Supreme Court rules in favor of athletes in NCAA compensation case

The Supreme Court sided unanimously with college athletes on Monday, ruling the National Collegiate Athletic Association’s restrictions on education benefits for players violate the nation’s antitrust laws.

The 9-0 decision represents a landmark victory for college players and a significant moment in the history of college athletics, as lawmakers in Congress and statehouses weigh new laws to allow athletes to profit from personal endorsements and sponsorships.

The ruling is likely to allow colleges to offer topflight football and basketball players pricey enticements related to their education — such as thousands of dollars in cash awards for maintaining a high GPA or making progress toward graduation, or graduate school scholarships and study abroad opportunities.

College sports conferences can also set their own rules for what acceptable education-related benefits should be. But Monday’s ruling will alter the tenor of a long-running debate about the business of college sports and whether the NCAA, states or the federal government should control the rules for a multibillion-dollar marketplace.

“To the extent [the NCAA] means to propose a sort of judicially ordained immunity from the terms of the Sherman Act for its restraints of trade — that we should overlook its restrictions because they happen to fall at the intersection of higher education, sports, and money — we cannot agree,” Justice Neil Gorsuch wrote for the court.

The Supreme Court focused on whether the NCAA’s hard limits on athlete compensation violate antitrust law, not the policy debate on player endorsements smoldering inside Capitol Hill, state legislatures and stadiums. But the antitrust case represents a fundamental threat to the athletic association’s business model, which is playing out while the NCAA and powerful college sports conferences lobby Congress to regulate how players can sign third-party endorsements.

Several states — including the college sports powerhouses of Alabama, Florida, Georgia and Texas — have now approved laws that allow college athletes to earn money from the use of their name, image and likeness starting in July. There’s abundant interest — or resignation — among lawmakers that Washington may have to referee the dispute after years of inaction and a rapidly shifting landscape in the states.

In a statement, the White House said President Joe Biden "believes that everyone should be compensated fairly for his or her labor" and Monday's ruling in favor of the athletes "recognizes that, as with all Americans, their hard work should not be exploited." The Justice Department had filed briefs backing students in the case.

The high court's decision also drew praise from advocates for student-athletes and lawmakers eager to revamp the NCAA system.

"The NCAA collusion machine, designed to keep college athletes impoverished so the billions in profits can be kept for a small cabal of insiders, is finally starting to crumble to pieces," said Sen. Chris Murphy (D-Conn.), who has introduced legislation to provide name, image and likeness rights to student-athletes.

Senate Commerce Chair Maria Cantwell (D-Wash.) — whose panel has jurisdiction over any legislation — said the decision gives "new urgency" to congressional efforts to set nationwide compensation standards and offer athletes additional health benefits.

The NCAA has been pressing Congress for a federal law that offers the association some protection from antitrust lawsuits and sets national rules on players’ ability to profit off their publicity rights.

And on Monday, the NCAA said the Supreme Court’s decision “reaffirms” the association’s authority to adopt rules on what qualify as educational benefits.

“Even though the decision does not directly address name, image and likeness, the NCAA remains committed to supporting NIL benefits for student-athletes,” NCAA President Mark Emmert said in a statement. “Additionally, we remain committed to working with Congress to chart a path forward, which is a point the Supreme Court expressly stated in its ruling.”

Still, the suit, NCAA v. Alston, named for former West Virginia running back Shawne Alston, is one of several antitrust cases filed by current and former college athletes against the NCAA. Both a trial judge and appeals court found that the NCAA’s limits on education-related benefits violated antitrust laws, leading the organization to appeal to the Supreme Court in an effort to protect the organization’s governance model for roughly 1,200 member schools and athletic conferences.

Justice Brett Kavanaugh, in a scathing concurring opinion, lambasted the NCAA for its arguments that it was immune from antitrust scrutiny.

“Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate. And under ordinary principles of antitrust law, it is not evident why college sports should be any different. The NCAA is not above the law,” Kavanaugh wrote.

In its majority decision, the high court clarified that it was only ruling on the NCAA's limits on education-related benefits. But Kavanaugh went further, suggesting that more of the NCAA's player restrictions could be struck down.

"The NCAA must supply a legally valid procompetitive justification for its remaining compensation rules," Kavanaugh wrote. "As I see it, however, the NCAA may lack such a justification."

For now, though, the immediate consequences of Monday’s decision will fall onto individual colleges and athletic conferences.

“University presidents and conference commissioners will need to play an even larger role because the NCAA’s role is weakened here,” said Amy Perko, CEO of the Knight Commission college sports reform group.

Athlete benefits may expand on a conference-by-conference basis and some universities may start to offer graduate degrees as part of recruiting athletes, she said. The high court's ruling could also expand medical benefits available to players, such as disability insurance, by striking down existing limits on what institutions can pay, Perko said.

B. David Ridpath, an Ohio University sports business professor and past president of the Drake Group higher education think tank, called the court’s decision "another nail in the coffin of a broken system.”

“We are the only country in the world that has a significant portion of elite athlete development in the education system," he said. "We cannot hold on to the old system anymore. It’s over."