A breakdown of Alston v. NCAA: What is the future of paying college athletes, and what would it mean for athletes to be paid?
By Hayes Rule
T … H … E … S …
I tapped on the keyboard of my iPhone, inputting my sign-in information on my banking app. My fingers moving by nature of habit, they’ve typed this same username more times than one can remember.
It was the usual routine to figure out if I still had enough money in my account to pay for gas, a haircut or a night out to Chipotle with the team.
It’s the reality of college sports that’s not always shown on television.
My time as a college golfer for Mercer University is coming to a close as graduation creeps ever closer: May 13. With approximately 400 student athletes, Mercer competes in the Southern Conference on the NCAA Division I level.
It’s one of 350 schools at the top tier. Approximately 1,100 schools compete across the NCAA, an organization which brings in about $1 billion in revenues per year.
And a lot of people are unhappy about not seeing a sliver of the pie.
When the most recent court case involving the NCAA released its verdict March 8, I couldn’t help but think about the implications from my own shoes: a non-revenue-sport athlete at a mid-major school.
How would life have looked differently if Mercer paid me a salary? Throughout my four years, I worked two to three jobs during the year in order to pay for life expenses. As a walk-on my first year, I remember entering the fall with more than $3,000 in my bank account, feeling like a king.
After having to pay for my first-semester tuition and other life expenses, that $3,000 dropped to a near zero in a couple months.
My story isn’t significantly unusual compared to non-athletes in college, I’m sure. College can be a difficult time financially for anyone. But many today argue against the amateurism model the NCAA currently employs: limiting the compensation athletes can receive despite the gaudy amount of money the organization makes off their performance.
Brennan Bogdanovich is a fellow senior on Mercer’s golf team and served on the Student Athletic Advisory Committee three years. He, like many other athletes, are torn on the issue.
“Who doesn’t enjoy being paid?” Bogdanovich said. “If you told me, “I’m going to pay you $50,000 a year and give you college tuition,’ I’d say, ‘Let’s do it. Why not?’”
But it’s not that simple.
“I think there are some college athletes like myself who understand it would probably come with some consequences,” Bogdanovich said.
What happened in Alston v. NCAA, legally?
Judge Claudia Wilken ruled in Alston v. NCAA that the NCAA could no longer cap the amount of educational benefits a school can reward an athlete. Per her written conclusion, Wilken wrote:
“Restricting non-cash education-related benefits and academic awards that can be provided on top of a grant-in-aid has not been proven to be necessary to preserving consumer demand for Division I basketball and FBS football as a product distinct from professional sports. Allowing each conference and its member schools to provide additional education-related benefits without NCAA caps and prohibitions, as well as academic awards, will help ameliorate their anticompetitive effects and may provide some of the compensation student-athletes would have received absent Defendants’ agreement to restrain trade” (104.10–104.19).
Under the ruling, schools — if allowed by their conferences — could give athletes anything furthering their education, such as computers, musical instruments, science instruments and more.
But there’s one part of the case that went in the NCAA’s favor, possibly making this a case the NCAA technically “lost” but won in the long run: Wilken’s obvious desire to have a clear distinction between college and professional sports.
To understand the legal aspects of this case and the future of paying athletes, it’s important to know the history of it.
The NCAA was founded in 1905, then known as the Intercollegiate Athletic Association (IAA). In its first bylaws, the IAA said athletes could receive no benefits for competing.
By 1956, the NCAA allowed schools to provide athletic scholarships, called “grants-in-aid,” to athletes for anything considered as an educational expense: tuition, fees, room and board, books and cash for things such as laundry. At this time, the amount of scholarship money schools could give was limited.
In 1976, the NCAA amended the policy to limit scholarships to just tuition, fees, room and board and course-related materials. This was the case until 2015, after the ruling in O’Bannon v. NCAA.
Also known as the case that ended EA’s NCAA Football video game series, O’Bannon fought the NCAA on the usage of image and likeness for profit. As a result of O’Bannon, Power Five schools voted to increase the grant-in-aid limit to the full cost of attendance, which is determined at each school via federal regulations.
O’Bannon was the most recent case before Alston.
The Plaintiffs in Alston are former Division I FBS football and men’s and women’s basketball players. They claim the current NCAA rules violate federal antitrust laws “because Plaintiffs would receive greater compensation in exchange for their athletic services in the absence of these artificial limits” (1.23–2.2).
