“In order to preserve the character and quality of the “product,” athletes must not be paid, must be required to attend class, and the like.”

In 1984, the Supreme Court scrutinized the actions of the NCAA in the television market, declaring that the NCAA’s “monopsomy” on broadcasting rights was a violation of the Sherman Antitrust Act. In the opinion, however, the Court repeatedly addressed the historic role the NCAA plays in preserving a “revered tradition of amateurism in college sports” with quotes like the one above. Such notion of amateurism is currently under attack by groups of athletes claiming that a market for the payment of athletes in college athletics exists, and that the NCAA violates the Sherman Antitrust Act by suppressing such market.

But while the unveiling of a market for the payment of college athletes may show a demand for the athlete’s services, it does not change the NCAA’s legal position in antitrust actions: Preserving the character and quality of college athletics rests on preventing the payment of athletes.

G-League Contracts to Pay 18 year-olds $125K per season

On October 18, the G-League issued a statement, first reported by ESPN, declaring intentions to offer an alternative professional route to the NBA outside of the NCAA’s “one-and-done” scheme.

 

The G-League, effectively the minor league for the NBA, will now compete with college programs in the NCAA for elite talent. Aside from the six-figure salary, the G-League also provides athletes with the opportunity to engage in negotiations for endorsement deals with apparel companies. Such endorsement deals are expressly prohibited by athletes playing for a university in the NCAA. This new development serves as concrete evidence of a market that exists for paying athletes for their performance at an extremely young age, a market which many point to as being revealed in the current federal investigation into college basketball.

Federal Trial Reveals Payments Made to Recruit High School Players to NCAA Universities

In late September of 2017, the FBI levied charges against executives of a major shoe company, four NCAA men’s basketball coaches, and several “advisors” involved in a bribery scheme orchestrated to pay athletes and their families, while delivering said athletes to certain programs working in conjunction with the shoe companies. These findings revealed what many have called an “underground market” for the payment of performance on the basketball court in colleges around the country.

In October of 2018, the charges levied against these advisors went to trial, where more evidence of this underground market came to light, including the statement below concerning the offer of payments to a recruit to attend a major university, Oklahoma State University.

Many scholars and journalists have recognized that the underground market unveils the corruption of college sports, and that such corruption cannot be avoided because the market for paying athletes is so demanding. The G League contracts will now provide an interesting comparison that could be relevant in antitrust cases against the NCAA.

The FBI Investigation and G League Contracts Change Little for NCAA

The NCAA’s founding constitution, and the Supreme Court’s view of the NCAA’s purpose, rests on an assumption that preserving college sports must be accompanied by preserving amateurism. Judge Wilken of the Northern District of California recently heard arguments in the most recent antitrust case levied against the NCAA, In re NCAA Grant-in-Aid Litigation. In this litigation, the plaintiff former-athletes allege that the NCAA violates antitrust law by prohibiting universities from awarding more than tuition and cost of attendance in exchange for on-field performance.

To survive the challenge, the NCAA must show a justification for price-fixing in the market. Many argue that the FBI Investigation and the newly implemented G League contracts may force the NCAA to make adjustments to their policies. However, in the seminal O’Bannon case in 2014, the Ninth Circuit held that preserving amateurism was an adequate justification for price-fixing scholarships. Thus, it is likely that the NCAA can rely on the same argument in its current litigation as it did in O’Bannon, and as it did in Board of Regents back in 1984.

At the end of the day, enacting policies to suppress a market that the NCAA was initially founded to suppress is unlikely to violate antitrust law barring a deviation from courts previous views of the role the NCAA plays.

– Grant Newton

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