Star college athletes have long been exploited for their talent, image and likeness, at least that is the notion advocated by some. They are proponents for “pay for play,” a type of fair compensation that should be awarded to student-athletes for their contributions to a multi-billion-dollar annual market. Others, however, argue that the value of the scholarship and cost of attendance as a whole is more than enough. Plus, the student athletes, after all, are able to earn a college degree, an entity that you cannot necessarily put a value on.

At the 2016 National Sports Law Institute Conference, “The Changing Landscape of Collegiate Athletics: Legal and Business Issues,” the panel consisting of University of Michigan Co-Director of the Michigan Center for Sport Management and Professor Rodney Fort, City University of New York Law Professor Marc Edelman, Drexel University Sports Management Professor Ellen Staurowsky, and NCAA Executive Vice President of Regulatory Affairs Oliver Luck all presented comprehensive arguments for and against paying student athletes above the cost of attendance. Given the nature of his position, Mr. Luck did not wish to be quoted for this story.

What is Amateurism?

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According to the NCAA’s Division I Rulebook (“Rulebook”), all college student athletes are required to be an “amateur” before participating in collegiate sports and throughout their intercollegiate athletic years in order to be and remain eligible. Furthermore, the Rulebook states the purpose of the amateurism rules is to promote the notion that student athletes are students first, athletes second.

Comparatively, the Merriam-Webster Dictionary defines an “amateur” as “a person who does something (such as a sport or hobby) for pleasure and not as a job.” The Cambridge Dictionary also has a specific definition in terms of sports: “relating to an activity, especially a sport, where the people taking part do not receive money.”

Based on the plain-text meaning of amateur, one would assume that there should not be an issue on whether college student athletes should be paid. However, the revenue generated by the Big 5 or Power 5 conferences (“Power 5”) — SEC, ACC, Pac-12, Big 12, and Big Ten — along with the demands of being a student-athlete give rise to the issue of payment for student athletes. Granted, a majority of Division I athletes in major football and men’s basketball programs receive full tuition scholarships, but what about the miscellaneous costs that arise?

Not every student-athlete is able to afford the unexpected or expected costs of being in college. With the revenue the Power 5 bring in from football and men’s basketball, could they give these athletes payment? Could they set aside money for their student athletes, since they are arguably the source of generating the revenue?

The issue on its face seems to have an easy one to remedy, but other factors need to be accounted for. For instance, what would the Power 5 conferences do about paying the athletes in less-revenue generating sports like tennis or track? How would the conferences determine the cost of the starting quarterback versus the third-string place kicker?

Ultimately, would the NCAA have to abolish the word “amateur” and replace it with
“minor-leaguer” or another term to indicate an athlete that receives pay, but is not yet a professional? How would this play a role in Title IX issues? The ramifications behind student-athletes receiving pay could be endless. Needless to say, there were varying opinions regarding the concept and definition of amateurism from the NSLI Conference panelists.

First and foremost, Professor Fort detailed how amateurism entails “restricted compensation.” Meanwhile, Staurowsky discussed the notion of amateurism and what it means to “protect” it. In 1906 when the NCAA was founded by Theodore Roosevelt, the founding principle stated, “‘in order to protect amateurism athletes could not be paid.’ … Coaches were also not to be paid. In light of present day, that seems interesting, to say the least,” Staurowsky said. Walter Camp, the father of American football, conceded on one-hand, going along with the NCAA. He also wrote and sold books on “the purity of amateurism,” while during the same time paying his players from a $100,000 slush fund.

“I think this is instructive in that we see the same contradictions today,” Staurowsky explained. And from her perspective, there, indeed, has been consistency throughout the years. “Walter Byers, the first executive director of the NCAA, referred to the concept of amateurism as a tool of control and a means of exploitation.”

 

 

O’Bannon, Alston, & Jenkins

O’Bannon v. NCAA may have the most impact on collegiate sports and payment of athletes. Former UCLA basketball player Edward O’Bannon sued the NCAA, Electronic Arts (EA), and the Collegiate Licensing Company for his likeness in a college basketball video game produced by EA. Other athletes joined O’Bannon’s lawsuit regarding the same issue — athletes should receive payment for the use of their likeness.

In August 2014, United States District Court Judge Claudia Wilken ruled that the NCAA’s compensation rules do in fact “unreasonabl[y] restrain trade.” Thus, the judge concluded that the NCAA’s compensation rules violated antitrust laws contained in Section 1 of the Sherman Antitrust Act. In other words, NCAA student athletes were set to receive compensation on top of their athletic scholarship. Judge Wilken laid out two specific remedies:

(1) NCAA can cap the amount of compensation that may be paid to student-athletes while they are enrolled in school; however, the NCAA will not be permitted to set this cap below the cost of attendance … [and]

(2) [T]he NCAA [will] [not] enforc[e] any rules to prevent its member schools and conferences from offering to deposit a limited share of licensing revenue in trust for their FBS football and Division I basketball recruits, payable when they leave school or their eligibility expires . . . [the] cap [will] [be] less than five thousand dollars (in 2014 dollars) for every year that the student-athlete remains academically eligible to compete.

The decision of the district court was appealed to the United States Court of Appeals for the Ninth Circuit. A three-judge panel affirmed part of Judge Wilken’s decision, but also reversed part of the district court’s decision as well. Specifically, the court upheld Judge Wilken’s ruling of the antitrust violation and cost of attendance remedy.

