Supreme Court to hear dispute over NCAA’s athlete compensation rules

The Supreme Court on Wednesday agreed to hear a dispute over whether the National Collegiate Athletic Association’s (NCAA) rules on student athlete compensation violate antitrust law, a potentially landmark case that could reshape collegiate sports.

The court will consider the NCAA’s appeal from lower court rulings that found the association’s limits on non-cash benefits for education-related expenses like computers, study-abroad programs and graduate school tuition were invalid.

In its request for appeal, the NCAA told the justices that if the rulings below were allowed to stand, it would “fundamentally transform” the nature of college athletics by “blurring the traditional line between college and professional athletes.”

The dispute arose in 2014 when a group of current and former college athletes sued the NCAA in federal district court in California over its restrictions on player compensation. The players maintain that the NCAA’s rules run afoul of antitrust provisions that make it illegal for competitors — in this case colleges — to restrain competition for talent and labor.

“The NCAA and its member conferences and schools receive billions of dollars every year through the hard work, sweat, and sometimes broken bodies of student-athletes,” they wrote in a Supreme Court filing. “Coaches, assistant coaches, and athletic directors take millions in salaries.

“Yet the schools have agreed among themselves to limit what student-athletes may receive for their work in generating these extraordinary revenues,” the student athletes’ brief continued.

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.

A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit affirmed that decision in May 2020.

The justices will hear arguments in the case likely this spring, with a decision expected before the term ends in late June.

Michael Rueda, a partner at the law firm Withers, where he heads their U.S. sports and entertainment division, said he sees a benefit in allowing student-athletes to receive education-based compensation.

“I think from the NCAA perspective, it’s not as drastic of a change” as allowing players to monetize commercial reproduction of their “name, image and likeness,” said Rueda, who played college soccer at the University of Connecticut.

“I was a student athlete once too, and I do appreciate the NCAA. I think there’s value in the NCAA in its form,” he added. “But I do think there are some changes that are beneficial to those students.”

Several competing legislative proposals have also been introduced in Congress that would allow students athletes to receive compensation, either through a revenue-sharing arrangement or by monetizing instances where their “name, image and likeness” are commercially reproduced.