By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.
Both the Biden administration and Congress are separately taking on the National Collegiate Athletic Organization (NCAA)’s control over collegiate sports and the compensation student athletes can receive. According to the the WSJ :
The Justice Department urged the Supreme Court to side with college athletes who are challenging the NCAA’s limits on their compensation, adding the government’s voice to a high-stakes case scheduled for arguments later this month.
In filing its written brief Wednesday, the Biden administration officially aligned the department with a broad roster of skeptics of the National Collegiate Athletic Association’s efforts to maintain tight control over the amateur model of college sports. The Justice Department’s antitrust division during the Trump administration had also voiced skepticism of the NCAA’s approach.
The department’s new brief argued that the NCAA’s interests in amateurism didn’t exclude its rules from the same kind of antitrust scrutiny that applies to other organizations.
The department said college sports were “an unusual product” in which athletes’ amateur status has been at least part of the appeal to consumers. While the NCAA can place some limits on athletes’ compensation that wouldn’t be acceptable among other organizations, the department said, the evidence showed that some of the association’s restrictions “did not actually foster consumer demand.”
Lawyers from the Federal Trade Commission, which shares U.S. antitrust authority with the department, also signed the brief
I wrote for the first and last time about the issue of college athletes seeking to profit monetarily from their talents in November 2019 (see NCAA Votes to Allow College Athletes to Benefit from the Use of Their Names, Images, and Likenesses).
The basic problem with big time college sports, – at least for the two main money-generating sports of basketball and (American) football: the system is awash in money. And many of those involved – colleges, coaches, athletic departments, television networks – get their cuts.
All that is, but the athletes, who risk injury by participating in college sports, not to mention, devote considerable time to so doing, often to the detriment of their studies,
In that earlier post, I discussed the action taken by the NCAA in response to legislation passed by the state of California. Although at that time, the NCAA seemed to have capitulated and voted to to develop its own rules to allow college athletes to benefit from sale of their names, images, or likenesses (NIL).
Yet as I discussed at length in that earlier post, it was far from clear what the NCAA rules would look like, or even when they might emerge. Furthermore, amyriad state and federal approaches were also on the table – with no clear timetable, or means of sorting out which approach would take precedence – and that was months before COVID-19 arrived. disrupting. the college sports world along with so much else besides.
What’s the situation today? Well, the NCAA still has issued no new rules, although it has promised action in time for the 2021-2022 academic year. No federal legislation has passed either – although multiple bills are pending. As mentioned, California has adopted an NIL statute, Florida has one due to go into effect in July, and more than a dozen other states have also enacted similar provisions, according to the WSJ.
Federal State of Play
In DOJ SEEKS TO JOIN SUPREME COURT ARGUMENT AGAINST NCAA IN ALSTON CASE, Sportico fleshed out the background to the upcoming Supreme Court oral argument in the Alston case:
The Alston case is portrayed as a sports dispute but is fundamentally a controversy over interpretation of federal antitrust law. Last year the U.S. Court of Appeals for the Ninth Circuit held that the NCAA and its members illegally conspire when capping grants-in-aid to tuition, fees, room, board, books and other expenses up to the value of the full cost of attendance. At the same time, the Ninth Circuit limited its finding of illegal activity to a narrow band of activities, namely when schools, through the NCAA, elect to disallow individual universities the opportunity to reimburse student-athletes for expenses related to education (such as costs for computers and study abroad).
Yet in regard to more noteworthy NCAA restrictions on universities compensating student-athletes for athletics—including the headline-grabbing possibility of colleges paying athletes athletic scholarships that reflect their market value and revenue generation—the Ninth Circuit found no illegal activity by the NCAA. The NCAA is nonetheless worried the Alston ruling will open the door to other antitrust lawsuits over amateurism. Unless reversed by the Supreme Court, Alston will be precedent for future challenges against NCAA restrictions.
In its amicus brief, the Justice Department asserts that the NCAA and its members ought not to receive preferential treatment under antitrust law. This is an area of law that requires competing businesses (such as colleges that vie for students, faculty, staff, grants, media attention, among many other pursuits) to only conspire in ways compatible with the basic tenets of competitive markets. The brief acknowledges that “schools must agree on at least some aspects of the competition” in order to make college sports work. The brief also points out that the NCAA and member schools have long portrayed the amateur status of athletes as “essential” to organizing and marketing college sports.
Now, the DoJ isn’t the only third party to file an amicus brief. But the Sportico piece highlights two reasons why the Supremes might accord its brief extra weight, treating it as a primus inter pares, compared to the 22 other amicus briefs filed to date and presently listed on the Supreme Court’s website.
First, the justices will likely accord added weight to the views of the Justice Department than they would, with all due respect, law professors, attorneys, economists, players’ associations, athletes and other interested parties. The Justice Department is not a mere commentator or observer. It is charged with enforcing federal antitrust law in the United States. The Department’s views on a federal antitrust dispute are thus especially meaningful. The agency also has an ongoing stake in college sports litigation. In January, the Justice Department signaled concernsto the NCAA over potential name, image and likeness guardrails. It will likely continue to weigh in on amateurism, especially should any of the federal NIL bills advance in Congress and land on the desk of President Joe Biden.
