...although the Court does not weigh in on the ultimate legality of the NCAA’s remaining compensation rules,the Court’s decision establishes how any such rules should be analyzed going forward. After today’s decision, the NCAA’s remaining compensation rules should receive ordinary “rule of reason” scrutiny under the antitrust laws. The Court makes clear that the decades-old “stray comments”about college sports and amateurism made in National Collegiate Athletic Assn. v. Board of Regents of Univ. of Okla.,468 U. S. 85 (1984), were dicta and have no bearing on whether the NCAA’s current compensation rules are lawful. Ante, at 21. And the Court stresses that the NCAA is not otherwise entitled to an exemption from the antitrust laws. Ante, at 23–24; see also Radovich v. National Football League, 352 U. S. 445, 449–452 (1957). As a result, absent legislation or a negotiated agreement between the NCAA and the student athletes, the NCAA’s remaining compensation rules should be subject to ordinary rule of reason scrutiny. See ante, at 18–19.
...there are serious questions whether the NCAA’s remaining compensation rules can pass muster under ordinary rule of reason scrutiny. Under the rule of reason, the NCAA must supply a legally valid pro competitive justification for its remaining compensation rules. As I see it, however, the NCAA may lack such a justification.
The NCAA acknowledges that it controls the market for college athletes. The NCAA concedes that its compensation rules set the price of student athlete labor at a below-market rate. And the NCAA recognizes that student athletes currently have no meaningful ability to negotiate with the NCAA over the compensation rules.
The NCAA nonetheless asserts that its compensation rules are pro competitive because those rules help define the product of college sports. Specifically, the NCAA says that colleges may decline to pay student athletes because the defining feature of college sports, according to the NCAA, is that the student athletes are not paid.
In my view, that argument is circular and unpersuasive.The NCAA couches its arguments for not paying student athletes in innocuous labels. But the labels cannot disguise the reality: The NCAA’s business model would be flatly illegal in almost any other industry in America. All of the restaurants in a region cannot come together to cut cooks’wages on the theory that “customers prefer” to eat food from low-paid cooks. Law firms cannot conspire to cabin lawyers’salaries in the name of providing legal services out of a “love of the law.” Hospitals cannot agree to cap nurses’ income in order to create a “purer” form of helping the sick. News organizations cannot join forces to curtail pay to reporters to preserve a “tradition” of public-minded journalism.Movie studios cannot collude to slash benefits to camera crews to kindle a “spirit of amateurism” in Hollywood.
Price-fixing labor is price-fixing labor. And price-fixing labor is ordinarily a textbook antitrust problem because it extinguishes the free market in which individuals can otherwise obtain fair compensation for their work.
Businesses like the NCAA cannot avoid the consequences of price-fixing labor by incorporating price-fixed labor into the definition of the product. Or to put it in more doctrinal terms, a monopsony cannot launder its price-fixing of labor by calling it product definition.
The bottom line is that the NCAA and its member colleges are suppressing the pay of student athletes who collectively generate billions of dollars in revenues for colleges every year. Those enormous sums of money flow to seemingly everyone except the student athletes. College presidents, athletic directors, coaches, conference commissioners, and NCAA executives take in six- and seven-figure salaries. Colleges build lavish new facilities. But the student athletes who generate the revenues, many of whom are African American and from lower-income backgrounds,end up with little or nothing. See Brief for African American Antitrust Lawyers as Amici Curiae 13–17.
Everyone agrees that the NCAA can require student athletes to be enrolled students in good standing. But theNCAA’s business model of using unpaid student athletes togenerate billions of dollars in revenue for the colleges raisesserious questions under the antitrust laws. In particular,it is highly questionable whether the NCAA and its membercolleges can justify not paying student athletes a fair shareof the revenues on the circular theory that the definingcharacteristic of college sports is that the colleges do not paystudent athletes. And if that asserted justification is unavailing, it is not clear how the NCAA can legally defend its remaining compensation rules.
