Court sides with ex-athletes in NCAA compensation case
Ruling bars caps on what schools can offer in academic benefits
The Supreme Court unanimously ruled Monday that the NCAA cannot impose limits for education-related compensation and benefits for athletes in a decision that could impact hundreds of Bay Area students as well as the local universities that participate in major college sports.
The 9-0 vote could signal the start of reshaping a billion-dollar industry that has not permitted athletes to make money off their fame and has relied on scholarships as the chief source of compensation.
The case doesn’t decide whether students can be paid salaries. Instead, the ruling bars the NCAA from capping what schools can offer students in academic benefits including tutoring, study abroad programs and graduate scholarships.
The high court’s ruling came seven years after UC Berkeley basketball player Justine Hartman and former West Virginia running back Shawne Alston led a class action suit that alleged the NCAA violated antitrust laws.
Hayley Hodson, a Stanford volleyball star who suffered two concussions in 2015 and eventually had to medically retire, hailed the ruling as a first step toward changing the course of NCAA governance that has operated as a monopoly for decades.
“Not everybody has the same economic value but just capping it and saying you don’t get to try is deeply un-American and very paternalistic,” said Hodson, now a UCLA law student.
While the decision involved only payments and other benefits related to education, Justice Brett M. Kavanaugh suggested in a blistering concurring opinion that the landscape needs to change.
“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,” 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.”
Hodson said Kavanaugh’s opinion could “open the floodgates to strike down additional NCAA rules under antitrust law.”
The Supreme Court ruling comes at a time when the collegiate sports business model has come under pressure as schools faced deficits during the coronavirus pandemic when games in the revenue-earning sports of football and basketball were either canceled or played with limited or no attendance.
Last month, Stanford University officials announced plans to reinstate 11 sports programs they had planned to cut in a proposed move meant to combat escalating costs and loss of revenue.
Spokespeople at UC Berkeley, Stanford and San Jose State issued brief statements Monday saying university officials were reviewing the court’s ruling.
“This is a significant decision with the potential for a far-reaching impact,” the Berkeley statement added.
David G. Feher, one of the lead counsels representing the athletes, said Monday he hopes the decision will press NCAA officials to “actually live the mission of enhancing educational opportunities instead of imposing restrictions that harm students.”
In a statement on Monday, the NCAA said the ruling “reaffirms the NCAA’s authority to adopt reasonable rules and repeatedly notes that the NCAA remains free to articulate what are and are not truly educational benefits.”
While the case focused solely on specific compensation, another part of the changing landscape involves whether athletes can earn money off their names, images and likenesses. State lawmakers in California and elsewhere have passed legislation giving athletes more options to monetize their brands.
Feher, co-chair of Winston & Strawn’s Sports Law Practice, said the overall climate has changed as more people understand how distorted the college sports marketplace has become. While coaches and administrators are making millions of dollars, the athletes have been restricted by NCAA rules on amateurism.
“I really think the blinders are coming off a lot of people,” Feher said. “They are seeing there is something fundamentally unjust with administrators and coaches being the highest paid employees in their states.”
State Sen. Nancy Skinner, D-Berkeley, co-author of the Fair Pay to Play Act that allows California athletes to earn money off their names, praised the justices for saying no to the NCAA.
“For far too long, the NCAA has pocketed billions off the hard work and talent of student athletes while limiting the support colleges can provide and denying athletes any of that wealth,” she said in a statement.
When the NCAA started more than a century ago, the sports marketplace was vastly different. But as deals for television rights brought huge windfalls to everyone but the athletes, many anti-NCAA critics began calling for an overhaul of the system.
Feher said it will never happen without the leadership forced into making concessions.
“The NCAA has had authority that is so unfettered that they could benefit themselves, that it is fantasyland to expect those people to forgo their self-interests,” he said.
Hodson, the former Stanford volleyball player, said collegiate athletes generate value for their universities and the NCAA with direct revenue or brand-building that are worth way more than the traditional compensation of a scholarship, books and room and board.
“What you get in exchange is a lifelong injury,” she said. “And that is really problematic to not have workers’ comp, to not have guaranteed protections in place in addition to just some basic human rights.”