The Sherman Act is the main federal antitrust doctrine. According to Wilken’s ruling, “Section 1 of the Sherman Act makes it unlawful to form a ‘contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States’” (64.12–64.15).
In order for the Plaintiffs to win this case, they had to show that the NCAA (1) had a contract or conspiracy; (2) that this agreement unreasonably restrained trade under either a per se rule of illegality or a rule of reason analysis; and (3) that the restraint affected interstate commerce.
The District Court decided to utilize the rule of reason analysis because the NCAA’s structure necessitated a “certain degree of cooperation” (65.14–15).
Horizontal price-fixing, which is when multiple people conspire to fix pricing to a certain schedule or range, is per se illegal under federal antitrust law.
In the case of the NCAA, horizontal price fixing would be the different conferences and schools agreeing to not pay athletes with the understanding that it would lead to fairness and competitiveness across the board.
Two main issues were argued in the case: whether the current rules were necessary to keep the demand for college athletics and whether these additional benefits would cause student athletes to not be integrated into their campuses.
Issue 1: The demand for college sports and “amateurism”:
In response to the Plaintiffs’ claims, the NCAA argued for its current rules because the rules uphold the idea of amateurism and consumer demand. The Court found flaws with the NCAA’s definition of amateurism and found no evidence suggesting the demand for college sports would decrease with more educational benefits.
The Plaintiffs and Court called the NCAA a “monopsony” in the court document. A monopsony is defined as “a market condition in which there is only one buyer.” This differentiates from a monopoly because “a single buyer dominates a monopsonized market while an individual seller controls a monopolized market.”
The Plaintiffs argued the NCAA is a monopsony because athletes are forced to go to a Division I school. There are no other alternatives that combine education, good competition and exposure on television.
The Court accepted this view by the Plaintiffs, writing that “the NCAA’s Division I essentially is the relevant market for elite college football and basketball. And, because elite student-athletes lack any viable alternatives to Division I, they are forced to accept, to the extent they want to attend college and play sports at an elite level after high school, whatever compensation is offered to them by Division I schools, regardless of whether any such compensation is an accurate reflection of the competitive value of their athletic services” (18.17–19.1).
Keep in mind the Court only said football and basketball because the Plaintiffs in this action were former football and basketball players. Those two sports are especially affected by the current structure.
Other sports, such as golf or tennis, do have some other avenues to the professional game outside of the NCAA. The distinction in the wording above is “attend college,” as there is no other alternative that competes with the NCAA when it comes to high-level athletics. The only competitors in that sphere are the NAIA and the NCCAA.
The NCAA attempted to argue that more compensation for players would result in less consumer demand for their product, but they did so poorly. Much of their argument was based on opinion and theory rather than study.
The NCAA’s experts argued that “amateurism is a key part of demand for college sports” and that “consumers value amateurism” (19.14–15). The NCAA suggested a large draw to the game is because players are viewed as students along with the love for a college and campus experience.
The love for college sports, at its grassroots, is a love for one’s university competing against others. People attend these universities and thus have a vested interest in the brand, different from professional teams, as most people have no close tie to professional teams.
High school sports utilize that same principle, but college sports draw more fans because of the level of play. Viewers enjoy the passion of the fans and the college experience. The NCAA argued some of that would be lost, but the Court did not side with the Defense.
“This testimony does not establish that the challenged rules have a connection to consumer demand, however, because student-athletes would continue to be students in the absence of the challenged rules. Fellow students, alumni, and neighbors of the schools would continue to identify with them” (44.13–18).
The Court also relied on surveys from the Plaintiffs, which showed that consumer demand has not decreased since 2015, when student-athletes were given greater compensation after the O’Bannon case. The Plaintiffs certainly brought forth a stronger case with their expert testimonies.
Alston’s experts showed that consumer demand has increased since 2015 and that consumer demand would not be negatively affected in the future, as well. A survey of 2,696 people from the Plaintiffs asked questions about a number of scenarios where athletes would receive more compensation. The survey showed that consumer demand would not drop.
“Compensation,” “benefits” and “pay for play” are all buzz phrases when it comes to discussing amateurism and eligibility within the NCAA. Playing in the NCAA now for four years, I still wasn’t aware of what exactly is/isn’t allowed, and that’s not because I didn’t pay attention.
