Supreme Court seems wary of NCAA limits on student-athlete compensation

The Supreme Court on Wednesday appeared skeptical of restrictions the National Collegiate Athletic Association (NCAA) places on education-related benefits that schools can offer student athletes.

During oral arguments, the justices probed the NCAA’s claim that limits on things like computers, study-abroad programs and graduate school tuition are necessary to preserve the quality of amateurism that distinguishes college from professional sports. 

“The way you talk about amateurism, it sounds awfully high-minded,” Justice Elena Kagan told an attorney for the NCAA. “But there’s another way to think about what’s going on here.”   

“And that’s that schools, that are naturally competitors as to athletes, have all gotten together in an organization, an organization that has undisputed market power,” she continued, “and they use that power to fix athletic salaries at extremely low levels — far lower than what the market would set if it were allowed to operate.”

The dispute arose after a group of college athletes sued the NCAA in 2014, alleging the association’s rules on player compensation run afoul of antitrust laws which bar certain restraints on the competition for talent and labor. 

Even as the court grilled the NCAA, several justices expressed concern that a broad ruling against the association could open the floodgates to future lawsuits and eventually erode what gives college sports its distinctive appeal.

“How do we know that we’re just not destroying the game as it exists?” Justice Sonia Sotomayor asked.

Seth Waxman, a former solicitor general during the Clinton administration who argued for the NCAA, said schools’ cooperation on setting compensation rules for athletes was necessary to prevent a pay-for-play dynamic from emerging. Allowing such a scheme, he said, would blur the critical line between student-athletes and their professional counterparts. 

“The cost of labor in this unique instance is what is the differentiating feature that provides a pro-competitive product,” he told the justices.

The NCAA appealed to the Supreme Court after losing two rounds in lower courts.

In a March 2019 ruling siding with the college-athletes, U.S. District Court Judge Claudia Wilken found that NCAA’s limits on “computers, science equipment, musical instruments and other tangible items […] related to the pursuit of academic studies” were unlawful and blocked its application.

A three-judge panel of the U.S. Court of Appeals for the 9th Circuit affirmed that decision in May, prompting the NCAA’s appeal.

The Department of Justice is backing the student athletes in their suit. 

A decision in the case, NCAA v. Alston, No. 20-512, is expected by late June.

Updated at 12:51 p.m.