[T]he NCAA is not above the antitrust laws, and courts cannot and must not shy away from requiring the NCAA to play by the Sherman Act’s rules. In this case, the NCAA’s rules have been more restrictive than necessary to maintain its tradition of amateurism in support of the college sports market.

The Rule of Reason requires that the NCAA permit its schools to provide up to the cost of attendance to their student athletes. It does not require more.

Earlier that year, in January 2015, the Power 5 adopted cost of attendance scholarships . Thus, while the court reversed the lower court’s ruling regarding deferred compensation, it stated that student athletes are not allowed to receive compensation on top of the full cost of attendance. Judge Bybee wrote in his opinion:

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.

Once that line is crossed, we see no basis for returning to a rule of amateurism and no defined stopping point . . . At that point the NCAA will have surrendered its amateurism principles entirely and transitioned from its ‘particular brand of football’ to minor league status.

While both the NCAA and O’Bannon appealed to the U.S. Supreme Court, the Court denied their writs of certioraris earlier this month. Despite this, there are other legal cases — such as Alston v. NCAA and Jenkins v. NCAA — that could have a seismic shift on the college athletics industry.

In Alston v. NCAA, former college student athletes filed a lawsuit against the NCAA for monetary damages in the difference of athletic scholarships and the full cost of attendance. The plaintiffs further “argued the NCAA colluded to cap the value of an athletics scholarship below the actual cost of attendance at NCAA member institutions,” according to Sporting News.

Perhaps the least recognizable, but “could bring about the most change” to the future of college sports is Jenkins v. NCAA, at least according to City University of New York Law Professor Marc Edelman. In Jenkins, the plaintiffs argued that “if not for the NCAA’s restraints, member schools would seek to compete for the athletes’ services they provide,” Edelman explained. Alston and Jenkins “were consolidated by United States Judicial Panel on Multidistrict Litigation in June 2015,” according to court records.

Pay for Play

“The economics of pay for play is simple, from observation: they have an identifiable contribution to their university … then you get to [the number] of athletes who are actually earning their contribution, to which there is a lot of work,” Professor Fort explained. “Star basketball players are worth about a million bucks; star football players are worth about $600,000 to $650,000.”

He added that “an economist cannot answer whether we should pay players or not, as it is not an economy question, nor is it a legal or moral question … but a question on the fairness of the world. [T]he community should be able to sit down and decide something like that.”

Edelman described why the rationale of not paying athletes is circular. “They aren’t paid because they are amateurs and they are amateurs because they aren’t paid.” However, as the allegations of the University of Louisville have come to light, there exists a black market for paying athletes. As long as it remains undetectable, Edelman specifically noted that student athletes will be paid not just in cash or by monetary means, but by any means necessary.

 


Are Student-Athletes Employees?

Interestingly enough, Professor Staurowsky began by disclaiming in her introductory remarks that, among other matters, her remarks did not represent the views of her employer. Nevertheless, to illustrate the contrast between regular students and student athletes — whom the “NCAA member institutions insist are just like all other students” — Staurowsky relayed how students across the country have engaged in political expressions and voiced their opinions, while student athletes are subjected to similar disclaimers separating their views from their schools. This interpretation showed how the schools construct their relationship with student athletes just as an employer would with an employee.

In fact, some certainly believe that student athletes are laborers for their respective universities, providing work and subsequent profit. Thus, as they argue, student athletes are employees. As such, a group of Northwestern University football players attempted to form a player’s union. The National Labor Relations Board (NLRB) held, among other matters, if one school was allowed for their players to be considered employees, it would have grossly disrupted the overall college sports market.

As an example, a decision on Northwestern football players would only apply to other private universities around the country. Additionally, the Ohio Legislature passed a bill that asserts student-athletes are not employees, meaning that Ohio State University (fellow Big Ten member) student-athletes are not university employees . “If there was a broader unit, perhaps a bargaining unit of all Big Ten schools, they would have asserted jurisdiction,” Edelman noted.


The Future of College Athletics

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Credit: Notre Dame Magazine

The future of collegiate athletics and paying athletes is in murky waters. The outcome in Jenkins could either limit the possibility of athletes receiving pay or further open the door for compensation. Professor Fort believes a step toward change would be to simply ask student athletes what they want. Thus, they, when faced with a choice, may forgo their cost of attendance stipends and “pool all the money together to buy things like healthcare, equipment, travel expenses, etc. But we don’t ask them, and that’s a problem.”

1Ls Jake Armellani and Taylor Brisco both contributed to this story. 

Sources

  • Amateur, Merriam- Webster (last visited Oct. 24, 2016).
  • Amateur, Cambridge Dictionary (last visited Oct. 24, 2016).
  • Amateurism, NCAA.org (last visited Oct. 25, 2016).
  • Justin Sievert, The forgotten antitrust case: How an NCAA loss in Alston could impact college athletics, SportingNews (Nov. 4, 2015).

  • Michael McCann, In denying O’Bannon case, Supreme Court leaves future of amateurism in limbo, SI.com (Oct. 3, 2016).
  • O’Bannon v. NCAA, 7 F. Supp. 3d 955 (N.D. Cal. 2014).
  • O’Bannon v. NCAA, 802 F.3d 1049 (9th Cir. 2015).
  • Supreme Court rejects NCAA appeal of antitrust ruling, ESPN.com (Oct. 4, 2016).
  • Steve Berkowitz, NCAA asks for dismissal of “Kessler,” Alston cases, USA Today Sports (May 16, 2016, 7:36 PM).
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