Reading this case opened my eyes even wider to some of the complexities and inconsistencies with amateurism and “pay for play.” Judge Wilken made it clear that the NCAA needs to figure out what “amateurism” means exactly.
“Defendants have not pointed to any NCAA bylaws that define amateurism, pay for play, or pay. In the bylaws, ‘pay’ is defined only indirectly, by way of a list of forms of compensation that the NCAA permits and does not permit. A reading of these bylaws discloses no principled, articulable difference between amateurism and not amateurism, or ‘pay for play’ and not ‘pay for play.’ The only thing that can be inferred is that compensation constitutes ‘pay for play’ or ‘pay’ if the NCAA has decided to forbid it, and compensation is not ‘pay for play’ or ‘pay’ if the NCAA has decided to permit it” (80.3–12).
If a tennis player won $10,000 in prizes, would he/she be eligible? Yes.
If an international student got paid by his/her country for participation in the Olympics, would he/she be eligible? Yes.
The NCAA also allows for other monetary benefits: Players receive gifts for performance, such as making postseason games or tournaments.Those gifts can reach up to $5,600. The College Football Playoff will oftentimes pay for tickets and travel for athletes’ parents.
There is a “Student Assistance Fund” (SAF) that universities can use to disburse money to athletes, and there is no cap on the amount a school can give to an individual athlete. Each university is given a total amount, and then it has to show how much it gave back to athletes.
The court document says, “Neither schools nor conferences report to the NCAA detailed information to show how SAF funds were allocated” (24.13–14). I wish I knew about these SAF funds; I would have put them to good use.
Overall, the NCAA did not do a good job persuading Judge Wilken in favor of their argument. It could not show that consumer demand would drop, and the Judge was very wary about the definition of amateurism, although she did not choose to rule it illegal (a win for the NCAA).
Issue 2: The integration of athletes into the university community
The NCAA doesn’t want student-athletes living luxuriously while other college students live on that “college budget.” On top of its argument that additional compensation would result in less demand and ruin amateurism, the NCAA suggested that athletes’ experience on campus would be different because they would not be integrated well into their environment.
On the surface, the argument seems feasible: The NCAA advocates for the “student experience” of its athletes, and by being paid thousands of dollars, those athletes would potentially stick out from their environment.
But in reality, the Plaintiffs shot that argument down rather easily. The Court agreed with the Plaintiffs. The status quo — a lack of compensation — actually causes student-athletes to be less integrated now because athletics programs spend exorbitant amounts on buildings, dorms and facilities to “wow” recruits.
This same integration concept was argued by the NCAA in O’Bannon. Wilken said it was weak then and is even weaker now, given more evidence since 2015.
“Evidence was presented at this trial (Alston) that did not exist at the time of the O’Bannon trial showing that the challenged rules are not necessary to prevent a wedge between student-athletes and other students … [T]here is no evidence that, since 2015, student-athletes have experienced more separation” (50.28–51.11).
The integration argument is also weak because there is already an economic separation between college students and a separation between athletes and non-athletes. People of all class levels are on a college campus and can still integrate.
Also, athletes naturally — whether the NCAA wants to accept it or not — are already separated from their non-athlete counterparts. Athletes have such different schedules from a non-athlete that sometimes their paths don’t cross or they simply can’t be involved with the same activities as non-athletes.
Athletes, when entering freshman year, have a set friend group: their team. Many athletes, even at a small school such as Mercer (3,500 undergrad), stick mainly to their team. Those teammates become their friends. Non-athletes, on the other hand, are forced freshman year to put themselves out there to find friends.
I can only imagine what the difference would be like at a large school such as Oklahoma for someone like Kyler Murray. Athletes are on a pedestal on college campuses already. Paying an athlete would not cause any more separation, Wilken ruled. She even claimed the current rules create more of a wedge.
“[T]he challenged rules may create or exacerbate a wedge because they result in some schools spending money that would otherwise go to student-athlete compensation on frills, like extravagant, athletes-only facilities” (89.27–90.3).
The options on the table
The Plaintiffs offered three alternatives to the current system. They were as follows:
(1) The NCAA could not place any limits on compensation or benefits, whether or not related to education, given in exchange for athletic services. Individual conferences would set limits on compensation.
