Along with the Britney Spears conservatorship case, legal analysts and lawyers have been closely following an entirely different legal matter in 2021: the NCAA v. Alston case. For years, college students receiving sports scholarships have been restricted from making money — all the while bringing in billions of dollars in tickets and merchandise for the colleges they attend. Many lawsuits have addressed the concerning fact that educational institutions and the National Collegiate Athletic Association (NCAA) have benefited financially from student athletes, while the athletes themselves have made nothing other than academic scholarships.
As attorneys and fans of college football, we have closely followed the recent NCAA v. Alston case, which addressed an important question that has been asked for decades: Did NCAA rules blanketly prohibiting student-athletes from receiving certain types of compensation violate federal antitrust laws? The NCAA long downplayed this argument and other similar arguments by maintaining that student athletes recruited to play for colleges are “amateurs.” Critics and attorneys representing athletes have argued that the NCAA’s definition of amateurism is archaic and that student athletes deserve to be compensated because others are profiting from their names, images, and likenesses.
Eventually, the matter made its way to the highest court, and in June 2021, the Supreme Court unanimously affirmed lower court rulings and held that long held restrictions prohibiting student athletes from being compensated were a violation of antitrust laws. NCAA v. Alston addressed the NCAA’s prohibitions on providing college athletes with non-cash compensation for academic-related purposes, such as computers and internships. Justice Kavanaugh, in a separate concurrence to the ruling, proposed that the NCAA should pause and consider whether the key distinguishing feature of NCAA competition is that the athletes are not paid a salary for their services.
Of course, the Alston case was not the first case to address the issue of compensation to athletes. In 2014, a class action suit brought against the NCAA argued that student athletes should be entitled to financial compensation for NCAA’s commercial use of athlete images — such as in highly profitable EA Sports NCAA Basketball and NCAA Football video games.
In O’Bannon v. NCAA, Judge Claudia Wilken ruled that the NCAA’s long-established practice of prohibiting payments to student athletes was a violation of antitrust laws. Judge Wilken ordered that schools should be permitted to offer full cost-of-attendance scholarships to include the cost-of-living expenses that were not currently covered. Additionally, she ruled that colleges could be permitted to place money — up to $5,000 per year — in a trust for students. While the NCAA subsequently appealed the ruling, the Supreme Court denied the appeal and the NCAA was also ordered to pay plaintiffs more than $42 million in fees and costs.
With the unanimous supreme court ruling last month in NCAA v. Alston, the passage of laws to improve compensation for college athletes in endorsements and sponsorships are likely to be accelerated. President Biden even weighed in, stating he “believes that everyone should be compensated fairly for his or her labor.”
Many of the NCAA rules on recruiting and sponsorships will not be changing. However, colleges and universities will be establishing their own rules and strategies for benefits, compensation, and use of image and likeness. In the aftermath of the NCAA ruling, many important conversations are just getting started. For current athletes and high school students being recruited, the possibilities remain to be seen.