On June 21, 2021, the U.S. Supreme Court unanimously upheld a Ninth Circuit ruling that the National Collegiate Athletic Association’s (NCAA) rules limiting athletes’ education-related compensation and benefits violate U.S. antitrust laws.
In Alston v. NCAA, the high court resolved a circuit split on whether the NCAA rules limiting education-related benefits to student athletes was in violation of the Sherman Anti-Trust Act. Previously, several circuit courts had upheld the NCAA’s rules against antitrust challenges prior to the Ninth Circuit’s May 2020 injunction against the rules.
While the Alston ruling did not address whether student-athletes are entitled to financial compensation under antitrust laws, it will allow all student-athletes to receive education-related benefits such as reimbursements for computer equipment, tutoring, stipends for internships and academic achievement cash awards without compromising their NCAA eligibility.
Writing for the unanimous court, Justice Neil Gorsuch noted that “the NCAA is free to forbid in-kind benefits unrelated to a student’s actual education; nothing stops it from enforcing a ‘no Lamborghini’ rule. And, again, the district court invited the NCAA to specify and later enforce rules delineating which benefits it considers legitimately related to education. To the extent the NCAA believes meaningful ambiguity really exists about the scope of its authority— regarding internships, academic awards, in-kind benefits, or anything else—it has been free to seek clarification from the district court since the court issued its injunction three years ago.”
The NCAA argued that Board of Regents v. NCAA, which referred to the “revered tradition of amateurism in college sports,” should provide protection for the NCAA’s current rule system, which promotes the noncommercial aspects of higher education. In the absence of such deference, the NCAA further contended that an adverse ruling would impact its ability to operate joint ventures in order to “create a desirable product.”
However, the Court rejected those arguments, observing that, “The NCAA accepts that its members collectively enjoy monopsony power in the market for student-athlete services, such that its restraints can (and in fact do) harm competition…To the extent [the NCAA] means to propose a sort of judicially ordained immunity from the terms of the Sherman Act for its restraints of trade—that we should overlook its restrictions because they happen to fall at the intersection of higher education, sports, and money—we cannot agree. This Court has regularly refused materially identical requests from litigants seeking special dispensation from the Sherman Act on the ground that their restraints of trade serve uniquely important social objectives beyond enhancing competition.”
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