The Supreme Court’s justices on Wednesday expressed significant questions about the NCAA’s athlete-compensation limits, but they also showed concerns that a case challenging those limits could destroy college sports as they currently exist.
Their comments came during oral argument in a case appealed by the NCAA and 11 major-conference co-defendants after lower courts ruled that the association’s compensation limits violate antitrust trust law and that there should be no nation-wide limits on the education-related benefits athletes playing Division I men’s or women’s basketball or Bowl Subdivision football can receive.
The arguments were heard by teleconference, as has been the high court’s procedure during the COVID-19 pandemic. A ruling is expected later this spring or in early summer.
Among the benefits that would be allowed by the lower courts are cash payments for various academic achievements, scholarships to complete undergraduate or graduate degrees at any school and paid internships after they have completed their collegiate-sports eligibility.
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The NCAA’s lawyer, Seth Waxman, contended that legal precedents and the law itself should allow the NCAA to set the compensation rules because the public benefits from having a choice between pro and amateur sports, as the NCAA defines amateur sports.
However, he faced pointed inquiry from nearly all of the justices, with Justice Brett M. Kavanaugh asserting that “the antitrust laws should not be a cover for exploitation of the student-athletes.”
Kavanaugh added: “It does seem … schools are conspiring with competitors — agreeing with competitors, let’s say that — to pay no salaries for the workers who are making the school billions of dollars on the theory that consumers want the schools to pay their workers nothing. And that just seems entirely circular and even somewhat disturbing.”
On the other hand, Chief Justice John G. Roberts Jr., in questioning the plaintiffs’ attorney, Jeff Kessler, talked about the notion the decision by — and the additional benefits — approved by lower courts in this case could lead more and more legal erosion of any limits on athletes compensation.
“It’s like a game of Jenga,” Roberts said. “You’ve got this nice solid block that protects the sort of product the schools want to provide. And you pull out one log and then another and everything’s fine and another and another. And all of a sudden the whole thing comes crashing down. So what’s your answer to that way of looking at it?”
Kessler responded that in this instance the issue is only about education-related benefits.
However, there already is a new case under way that not only asks that the NCAA be prevented from having association-wide rules that “restrict the amount of name, image, and likeness compensation available” to athletes but also seeks unspecified damages based on the share of television-rights money and the social media earnings the plaintiffs claim athletes would have received if the NCAA’s current limits on NIL compensation had not existed.
That case is being directed by some of the lawyers involved in the case that was argued Wednesday. And it is pending before the same U.S. district court judge who handled this case, as well as a previous case on behalf of former UCLA basketball star Ed O’Bannon that helped set up this case, which was brought on behalf of former West Virginia football player Shawne Alston.
Addressing acting solicitor general Elizabeth Prelogar, who joined the arguments for the plaintiff because the Justice Department has taken a position on the case in their favor, Justice Sonia Sotomayor said: “I’m not sure that you have given me comfort on some of the questions that my colleague, the chief justice, asked, which is, ‘How do we know that we’re not just destroying the game as it exists, meaning we’re being told by Mr. Waxman that all of these educational-related payments can become extravagant and, as a result, be viewed by the public as pay for play?’ ”
Or, as Justice Elena Kagan called it during questioning of Kessler, “the kind of floodgates argument – like what’s next? (Athlete compensation) is just going to go up and up and up, and pretty soon it will just be a regular labor market.”
But Kagan also showed little interest in the NCAA’s long-stated position that its right to set athlete-compensation limits are well-grounded is grounded in the Supreme Court’s decision in NCAA v. Board of Regents of the University of Oklahoma, a case relating to control of football television rights that the high court decided in 1984. The NCAA lost that case, but, as it has in many other legal filings over the years, it now points to language from that ruling that says NCAA rules prohibiting athletes from being paid to play are essential if its “product” — amateur college sports — “is to be available at all.”
Kagan said the NCAA’s talk about its tradition of amateurism “sounds awfully high minded,” but “a great deal has changed even since Board of Regents … So I guess it doesn’t move me all that much that there’s a history to this if what is going on now is that competitors as to labor are combining to fix prices.”
Kagan’s concerns on both sides of the issue were echoed by Justice Stephen Breyer. He confronted plaintiffs’ attorney Kessler with a monologue that he conceded had some less-than-promising implications for the plaintiffs, But he seemed to be thinking out loud and he summed up by saying: “Now, I’m telling you my real thoughts.”
Those thoughts included college sports, but they also ran into implications outside of college sports, such as the potential impact of a ruling in the NCAA’s favor on cases involving technology companies that might end up having to be given considerable antitrust deference if the NCAA gets it here.
Said Breyer: “It’s a tough case for me. And the reason it’s so tough is for me is because this is not an ordinary product. This is an effort to bring into the world something that’s brought joy and all kinds of things to millions and millions of people. And it’s only partly economic, okay?
“So, I worry a lot about judges getting into the business of deciding how an amateur sport should be run, and I can think of ways around that, you could just say it’s a different kind of product.”
He went on to sketch out several other considerations that he said did not weigh in the plaintiffs’ favor.
But then he added: “Now, having thought out four or five different ways by means of which you lose, I also think I’m very worried about my ways, because how do I do it? If I say these things, I might be also affecting the real economic joint venture, like for technology companies.”