Supreme Court rules against NCAA in compensation battle with college athletes

“Put simply, this suit involves admitted horizontal price fixing in a market where the defendants exercise monopoly control,” Justice Neil Gorsuch wrote for the court.

The conservative justice, an appointee of former President Donald Trump, wrote that it was “unclear exactly what the NCAA seeks.”

“To the extent it 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,” Gorsuch wrote.

The outcome was largely expected following oral argument in March. The decision upheld an injunction imposed by a federal district court that barred the NCAA from limiting “compensation and benefits related to education.” The 9th U.S. Circuit Court of Appeals earlier approved of the injunction.

In allowing the injunction, Gorsuch wrote that the NCAA can ask lawmakers to carve out an exception for it.

“The NCAA is free to argue that, ‘because of the special characteristics of [its] particular industry,’ it should be exempt from the usual operation of the antitrust laws — but that appeal is ‘properly addressed to Congress,'” Gorsuch wrote.

“Nor has Congress been insensitive to such requests. It has modified the antitrust laws for certain industries in the past, and it may do so again in the future,” Gorsuch wrote. “But until Congress says otherwise, the only law it has asked us to enforce is the Sherman Act, and that law is predicated on one assumption alone — ‘competition is the best method of allocating resources’ in the Nation’s economy.”

The case was originally brought by Shawne Alston, a former West Virginia running back, and other student athletes. The dispute, known as National Collegiate Athletic Assn. v. Alston, No. 20-512, is separate from the ongoing controversy over NCAA rules that restrict athletes from being paid to play or for doing endorsement deals.

The latter rules have not yet come before the Supreme Court, and the court’s opinion did not weigh on their legality.

However, Trump appointee Justice Brett Kavanaugh suggested in a blistering concurrence to Monday’s opinion that those rules may also run afoul of antitrust law. He wrote that “The NCAA is not above the law” and that “The NCAA’s business model would be flatly illegal in almost any other industry in America.”

“Everyone agrees that the NCAA can require student athletes to be enrolled students in good standing. But the NCAA’s business model of using unpaid student athletes to generate billions of dollars in revenue for the colleges raises serious questions under the antitrust laws,” Kavanaugh wrote.

He added that it was “highly questionable whether the NCAA and its member colleges can justify not paying student athletes a fair share of the revenues on the circular theory that the defining characteristic of college sports is that the colleges do not pay student athletes.”

“And if that asserted justification is unavailing, it is not clear how the NCAA can legally defend its remaining compensation rules,” Kavanaugh wrote.

Article source: https://www.cnbc.com/2021/06/21/supreme-court-rules-for-college-athletes-in-compensation-dispute-with-ncaa.html