- The Supreme Court’s unanimous ruling on the NCAA’s benefits limit for athletes is a big deal.
- It weakens the NCAA’s grip on college sports and could allow for fair compensation for athletes.
- The decision also sends a signal that the court may be open to more antitrust actions.
- This is an opinion column. The thoughts expressed are those of the author.
- See more stories on Insider’s business page.
In a remarkable decision delivered on June 21, the Supreme Court ruled that restrictions on education-related benefits offered to college athletes by universities violated antitrust law — in essence dealing a huge blow to the model that has dominated college sports for over a century.
While the ruling applies only to a narrow subset of benefits, it signals that time may be running out for some of the worst parts of the NCAA’s grip on college sports.
But beyond the implications for college athletics, the decision has huge implications for the US economy and America’s corporate giants. The unanimity of the decision by the conservative-majority bench, a majority opinion written by the libertarian-leaning Justice Neil Gorsuch, and a concurring opinion by Justice Brett Kavanaugh that practically begs for a chance to rule even more expansively point to newfound enthusiasm for enforcing antitrust regulation in the US.
Equity 1st, tradition 2nd
Before we address the business angle to the decision, let’s look at the sports angle. The NCAA has long argued that the traditional atmosphere of college athletics would be destroyed if players were paid market compensation. Players aren’t allowed to get paid for anything related to their sports performance during school, and the benefits colleges were allowed to extend to these players was limited by NCAA rules.
The logic of the NCAA is that this protects student athletes and sports more generally from the commercial pressures of professional sports and that their material needs are met during their time on campus.
The Supreme Court found these arguments unpersuasive, joining a long line of commentators including sports media and animated satire. My personal experience sides with the court.
I was a four-year walk-on on the Duke Blue Devils’ Division I football team. I am lucky to come from a background that meant I didn’t have to worry too much about the costs of attending college, but for many of my teammates, even a full-ride scholarship and Pell Grants left big holes that were hard to fill.
Monday’s ruling dealt with the ability of schools to offer financial aid to athletes beyond a strict cap set by the NCAA. So while the court’s ruling won’t allow for players to make money off their athletic performance, schools can at least provide more support beyond tuition and room and board.
But there is also reason to believe that the court does not look fondly on the NCAA’s control on these students’ broader ability to make money. During my time at Duke, I saw that traveling home to see family — let alone helping provide for them — was a nonstarter for teammates that came from lower-income backgrounds. More mundane expenses were also a challenge. Many of those teammates were Black, as noted more generally in the concurrence authored by Kavanaugh: “The student athletes who generate the revenues, many of whom are African American and from lower-income backgrounds, end up with little or nothing.”
Given the revenues the NCAA rakes in, and the massive salaries paid to administrators across college athletics, applying antitrust regulation to the governing body that prevents athletes from earning income based on their likeness or athletic abilities is an obvious application of basic fairness.
The long tradition of American anti-monopoly
Dating back as far as the American Revolution, debates over the ability of businesses to gain control over markets have been a feature of this country’s ideological battlegrounds.
By the late 19th century, Ohio Republican Sen. John Sherman’s anti-monopoly bill (focused on trusts, the legal entities that were then used to concentrate market power) passed the Senate 51-1. It was expanded over time, with Alabama Democratic Rep. Henry Clayton Jr.’s expansion passing the House by huge margins in 1914 the most notable addition. For decades, the Sherman Act and Clayton Act were used to prevent companies from conspiring or growing to a scale that would lead to them acting anticompetitively.
Despite the long history of anti-monopoly politics in this country, more recently there has been much less enthusiasm for preventing companies from acting together to shut out competition.
With the brief exception of the late 1990s, administrations of both parties have steadily cut back Department of Justice investigations into potential antitrust violations as part of a broader pro-corporate consensus some refer to as “neoliberalism” that has also curtailed the power of unions.
Some of the slack from DOJ has been picked up by the Federal Trade Commission, but enforcement actions by the agency can’t make up for the massive drop in Justice Department attention.
Politics and jurisprudence return to antitrust
But more recently, political consensus may be turning away from the low point for anti-concentration policy. Policymakers in both parties are concerned about the amount of power wielded by tech behemoths, while newly minted Federal Trade Commission Chair Lina Khan rose to prominence after an article she wrote as a law student “reframed decades of monopoly law,” as The New York Times wrote.
Efforts to curtail the market power of companies like Facebook, Amazon, and Google are nascent but starting to build momentum. The Supreme Court’s decision in the NCAA case gave a signal that it may be open to more aggressive antitrust regulations and actions.
In the majority opinion on the NCAA decision, Kavanaugh practically begged plaintiffs to come forward with even broader appeals for protection from the NCAA’s monopoly power: “I add this concurring opinion to underscore that the NCAA’s remaining compensation rules also raise serious questions under the antitrust laws.”
Kavanaugh is relatively conservative within the court’s bench, and a direct expansion upon the decision is typically viewed as a signal for what the court may do with future cases. Further, Gorsuch, the majority-opinion author (who taught antitrust law at the University of Colorado), does not have a clean history of siding with victims of monopolies as he did in the NCAA case.
While the NCAA is a somewhat special case, the extremely warm reception plaintiffs got in the Supreme Court suggests that it is shifting with national politics and the environment for monopolies or potential monopolies is about to get much less comfortable. Bolstering the equity and agency of college athletes is a welcome benefit to this broader trend against the concentrated power of business.