Iowa State University's football team 2016. Photo credit: Emma Dau

U.S. Supreme Court ruled that the NCAA cannot block college athletes from education-related compensation

U.S. Supreme Court decision gives college athletes more bargaining power, shuts down NCAA’s restrictions on college athletes receiving education-related compensation.

The U.S. Supreme Court upheld a Ninth Circuit ruling that struck down NCAA’s efforts of receiving special treatment under anti-trust laws in their restrictions on education-related compensation and benefits for college athletes.

In an unanimous decision, the Justices ruled that the NCAA could not rely on the 1984 Board of Regents v. NCAA case to avoid antitrust scrutiny. Law 360 reports that the ruling allows for athletes to receive more benefits such as “reimbursements for computers and musical instruments, free tutoring, internship stipends and cash academic achievement awards. Such benefits have been closely monitored and limited under NCAA amateurism rules.”

Steve Berman of Hagens Berman Sobol Shapiro LLP, told Law360 the decision is a “big win for the athletes” and will boost other challenges to the NCAA’s rules.

The high court rejected NCAA’s arguments that college athletes fall under amateurism rules that allow colleges and conferences to “create a desirable product.” But the Justices pointed out that education-related payments are an exception.

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In a Daily Bruin report, “UCLA Athletics spends almost $130 million a year . . . Excluding men’s basketball and football, women’s sports on average brought in more revenue than men’s sports in 2019, with gymnastics raking in the most.” Photo credit: Francisco Lerma on Unsplash

“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,” Justice Neil Gorsuch wrote in the opinion for the court.

While this offers an opening in college athletes garnering collective bargaining power to negotiate whether they should receive a share of sports revenue, it redefines sports, and possibly sports scholarships.

“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,” Justice Kavanaugh wrote. “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.”

Already, almost 20 states have passed laws that will allow athletes to earn money through “sponsorships, endorsements and through social media influencer deals, even though such pay is banned by NCAA amateurism rules.” The law for some states goes into effect July 1, 2021.

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