June 21, 2021
The Supreme Court Could Change Decades-Long Policy Regarding College Athlete Compensation
On June 21, 2021, the Supreme Court ruled against the NCAA, affirming the Ninth Circuit ruling which invalidated NCAA restrictions on certain education related benefits for college athletes.
For years, National Collegiate Athletic Association (“NCAA”) rules have limited the compensation college athletes can receive, both from NCAA member schools and from other sources. In this case, a group of current and former college athletes argued that the NCAA’s compensation limits are anti-competitive. They stand with a favorable ruling from the Ninth Circuit Court of Appeals and now defend that ruling before the Supreme Court.
The NCAA has approximately 1,100 member schools in three divisions (I, II and III), which are grouped into regional conferences. Under the NCAA bylaws, college athletes are prohibited from receiving “pay” for participating in an NCAA sport but are permitted to receive certain forms of compensation that are considered “not pay,” including athletic scholarships known as “grants-in-aid.” From 1976 to 2014, the definition of “grant-in-aid” was limited to tuition, fees, room, board and course-related books. In 2015, the definition of “grant-in-aid” was expanded to include other expenses related to attendance up to the cost of attendance (“COA”) at each member school.
This case is brought by a group of current and former college athletes who played Division I Football Bowl Subdivision men’s football and men’s and women’s Division I basketball. The college athletes argue that the NCAA’s rules limiting the amount of compensation that they can receive violate section 1 of the Sherman Act, a federal antitrust law, which prohibits agreements that unlawfully restrain trade and affect interstate commerce.
The NCAA defends its compensation limits by arguing that they are procompetitive because they drive demand for college sports as a product that is distinct from professional sports.