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The Existential Threat To College Athletics: Antitrust Lawsuits

We enter heady, complicated territory, but antitrust law is the greatest single threat to college athletics in the modern era.

NCAA President Steve Emmert must navigate dangerous waters.
NCAA President Steve Emmert must navigate dangerous waters.
Kevin Jairaj-USA TODAY Sports

Recently, various ex-collegians have made a variety of demands for compensation, through a variety of court challenges.

Their efforts have met with mixed success.

For instance, the plaintiffs in the Ed O'Bannon case sought damages against the NCAA, EA Sports and others for the uncompensated use of their likenesses used in a variety of profit-making ventures, most notable video games. While couched in terms of likeness rights, the case was absolutely one involving antitrust laws. And, just over a year ago, the trial court made a specific finding that the NCAA et al were a "cartel" which unfairly restrained interstate commerce, specifically as concerned television revenues and licensing rights.

Ignoring the overbroad reach of the court in making a finding that college athletes were entitled to a portion of the revenues from television contracts, I don't think it's a stretch to say that most agree players' likenesses absolutely were being profited upon in everything from jersey sales to video games. Equity demands that these players receive compensation from those efforts.

If O'Bannon represents the ceiling for student-athletes, then the recent NLRB decision involving Northwestern students' attempts to unionize, represents the floor.

In that case, the CAFA (Northwestern's putative union) won big at the local labor panel, a decision I roundly and tediously criticized at the time. That finding was not upheld with the national NLRB panel. The reason was simple: forty years of precedent had never applied the strictures of unionization to students, who are plainly not employees in the sense of the word. There are student workers, those who perform compensated or in-kind services for the university, and a myriad of other arrangements, but the traditional "master-servant" relationship does not, nor has ever, applied.

The appellate proceeding in essence agreed, declining to apply jurisdiction (here, "applying jurisdiction" would have permitted unionization, and all of the collective bargaining rights inherent in unionization.) In fact, the NLRB notes that students have always been held apart, and that the educational setting is a thing apart from traditional commerce. Moreover, the NLRB felt that permit unionization would 1. create a market that did not previously exist, which would thereby 2. introduce uncertainty into the now-existent market and into the stream of commerce overall. In short: it's social engineering at play and nothing that actually has a bearing upon traditional commerce, nor the employer-employee relationship.

The net result of failing to apply federal protections is that only hypothetically could a union be formed, but that would be left to a conference-by-conference determination applying state law. And, in the Big Ten alone, state law makes that simply impossible: Michigan, Indiana and Wisconsin have absolutely gutted union protections (or even the right to form unions) at the state level as they pertain to state employees. That means that even if these players were even hypothetically considered employees, which the NLRB did not sanction, that the flagship landgrants of Michigan State, Michigan, Indiana, Purdue, Wisconsin couldn't even hold a vote on whether to unionize.

Now, we come to the greatest threat: the full-frontal challenge of whether the NCAA is a cartel comprised of hundreds of individual businesses, all of them colluding to restrain commerce, and whether or not players are entitled to direct, monetary compensation for performance.

Legal showdown looms over the NCAA's ban on paying athletes | College Football

ATLANTA (AP) — Fresh off a ruling that Northwestern University football players can't form a union, the NCAA is about to face a more direct challenge to its longstanding policy of not letting schools pay athletes like they're professionals.

A federal judge who issued a landmark decision against the NCAA last year is considering whether to grant class-action status to lawsuits by current and former college athletes seeking to abolish the NCAA's prohibition against competitively paying players. Taken together, the cases carry billion-dollar implications and hinge, essentially, on whether the concepts of amateur athleticism and economic competition can co-exist.

As the case progresses, we will delve more into commerce, antitrust law, exemptions (such as those enjoyed in professional sports,) and other tactics -- such as settling with the plaintiffs before a class ruling can be made, etc. For now, it is safe to say that, of the many attempts to be paid as employees, this is the one that could truly spell the end of modern college athletics as we know it.

A list of those challenges is briefly set forth here:

A history of challenges to NCAA's ban on paying athletes | College Football

The NCAA's amateur athleticism model, which has withstood various challenges over the years, is being directly challenged in lawsuits that have the potential to remake the college sports landscape. Here's a brief history of some of the major cases that have led to this point.

And, while Ryan Nanni (contributor at EDSBS) is somewhat tongue-in-cheek in this Verge article, he's not too far off on some predictions: namely that unfettered commercial application of antitrust law to non-profit educational institutions would absolutely obliterate the number of schools that could, or would, field programs.

The next 35 years of college football, predicted | The Verge

PHASE ONE (2018-2019) It begins with the NCAA losing a court case. Take your pick: uncompensated use of player likenesses, the ability for student-athletes to unionize, or the antitrust claim arguing scholarship amateurism is an unlawful restraint of trade. One case will end in a very bad ruling for the NCAA and dramatically reshuffle the power relationships in college football, especially where the distribution of money's concerned.

Grab your britches; the next few months will be the most perilous that college athletics have ever faced.


ED: I received this tweet (among others) from persons in response to the story. I have not vetted this information yet, but I am passing it along.