Football?
While the decision is very limited in what it decided, its implications are huge.
Ironically, the courts have previously ruled that professional sports are exempt from antitrust laws for various reasons.
Major League Baseball is the most well-known example. Check out our article on baseball’s antitrust exemption.
But now, college sports are firmly subject to antitrust review by the courts!
Does that seem odd? Well, the main reason seems to be that professional players have a union and can negotiate – but college players can’t.
The college players are bringing in huge amounts of money. Meanwhile, the colleges are setting up rules that limit their compensation far below what it would be on the open market.
This is very likely to create a wave of future lawsuits. We expect other NCAA restrictions will be brought to the courts for antitrust review.
It’s true that the Supreme Court tried very hard to limit its decision to the very narrow facts of the cases at hand.
But it’s hard to see how the same antitrust rationale won’t apply to most of the other NCAA restrictions on compensation.
The Alston case applied to whether the Ohio State’s quarterback could get a top-end computer.
It covered whether the captain of the Duke Universities’ basketball team could get a free graduate education.
However, the effects will probably go far beyond these narrow issues. It may very well spell the end of college athletics in the form we currently know it.
What Has Changed Currently?
You may have heard about NIL, which refers to recent changes to the rules around what college athletes can earn.
We go into the current state of affairs in our article on NIL and college football. Some stars are earning millions.
But it’s fair to say that most college football players may benefit from a few local business endorsements. However, a free laptop or regular decent meals at a local restaurant may be very welcome.