Litigation involving the National Football League (NFL) and National Collegiate Athletic Association (NCAA) is not a new phenomenon in 2016. Nevertheless, two cases — Brady v. NFL and O’Bannon v. NCAA — have been widely discussed, but what sort of impact will they have on their respective industries going forward?
For our latest #SLBrief, we asked Jaime Miettinen (@SportsLawBlonde) about those cases, in addition to relevant tidbits for aspiring sports law attorneys.
As a matter of introduction, Jaime is a Michigan-based attorney, who runs her own law firm and sports law website. In regards to the latter, after passing the Georgia Bar Exam upon law school graduation, she started her website in August 2014 after talking with her roommate in their downtown New Orleans apartment.
“It was a great way to pass the time as I was trying to figure out what to do with my career,” Jaime told the MULS Sports Law Society Blog. For personal reasons, Jaime ended up moving back to Michigan, where she grew up and attended the University of Michigan for her undergraduate degree.
“[The website] helped me get exposure to other areas of sports law that I had not had a chance to really explore,” Jaime said. “With social media, it is so easy to network —everybody in the [sports law] community is so gracious and helpful. I made so many great connections through my website’s Twitter account, believe it or not.”
More broadly, she offered a piece of advice for those who want to work in the sports law industry: “Be confident and network.” For Jaime, she networked with Michigan professional sports teams and their in-house counsel, and she was not afraid to be direct with them. As such, she diligently asked for their opinions on running her own sports law website and law firm.
“Any sort of exposure, whether it is spur of the moment or planned out,” Jaime advised to take advantage of those opportunities, like she did, for example, when she went to the Palace of Auburn Hills for a sports law symposium after an attorney that she clerked for recommended it.
As you are well aware (at least I would hope so), NFL Commissioner Roger Goodell suspended New England Patriots quarterback Tom Brady for the first four games of the 2015-16 season for deflating footballs that were used against the Indianapolis Colts in the ’15 AFC Championship Game. (The Patriots defeated the Colts, 45-7). A federal district court later overturned that suspension.
On April 25, 2016, the Second Circuit of the U.S. Court of Appeals overruled the district court and held that Goodell “properly exercised his broad discretion under the collective bargaining agreement and … did not deprive Brady of fundamental fairness.”
As such, Jaime was surprised by the Second Circuit’s ruling because she “interpreted Article 46 (‘Commissioner Discipline’) a little differently, more along the lines of the Second Circuit’s dissent opinion (provided by Judge Katzman).”
It is ironic that a process designed to ensure fairness to all players has been unfairly used against one player.
*More of Judge Katzman’s dissent can be found in the above link.
Prior to Brady filing an appeal for a rehearing in front of the Second Circuit, Jaime told me that it will be an uphill legal battle for Brady. Nevertheless, he “has retained some of the best legal counsel on his side, and they have very strong records with the Second Circuit and U.S. Supreme Court. With that said, they know exactly what they need to do.”
Altogether, Jaimie importantly pointed out that the Second Circuit’s decision is beyond #Deflategate and Tom Brady. “It has so many future implications for everyone in the (NFL) Players Association, and I think it is really important for Brady to take a stand and hopefully, maybe, but probably not, wear down Goodell.”
While at the University of Michigan, Jaime majored in economics. Thus, she holds a solid understanding of how the law and economics intersect. Specifically, in terms of paying NCAA student-athletes above the cost of attendance, which was a seminal issue that O’Bannon dissected, Jaime told me that it is inevitable and, in fact, needs to happen.
“If you look at the economics side and the supply and demand – a basic economic graph – we are nowhere near an equilibrium, where the supply meets the demand,” Jaime said. “You have to think about it in terms of the demand being the schools. The schools are the ones making this unnatural market and collectively, as a cartel, agreeing that they want to put a cap on grant-in-aid and nothing more.”
As a result, there is excess demand, which results in the market being below the equilibrium quite significantly. “If you draw a line across the graph, where output is on the X axis and price is on Y axis, we see that the demand is above the supply.”
Here, demand is the product put forth by NCAA student-athletes, and the supply is the NCAA student-athletes themselves. As a whole, the industry is nowhere near supply meeting demand.