(2) The NCAA could continue limiting compensation except for benefits related to education and the 17 benefits incidental to athletics participation the NCAA currently allows and caps.
(3) The NCAA can limit compensation or benefits in exchange for athletic services but can not limit compensation related to education.
Under all of the options, the conferences would still have the right to choose whether to enact these rules. Wilken ultimately sided for the third option.
“[T]he NCAA may continue to limit the grant-in-aid at not less than the cost of attendance, and to limit compensation and benefits that are unrelated to education provided on top of a grant-in-aid. The NCAA may also limit academic or graduation awards or incentives, provided in cash or cash-equivalent, as long as the limit imposed by the NCAA is not less than the athletics participation awards limit. Current NCAA limits on other education-related benefits that can be provided on top of a grant-in-aid are invalidated. The NCAA may not limit these benefits in the future” (102.27–103.8).
This decision seems to go hand-in-hand with the idea of amateurism written in the NCAA’s constitution. It enhances the view of student-athletes as students, which according to the NCAA, is a key element of their consumer demand.
“These benefits are, by definition, related to education and thus would be consistent with the values propounded by the NCAA. The Principle of Amateurism in its constitution, quoted above, holds that amateur student-athletes should be motivated primarily by education. Education-related compensation and benefits would enhance the student-athletes’ connection to academics” (58.22–28).
Is this case a win for the NCAA?
Not only did Wilken not choose to rule in favor of the Plaintiffs’ first option (unlimited compensation), but her written opinion was damaging to any Plaintiffs in the future who want to take the NCAA to court.
“The Court does credit the importance to consumer demand of maintaining a distinction between college sports and professional sports. In addition to the fact that college sports are played by students actually attending the college, student-athletes are not paid the very large salaries that characterize the professional sports leagues that many student-athletes aspire to” (44.19–24).
“[T]hat (first) alternative leaves open the possibility that at least some conferences would allow their schools to offer student-athletes unlimited cash payments that are unrelated to education. Such payments could be akin to those observed in professional sports leagues. Payments of that nature could diminish the popularity of college sports as a product distinct from professional sports” (54.9–15).
With this opinion, it is clear Wilken wants there to be an obvious distinction between the college and professional game. Interestingly enough, Wilken did mention just a few paragraphs later that a “gradual change” may be more effective for the NCAA rather than allowing conferences free reign to bid and give as much as it wants.
She is worried that free reign would lead to some “miscalculations by one or more conferences as to the levels of pay that would not reduce demand for the product, and this could produce unintended consequences” (54.28–55.3).
So while the opinion that there should be a distinction between college and pro was a big win for the NCAA, this additional side note by Wilken lends one to believe — down the road — some type of capped, cash compensation would be something Wilken could support. Her chief concern, certainly, seems to be ensuring that the NCAA’s consumer demand would not suffer as a result of a ruling.
Bogdanovich (the Mercer golfer), although split on whether he supports the idea of paying athletes, said schools giving unlimited compensation would make the system unfair. Schools like Mercer could no longer compete with a school like the University of Georgia.
“You’re going to have even a larger gap than you have already,” Bogdanovich said. “I think it would become a little like pro sports, and I think people like college sports because it changes so rapidly.”
The NCAA’s chief legal officer, Donald Remy, released a statement on the organization’s website highlighting that Wilken ruled in favor of their amateur model.
“The court’s decision recognizes that college sports should be played by student-athletes, not by paid professionals,” Remy wrote. “The decision acknowledges that the popularity of college sports stems in part from the fact that these athletes are indeed students, who must not be paid unlimited cash sums unrelated to education. NCAA rules actively provide a pathway for tens of thousands of student-athletes each year to receive a college education debt-free.”
David Shipley is a professor of law at the University of Georgia. In 2010, he became UGA’s Faculty Representative to the NCAA and the Southeastern Conference. In 2018, he was appointed to the NCAA’s Infractions Appeals Committee.
He said he believed the NCAA, despite deciding to appeal the decision, was content with the ruling.
“From everything I have heard and read, the NCAA is okay with parts of the ruling — recognition that college sports are not the same as professional sports — and it seems like the amateurism model is still relatively intact although not well defined,” Shipley wrote.
What does the future look like?
Remy announced on the NCAA’s website that the organization will be appealing Judge Wilken’s decision.
