Supreme Court Brings NCAA Athletes Closer to Fair Pay | Opinion

Last week the Supreme Court took an important step towards fair pay for college athletes. In a unanimous ruling, it held that some of the NCAA's compensation restrictions violated antitrust rules, which generally prohibit collusion with respect to wage-setting. The Court also hinted that the status quo, in which coaches and administrators get paid millions and players get paid bupkis, is untenable. This is a welcome decision—it is unfair to force student athletes to choose between the credential of college and the payday of the pros.

The Court's decision was a narrow one because the players did not challenge the broader compensation rules that prevent college players from making millions. Instead, they focused on education-related benefits, such as paid internships, certain scholarships and school supplies. The Court did not pass judgment on the rules, but it went out of its way to say that future challenges were doctrinally fair game. Better still, Justice Kavanaugh wrote a concurring opinion saying the NCAA may lack a justification for its broader restrictions.

These restrictions are particularly onerous. Only yesterday, and in response to state legislation and litigation, did the NCAA relent and allow student athletes to benefit off their own likeness in video games. They are still prevented from being paid for their talents. "The reason universities are able to build new facilities and pay large salaries is in no small part due to ticket sales and merchandise from student athletes," says Reed Duchscher, a former college athlete, sports agent, and CEO of Night Media, "It's a shame these athletes can't be paid, while the NCAA continues to make money hand over fist."

The NCAA's argument went like this: it needs to use its monopoly power to restrict college athletes from being paid because the product it provides is made possible by those restrictions. It argued that one of the important features of college sports is precisely the amateurism of the players—the fact that they are not paid or professional. Justice Kavanaugh shredded this argument by noting that in no other type of business would we allow monopolists to make such arguments: "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.... News organizations cannot join forces to curtail pay to reporters to preserve a 'tradition' of public-minded journalism."

Supreme Court group photo
Members of the Supreme Court pose for a group photo at the Supreme Court in Washington, DC on April 23, 2021. Erin Schaff-Pool/Getty Images

Some economists say that cartels and monopolies cannot last long on the free market and that antitrust actions are generally inefficient. But this cartel has a dark, state-sponsored underbelly. Unlike most alleged monopolies, which are simply creatures of consumer demand, the federal government itself has propped up the college sports cartel with criminal sanctions. There have been a number of high-profile prosecutions of coaches and others who violated the NCAA's compensation rules. The argument goes that, because these schools receive federal funding, any violation of private contract terms is criminally defrauding the federal government.

Many judges have been reluctant to criminalize the NCAA's Handbook. As a practical matter, the FBI probably can better use its resources protecting the country than deciding whether a college athlete got too nice of a suit or car. Employees who violate contracts with their employers rarely are threatened with felony prosecution, yet coaches like South Carolina's Lamont Evans and USC's Tony Bland pled guilty to federal bribery charges.

If the NCAA is right and consumers really do demand amateur sport, then let the cartel provide it without the force of the federal government behind it. Generally, if you have to send your competition to jail in order to continue making a living, chances are you aren't really satisfying consumer demand.

Justice Kavanaugh also pointed out the racial element of all of this: "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."

If college athletics was a sacred institution that shouldn't be sullied by monetization, then coaches and administrators would not get such lavish compensation. But it's not—college athletics is big business and it's time to allow the drivers of that business to enjoy the fruits of their labor.

Max Raskin (@maxraskin) is director of research at QVIDTVM Inc. and an adjunct professor of law at New York University School of Law.

The views expressed in this article are the writer's own.