“That’s what a lot of people fear – [the market] will go above the equilibrium if student-athletes receive more than grant-in-aid and that it will get out of control, per se,” Jaime said. “But I don’t think the free market would work that way.”
Tying that into the legal aspects of paying NCAA student-athletes, even though it is a labor market, as Jaime pointed out, that market functionally does not exist because they are not able to unionize.
“And they shouldn’t unionize because there would be way too many issues – for example, public and private schools,” as made known by the National Labor Relations Board (NLRB) case involving Northwestern football players.
Thus, instead of arguing that the NCAA and its member schools are violating labor laws, the most successful claim is arguing that the NCAA and its member schools are violating federal antitrust law, which O’Bannon focused on.
“For the student-athletes, the fact that excess demand is blatantly evident shows that it is an unreasonable restriction on trade, in terms of antitrust law and §1 of the Sherman Act,” Jaime said.
Any agreement to restrict trade is illegal. Within the Rule of Reason, the necessary framework for dissecting §1 claims, the plaintiff must prove that the restraint has anticompetitive justifications.
In turn, the defendant then must prove that the restraint has pro-competitive justifications.
Subsequently, the plaintiff must then prove there are less restrictive alternatives to further the restraint’s justifications or objectives.
In terms of those less restrictive alternatives, “that’s exactly what the supply-and-demand graph shows. There are less restrictive alternatives available [in the college athletics market] because we can get closer to the equilibrium,” Jaime noted. “It doesn’t have to be the best alternatives; it just has to be a little less restrictive.”
Above all, what are some options for a less restrictive alternative? For starters, O’Bannon held that allowing NCAA member schools to pay their student-athletes the full cost of attendance sufficed as a less restrictive alternative.
However, the court disagreed with the district court in that paying the student-athletes in the form of $5,000 stipend retrievable upon graduation was not a less restrictive alternative.
The difference between offering student-athletes education-related compensation and offering them cash sums untethered to educational expenses is not minor; it is a quantum leap.
At that point the NCAA will have surrendered its amateurism principles entirely and transitioned from its “particular brand of football” to minor league status.
–O’Bannon v. NCAA, 802 F.3d 1049 (9th Cir. 2015) (quoting NCAA v. Board of Regents, 468 U.S. 85 (1984))
While Jaime acknowledged this, she articulated her own proposal for a less restrictive alternative: NCAA member schools come together within their specific conference to determine the value of the student-athletes.
“It might be a few thousand dollars above grant-in-aid, it might be $10,000 above grant-in-aid. But you would have a little bit more of a free market in that sense because different conferences would be able to think about what they can afford and how they value these student-athletes.”
As a result, an equal playing field would exist among individual conference members. For example, in the Big Ten conference, “Northwestern would be paying the same as Ohio State. And student-athletes would still have that choice — if they value an engineering education, they could play football and earn more money at Northwestern,” Jaime noted.
“But if they want to play professional football and think that their best shot to achieve that is playing at Ohio State, then they could still do that and not sacrifice any of the money.”
In sum, it is advantageous to look at these less restrictive alternatives on a spectrum, whereby the O’Bannon proposal is on one end of the spectrum and a completely free market (the student-athletes earning an unlimited amount of pay) on the other. Jaime aimed to identify a proposal somewhere in between.
Additionally, in order to achieve more of a free market, Jaime suggested another possible alternative: Apparel sponsors could draft a contractual provision that allows the student-athletes to receive a cut of the apparel deal that NCAA member schools receive.
“Quite frankly, if you want to go all-out free market where it would turn more into professionalism than amateurism, let [the student-athletes] get endorsements,” Jaime said. “Some people are so gun-ho about fighting the battle, and that’s beautiful. But it needs to be [voiced] by the student-athletes first.
“This old school version of amateurism, this archaic definition, needs to go. There is a way that they can still be student-athletes without the archaic amateurism tag attached.”
In closing, we sincerely thank Jaime for taking the time to dissect the intersection of law and economics relating to paying NCAA student-athletes, the power of networking within the sports law industry, and the #Deflategate saga. We wish Jaime nothing but the best in her future endeavors, and hope to talk to her soon.
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