“Although the court rejected the plaintiffs’ desire for a free market system, we will explore our next steps as appropriate. We believe the ruling is inconsistent with the decision by the 9th Circuit Court of Appeals in O’Bannon,” Remy wrote. “That decision held that the rules governing college athletics would be better developed outside the courtroom, including rules around the education-related support that schools provide.”
It’s impossible to say what will happen in the appeal. Shipley said he didn’t even want to try to predict what the appeals court will rule. If the ruling survives the appeals court, it will simply be one step closer to college athletes being paid.
“Schools will figure out what the ruling permits them to do, and seek guidance, when in doubt, from the NCAA HQ in Indianapolis. In the Power 5 it seems like most schools are looking for a recruiting advantage so I think the real impact will be on the bottom line — costs to institutions of providing the educational related benefits/items not currently being offered,” Shipley wrote. “I predict there will be lots of trying to keep up with your competitors — if UGA offers a prospective student-athlete (X, Y and Z), then Auburn will offer him or her more. We saw that when the cost of attendance stipends were first allowed, and I bet we will see it with these educational benefits/items.”
I know as an athlete that any additional compensation would be intriguing to me. I personally would love for Mercer to buy me a camera so I could take professional photography.
Ultimately, the impact of this ruling comes down to how exactly the NCAA wants to define something as “educational.”
Would it be educational for me to have a Mercedes so I can be culturally knowledgeable about foreign cars? How about a phone that I can use as a search engine? That’s still to be determined.
What we can say for certain is that the debate of paying college athletes will not halt any time soon. As cases continue to jump into the legal system concerning athlete compensation, sports fans’ eyes will be peeled.
The biggest takeaway from Alston v. NCAA is this: The NCAA doesn’t seem to have a firm grasp on amateurism, but the Courts continue to want a clear distinction between college and professional athletes. The door is not fully shut on limited cash compensation, though. I do believe, down the road, it’s possible to see a system where athletes are maybe given, say, $10,000 a year in cash on top of scholarships.
Even in that scenario, though, many questions arise: Does everyone receive $10,000? What about those in non-revenue sports? Starters? Back-ups? How do athletics programs who don’t make money compete (according to Shipley, only about 24 schools in the country actually make money)?
College athletes are still split on the idea. Many I talk to simply don’t have a strong opinion. They recognize both the benefits and potential consequences.
That doesn’t mean, financially, being a college athlete is exactly easy. Take it from Bogdanovich, who was fortunate to come from an affluent family who could pay his way through college. But he also sees the other side: those who come from economically-disadvantaged families.
“If I would have had to have provided a means of money for myself, that would have been extremely difficult,” Bogdanovich said. “I don’t know if I would have been able to do it. I may have had to change my major or just accept lower grades and probably higher (golf) scores.
“I’m a biochemistry and molecular biology major, and I’m a full-time athlete. Twenty hours … you know it’s not 20 hours. It’s more — if you want to be competitive. For me to have survived my first three years, I literally did not have any time to allot except for schooling (and golf),” Bogdanovich said.
The middle ground, I expect, may be this: Student-athletes may never be paid a salary for playing, but Courts could rule that signing autographs, marketing deals and other forms of pay for being a “brand” could be legal for college athletes.
Under the amateur definition the NCAA wants to use — not “pay for play” — those forms of compensation would not really be “pay for play.” No one is paying the athlete to play; they are simply paying for their brand and likeness.
Shipley said it will probably be a long time, if ever, before student-athletes are paid.
“People forget that there are over 1200 schools in the NCAA — three divisions — and assuming 500 (student-athletes) per school — that’s 600,000 (student-athletes) nationally. Maybe some of the stars on Georgia’s football team could negotiate for a nice salary and make some money from their names, images and likenesses — but what about the walk-ons, the scout team guys, the women on the Equestrian team, and second string soccer players? Can Mercer afford to pay some of the school’s best players? How about Wofford over in Spartanburg(,) SC. What about team dynamics in all of this? By the way, (Division) III schools — and there are lots of them — can’t give athletic scholarships,” Shipley wrote.
“Perhaps the answer is a new division — a new NCAA — for the roughly 100 programs nationally which are competing at the highest level — the 65 schools in the autonomy conferences and another 35,” Shipley wrote.
