The Supreme Court of the United States heard arguments on Wednesday about the financial limits placed on NCAA athletes in a case that could significantly shape the future of college sports.
During the past dozen years, the NCAA has slowly loosened its restrictions on the types of benefits college athletes in its system are allowed to receive — a list that now includes payments that cover the full cost of attending college, additional healthcare and a pool of money that is distributed to help athletes with unexpected expenses such as having to fly home for a family member’s funeral.
Changes have come largely in response to steady pressure from federal antitrust lawsuits. The case in front of the Supreme Court this week, Alston v. NCAA, is the latest push to add more. While the case doesn’t deal directly with athletes signing endorsement deals (more on this below), the justices’ decision could prove to be the first major lever pulled in what promises to be a transformative summer when it comes to college athletes making money.
For the first time in a generation, the nation’s highest court is gearing up to weigh in on the business model of college sports. The case boils down to a simple and essential question: Who should get to define the limits of amateurism? Here’s what you need to know heading into Wednesday’s hearing.
What is the Alston case about?
A former West Virginia University football player named Shawne Alston sued the NCAA in 2014, claiming the organization violates the Sherman Antitrust Act by placing limits on what each school is allowed to give its athletes in exchange for their athletic ability. The Sherman Act says, in part, that businesses from the same industry cannot collude to hinder the kind of competition that drives America’s economic system. Alston’s legal team argued that when the NCAA’s member schools mutually agree to place a cap on what they provide, it illegally prevents athletes from cashing in on their true value.
In this case and several others like it, the NCAA and its members have argued those limits are necessary to maintain amateurism, which they believe is essential to the success of their business. They contend fans will be less interested and pay less money to watch college games if they view the participants as minor league professionals instead of seeing them as students representing their school.
Judge Claudia Wilken, who has presided over most of the recent NCAA lawsuits from her courtroom in Northern California, decided in 2019 that the NCAA should be able to maintain its appeal with fans who want to think of college athletes as students as long as all the benefits that athletes receive are in some way “tethered to education.” Therefore, in deciding the Alston case, she ruled that the NCAA could not place any limits on the education-related benefits that individual schools can give their athletes. Those benefits include equipment such as laptops and musical instruments, funding for internships and study abroad programs, and limited cash rewards for getting good grades.
The NCAA appealed Wilken’s decision in 2020 and lost. Now, it is asking the Supreme Court to intercede.
The NCAA’s attorneys claim Wilken’s guidelines provide too much wiggle room and will become “thinly disguised” methods for schools to pay athletes for playing their sports. They argue Wilken overstepped her authority and is micromanaging decisions that the NCAA should be making about where to draw a line between amateurs and professional athletes. They contend this takes away the “ample latitude” to make the NCAA’s own rules that was given to the NCAA by a Supreme Court ruling nearly 40 years ago.
What has the court previously said about the NCAA?
The Supreme Court has not ruled on a case involving the NCAA since a pair of decisions made in the 1980s. One of them was a case about sanctions levied against UNLV men’s basketball coach Jerry Tarkanian. The other laid the foundation for the industry’s massive financial growth in the last quarter century and set precedent that has fueled legal arguments ever since.
That second case, NCAA v. Board of Regents of the University of Oklahoma, was an argument over television rights. Prior to the case, the NCAA strictly limited the number of games that were broadcast on television. The Supreme Court upheld a decision that each school should get to decide how often its teams appear on television and how to negotiate with the media companies that pay to broadcast the games.
A steep increase in televised games followed and eventually led to conferences starting their own television networks. Both are steps that helped to create a business that generates billions of dollars each year and has spurred athletes to ask for a bigger cut of the profits.
Justice John Paul Stevens, who was an antitrust litigator prior to becoming a judge, wrote the Supreme Court’s opinion in the Regents case. His 7,500-word 1984 opinion determined that the NCAA was violating the law by controlling the schools’ media rights, but it concluded with one paragraph that said: “The NCAA plays a critical role in the maintenance of a revered tradition of amateurism in college sports. There can be no question but that it needs ample latitude to play that role… [but] rules that restrict output are hardly consistent with this role.”
