Today’s guest columnist is Martin Edel of the Goulston & Storrs Sports Law Practice.
Pressure continues to build from states, courts, boosters and athletes to stop the NCAA from enacting and enforcing rules that affect student-athletes’ compensation and recruitment. In cherry-picking language from the United States Supreme Court’s decision in NCAA v. Alston, these forces claim NCAA rules limiting the amounts or sources of student-athlete compensation result in anti-competitive harm and no competitive benefits. This analysis is short-sighted: To maintain consumer demand for college sports, the NCAA needs to be responsible for imposing and enforcing rules that differentiate college from professional sports. And, to preclude abuses, the NCAA needs to be able to maintain recruitment rules.
In 2015, the Ninth Circuit Court of Appeals held in O’Bannon v. NCAA that NCAA rules that precluded student-athletes from monetizing their name, image and likeness rights violated antitrust laws. The O’Bannon court found that while the NCAA had shown that amateurism was a pro-competitive benefit, the competitive harms of precluding NIL monetization outweighed that benefit—and, in any event, there were less restrictive means to achieve the same result. In its 2021 Alston decision, the Supreme Court held NCAA rules that limited the amount that a college could pay a student-athlete for “additional educational expenses” violated the antitrust laws. In Justice Brett Kavanaugh’s concurring opinion (which no other Justice joined), he opined, “[the NCAA’s] compensation rules also raise serious questions under the antitrust laws” that are not limited solely to educational benefits.
But, of note, the Supreme Court found there was significant consumer demand for college sports, which consumers found different from professional sports. The Court did not address what would happen if an NCAA compensation rule affected non-educational benefits or if it were necessary to prevent marketplace abuses.
Since 2021, many states adopted laws—and the NCAA changed its rules—to permit student-athletes to monetize their NIL rights. The new rules did not create an unbridled license for student-athletes, schools and licensing arms like NIL collectives. To prevent abuses and maintain a distinction between college and professional sports, the NCAA enacted prohibitions against member schools funneling money directly to student-athletes for NIL rights, member schools luring prospective athletes by guaranteeing NIL dollars before those prospective students enroll and boosters or collectives becoming involved in recruiting or in guaranteeing NIL dollars to prospective students.
Relying on Justice Kavanaugh’s language, recent attacks against NCAA rules have focused on NIL and recruitment of prospective athletes. In January, Virginia and Tennessee challenged NCAA recruitment rules and their enforcement, claiming these rules limit the amount prospective student-athletes can obtain from NIL licensing as well as what collectives and schools can guarantee to lure student-athletes to their school. Last week, a Tennessee federal court denied the universities’ request for a temporary restraining order. The district judge, nonetheless, wrote that he believes these NCAA rules violate antitrust laws because the pro-competitive benefits of amateurism (and the integration of academics and athletics) might be achieved through less restrictive means—namely, requiring the student-athletes provide athletic performance for their NIL dollars or that the colleges compensate the students directly.
This argument ignores college sports’ unique nature. In both O’Bannon and Alston, the courts found there was significant consumer demand for college sports, which created a separate market from professional sports. Why? In part, because college athletes have the opportunity to receive a college education, few athletes become professional (1.6%) and, as courts have held, “unlimited payments unrelated to education,” such as “professional-level cash payments . . . could blur the distinction between college sports and professional sports and thereby negatively affect consumer demand.” Thus, if there is consumer demand for college sports—and all evidence points to that demand—NCAA rules that maintain the distinction between college and professional sports enhance consumer demand for the college level and enable it to compete more effectively with the pros.
How do we distinguish between compensation rules that are unrelated to education and those that are related? First, do these rules limit “professional-level cash payments” untethered to education which “blur the distinction between college and professional sports?” If the answer is “yes,” these compensation rules preserve or enhance consumer demand for college sports and contain significant pro-competitive benefits that outweigh the anti-competitive harm to maintain the college sports market. Second, if the compensation rules are tethered to education (such as caps on “additional educational benefits”), the rules do not primarily preserve consumer demand and the NCAA would need to identify and prove pro-competitive benefits.
Through this lens, the NIL recruiting rules that bar guaranteed payments to prospective students are unrelated to education. They maintain “the distinction” between college and professional sports because these “professional-level cash payments,” including guarantees or sign-on bonuses in advance of enrollment, blur the distinction. They are the same type of professional cash payments that professional athletes receive.
Even if these recruiting rules somehow are tethered to education (as the Tennessee court suggests), they are not automatically unreasonable under the antitrust laws. Courts still need to balance anti-competitive harm against pro-competitive benefits. Do these rules limit the impact of boosters (a recurring problem against which the NCAA has fought) and preserve consumer choice in the college sports market? Do these benefits outweigh the anti-competitive harm? Are there less restrictive alternatives to recruiting limitations?
The current attacks seeking to eliminate the NCAA’s role and rules miscomprehend the Alston ruling and the unique nature of college athletes and sports. Student-athletes are not professional athletes, and consumers view college sports differently from professional sports. The NCAA plays a crucial role in maintaining those distinctions. They need to be affirmed.
Martin Edel is co-chair of the Goulston & Storrs Sports Law Practice. He teaches Sports and the Law at Columbia Law School and, for over a decade, has been a Superlawyer® in Sports.
