US Supreme Court: Rejects Some NCAA Compensation Limits

CITY OF WASHINGTON (June 21, 2021)—today the U.S. Supreme Court ruled  ruled against the National Collegiate Athletic Association  (NCAA) in the organization’s efforts to place limits  on education-related compensation for them that critics have said help maintain the fiction of amateurism in college sports.

The court ruled 9-0 that the NCAA’s curbs on non-cash payments to college athletes related to education – including incentives such as vehicles, computers, science equipment and musical instruments – are anticompetitive under a federal law called the Sherman Antitrust Act. The NCAA is the major governing body for U.S. intercollegiate sports.

“Colleges and universities across the country have leveraged sports to bring in revenue, attract attention, boost enrollment, and raise money from alumni. That profitable enterprise relies on “amateur” student athletes who compete under horizontal restraints that restrict how the schools may compensate them for their play. The National Collegiate
Athletic Association (NCAA) issues and enforces these rules, which restrict compensation for student-athletes in various ways. These rules depress compensation for at least some student-athletes below what a competitive market would yield.

“Against this backdrop, current and former student-athletes brought this antitrust lawsuit challenging the NCAA’s restrictions on compensation. Specifically, they alleged that the NCAA’s rules violate §1 of the Sherman Act, which prohibits “contract[s], combination[s], or conspirac[ies] in restraint of trade or commerce,” wrote the Court.

The NCAA and its members have agreed to compensation limits for student-athletes; the NCAA enforces these limits on its member-schools; and these compensation limits affect interstate commerce. Following a bench trial, the district court issued a 50-page opinion that refused to disturb the NCAA’s rules limiting undergraduate athletic scholarships and other compensation related to athletic performance. At the same time, the court found unlawful and thus
enjoined certain NCAA rules limiting the education-related benefits schools may make available to student-athletes. 

Justice Gorsuch delivered the opinion of the Court. “In the Sherman Act, Congress tasked courts with enforcing a policy of competition on the belief that market forces “yield the best allocation” of the Nation’s resources.

Gorsuch further wrote  that the lawsuit alleged that ” the National Collegiate Athletic Association (NCAA) and certain of its member institutions violated this policy by agreeing to restrict the compensation colleges and universities may offer the student-athletes who play for their teams. After amassing a vast record and conducting an exhaustive trial, the district court issued a 50-page opinion that cut both ways.”

Gorsuch further wrote  that the “court refused to disturb the NCAA’s rules limiting undergraduate athletic scholarships and other compensation related to athletic performance. At the same time, the court struck down NCAA rules limiting the education-related benefits schools may offer student-athletes—such as rules that prohibit schools from offering graduate or vocational school scholarships.”

Read the entire Courts Decision here.

Source: US Supreme Court

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