Additionally, the DoJ seeks to take a significant step beyond merely fillng an amicus brief. Again, as per Sportico:
Second, the Justice Department wants to participate in the oral argument. It wishes to do for purposes of a “divided argument.” This occurs when the Solicitor General—the federal officer who represents the country before the Supreme Court—determines that the interest of the country would be better served by having a direct voice in the oral argument than to rely on the parties’ attorneys (here, attorneys for the NCAA and Alston). The Solicitor General can draw on department expertise and historical understandings.
The Sportico account speculates that there’s a good chance that the Supremes will grant the DoJ’s motion. Why? Well, as per Sportico:
According to a 2008 Georgetown Law Journal articleauthored by Harvard Law School professor Richard Lazarus, the Court “routinely grants motions for divided argument filed by the Solicitor General as amicus curiae, even in cases in which the federal interest hardly seems central to the case, traditionally because of the reputation of the Solicitor General’s Office for outstanding advocacy.”
Pending Federal NIL Legislation
Moving away from this discussion of matters judicial and executive, several pieces of NIL legislation are pending before Congress. In the interest of keeping this post to a manageable length, I won’t attempt to parse all of them in this post, especially as Sportico published a comprehensive summary at the end of February, MORAN BILL JOINS CROWDED WORLD OF CONGRESSIONAL NIL PROPOSALS Additionally, it’s far too early to pick which of the many options being considered will win out, so I won’t even try.
So, over to Sportico:
As the college sports industry awaits clarity on when and how college athletes will monetize their name, image and likeness, another new NIL bill has emerged in Congress. Whether it accelerates reform or further muddies the waters remains to be seen.
Sen. Jerry Moran (R-Kan.) this week introduced the Amateur Athletes Protection and Compensation Act (S.414). The Act is similar to other NIL bills—including Senate legislationfrom Roger Wicker (R-Miss.) and a House bill from Reps. Anthony Gonzalez (R-Ohio) and Emanuel Cleaver (D-Mo.)—in that it would create an NIL right for college athletes who, in turn, could hire agents, sign endorsement deals and sponsor camps.
Congress might very well pass one of these bills, with bipartisan support. Conservatives favor allowing college athletes to enter freely into contracts to exploit their names, images, or likenesses for compensation Whereas liberals favor similar provisions, but emdprse a civil rights rationale. On that latter point, as an ESPN article from early February recognizes:
A new federal bill introduced Thursday would make it illegal for the NCAA or other college sports associations to place any restrictions on the type or size of endorsements deals that college athletes could sign in the future.
The bill, co-authored by Sen. Chris Murphy (D-Connecticut) and Rep. Lori Trahan (D-Massachusetts), is the latest in a series of proposed national laws that aim to help college athletes make money and reform a multi-billion-dollar college sports industry that several members of Congress believe is fundamentally unfair. This proposal is the only option to date that doesn’t provide any means for Congress, the NCAA or any other governing body to regulate what products athletes can endorse.
“Big-time college athletics look no different than professional leagues, and it’s time for us to stop denying the right of college athletes to make money off their talents,” said Murphy, who said he sees the NCAA’s current rules as a civil rights issue. “If predominantly white coaches and NCAA executives can have unfettered endorsement deals, why shouldn’t predominantly black athletes be afforded the same opportunity?”
The new bill also specifically prohibits the NCAA or conferences from doing anything that would prevent athletes from organizing under collective representation to sell their licensing rights as a group. This type of group licensing is typically needed to bargain for media rights, jersey sales and items like video games, such as the college football video game that EA Sports announced its plan to revive earlier this week.
And the ESPN piece adds:
The NCAA has so far been opposed to the possibility that athletes could organize for any type of group licensing activity.
Jerri-Lynn here. That’s no doubt true. Because if college athletes start organising to promote group licensing ventures, who knows just where their activity will stop?
The ESPN piece also goes into some detail discussing the merits of various legislative alternatives, so is worth reading n full.
Yet as Sportico makes clear, this plethora of legislative choices may actually help the NCAA maintain the status quo and keep existing restrictions in place for the time being. With so many options to choose from, reformers may find it difficult to settle on exactly which provisions to enact:
“We’re closer to the end,” longtime college athlete advocate Sonny Vaccaro told Sportico in a phone interview. “But the problem is we now have many good ideas from well-meaning people, and that clutter works to the NCAA’s advantage.”
Vaccaro stresses that too many options—even good ones—can impede efforts to translate consensus for change into actual action.
“We saw this,” the 81-year-old former marketing executive recalls, “with the fight over whether college athletes should unionize and how that would work. The public can’t handle multiple choices. They want yes or no. The NCAA only has one defense and its simple: delay, delay, delay. We need [reformers] to come together and not try to split the baby.”