In other words, the NCAA should be allowed to make its own rules as long as it is acting in a way that preserves the amateur tradition of college sports.
The NCAA has used those couple of sentences as the basis of its legal defense in antitrust cases ever since. Opponents assert the NCAA acts as a professional enterprise — rather than guardians of amateurism — in all of its decisions except for when it comes to the limits it places on athletes. Some legal scholars maintain the organization is taking Stevens’ words out of context and trying to apply them far too broadly. Now, a court still populated by several justices who worked side by side with Stevens for many years will have an opportunity to either solidify those words or reframe them in a different context.
How does this case impact forthcoming rules about name, image and likeness rights?
The Alston case does not deal directly with the topic of name, image and likeness (NIL) rights. The Supreme Court’s decision, however, could be the first of several key decisions that play a part in determining what rules will regulate endorsement deals for college athletes in the future and who gets to be in charge of making those rules.
A confusing web of state laws, federal bills and proposed NCAA rule changes are set to collide this summer in a way that is likely to give college athletes the opportunity to make money in a variety of new ways by the start of the next school year. The NCAA is hoping to maintain some control or influence on the details of what kind of moneymaking opportunities athletes will have.
The market for NIL deals is scheduled to open in some states as early as July 1. The NCAA is hoping that Congress will supersede state laws with a uniform national law that regulates the future marketplace. The organization was planning to vote on its own proposed NIL rules (which are more restrictive than the state laws) in January but opted to indefinitely postpone that vote.
The Supreme Court’s somewhat surprising choice in December to hear the Alston case was a key factor in why the NCAA decided to delay its vote, according to several college sports leaders who were involved in that decision. If the court decides to issue a broad ruling that reaffirms the NCAA’s ample latitude to make its own rules, it could provide the association with some desperately needed leverage in the multitiered battle this summer over who gets to decide the details of future NIL rules.
If Congress doesn’t act on a college sports bill before July, the NCAA could file for injunctions against states with NIL laws to try to keep them from going into effect this summer. That is likely the one remaining path that would keep the NIL marketplace from opening in at least some states before the start of the next school year. An NCAA-friendly ruling from the Supreme Court in the Alston case could bolster its odds in those types of lawsuits. A ruling that falls in favor of the plaintiffs or upholds Judge Wilken’s decision could add firepower for the state and federal lawmakers who are pushing to create a less-restricted endorsement market and more widespread change in college athletics.
Why did the Supreme Court decide to hear this case?
The Supreme Court rules on roughly 100 to 150 cases each term, which is somewhere between 1% and 2% of the requests for appeals that it receives.
While the court does not directly address why it hears each case, legal scholars say there are a variety of factors that can lead the group of nine judges to take an interest. They are not blind to the public’s interest in a particular subject, and the mounting efforts to change state and federal laws related to college sports might have been one reason the court decided the time was right for another NCAA decision.
The court is also sometimes inclined to take on a case when some type of clarification of interpretation could help to alleviate an abundance of litigation around one issue. In its request for an appeal, the NCAA argued that it faces an unfair burden by having to defend its rules in a steady stream of antitrust lawsuits such as the Alston case.
When will we have an answer?
Wednesday’s hearing will give each side a chance to argue its case and answer questions from the nine justices. A final decision from the Supreme Court will likely come in May or June, shortly before state NIL laws start going into effect. That opinion could remain very narrowly focused on the education-related benefits in question in the Alston case or it could address NCAA’s control over amateurism in a much broader way.
The questions posed by the justices this week might provide some good clues as to how broadly they view the case and where they might land on an eventual ruling. NCAA leaders, advocates for aggressive reform and politicians from every corner of the country will be watching closely.