Thaddeus Kennedy is from Dedham, MA. He is a rising senior at Harvard College, where he concentrates in History. Kennedy serves as the president of the Harvard Undergraduate Constitutional Law Society. He is an avid Boston sports fan and plays lacrosse. Recently, Kennedy gained admission to Harvard Law School through the Junior Deferral Program and will join the class of 2027. This summer, he served as a research assistant for Professor Peter Carfagna, Owner of Magis LLC and former General Counsel of International Management Company. Kennedy strongly desires to advance both student and professional athletes’ rights and would love to do so through a career in law and sports business.
Since several states passed name, image, and likeness (NIL) legislation, the Power 5 Conferences (the ACC, Big Ten, Big 12, Pac-12, and SEC) and the National College Athletic Association (NCAA) have lobbied Congress for an antitrust exemption for their amateurism rules concerning student-athlete compensation.[1] In their final report regarding federal and state NIL bills released in April, the NCAA Board of Governors affirmed that antitrust lawsuits severely disrupt their ability to support their student-athletes and “effectively regulate intercollegiate athletics.” [2] The organization argued that the time and resources it devotes to fighting these lawsuits would otherwise go towards providing solutions to pertinent issues facing college sports.[3] Nevertheless, Congress ought not grant the NCAA an antitrust exemption because doing so would contravene economically sound legal precedent and would give the NCAA undue power to restrict student-athletes’ rights.
In NCAA v. Board of Regents,[4] the Supreme Court established that even if the NCAA’s amateurism rules are presumed to be competitive, they are not to be exempt from antitrust scrutiny. Justice Stevens wrote, “While as the guardian of an important American tradition, the NCAA’s motives must be accorded a respectful presumption of validity, it is nevertheless well settled that good motives will not validate an otherwise anticompetitive practice.”[5] Even under the assumption that NCAA regulations are beneficial to student-athletes and are helpful in preserving the model of college sports, NCAA policies cannot be automatically deemed lawful. They must be proven to serve a legitimate procompetitive purpose. This sentiment has been long upheld by federal courts. In O’Bannon v. NCAA, Judge Bybee of the Ninth Circuit echoed Justice Stevens’s line of reasoning: “Although we agree with the Supreme Court and our sister circuits that many of the NCAA’s amateurism rules are likely to be procompetitive, we hold that those rules are not exempt from antitrust scrutiny; rather, they must be analyzed . . . .”[6] The majority panel “reaffirm[ed] that NCAA regulations are subject to antitrust scrutiny and must be tested in the crucible of the Rule of Reason. . . . [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.”[7] Ninth Circuit Judge Thomas reasserted this notion in National Collegiate Athletic Association Athletic Grant-In Aid Cap Antitrust Litigation. He held that “courts must continue to subject NCAA rules, including those governing compensation, to antitrust scrutiny.”[8]
Holding NCAA rules accountable to federal antitrust laws has rewarded student-athletes with rights and renumeration that they might not otherwise have received. Following White v. NCAA (2008), past student-athletes were provided access to a $10 million fund so that they could receive payment to continue their education, and colleges were permitted to give student-athletes year-round health insurance. After O’Bannon v. NCAA (2014), student-athletes were able to receive athletic scholarships up to the full cost of attendance. And finally, through National Collegiate Athletic Association Athletic Grant-In Aid Cap Antitrust Litigation (2019), student-athletes are now able to receive unlimited education-related benefits. Student-athletes would not have been able to receive any of these benefits had courts not subjected NCAA amateurism rules–especially those regarding compensation–to antitrust scrutiny. As antitrust lawsuits have been the primary avenue through which student-athletes have been able to protest unfair NCAA regulations, bypassing legal precedent and providing the NCAA with an antitrust exemption now would unnecessarily diminish student-athletes’ rights and leave them without recourse moving forward.
In recent years, antitrust exemptions given by Congress have been found to be illegitimate. In 2007, President George W. Bush’s Antitrust Modernization Commission reported that “many, if not most or all,” of the thirty statutory immunities from antitrust laws were dubious.[9] The Commission affirmed that “many are vestiges of earlier antitrust enforcement policies that were deemed to be insufficiently sensitive to the benefits of certain types of conduct. Others are fairly characterized as special interest legislation that sacrifices general consumer welfare for the benefit of a few.”[10] An antitrust exemption given to the NCAA would be no different from the others. The salaries of NCAA administrators, athletic directors, and coaches would continue to skyrocket at the expense of the well-being of the 500,000 student-athletes who collectively generate $14 billion for their athletic programs each year.[11] In their study “The $6 Billion Heist,” National College Players Association President Ramogi Huma and Drexel University Sport Management professor Ellen J. Staurowsky found that FBS football and men’s basketball players in the years between 2011 and 2015 would receive $6 billion if not for NCAA rules depriving them of their fair market value and that the average men’s basketball and football player would respectively receive an average of $714,000 and $1.5 million above the value of their full athletic scholarships.[12] Even FBS athletic directors concede that they are hesitant to permit student-athlete NIL compensation because it poses a threat to their athletic departments’ revenues.[13]
Furthermore, the 2007 Antitrust Modernization Commission affirmed that “[antitrust] immunities should rarely (if ever) be granted and then only on the basis of compelling evidence that either (1) competition cannot achieve important societal goals that trump consumer welfare, or (2) a market failure clearly requires government regulation in place of competition.”[14] An antitrust exemption for the NCAA would meet neither of these requirements. The NCAA has not proven that antitrust immunity would achieve societal goals that would supersede consumer welfare. It has only declared that antitrust scrutiny to its bylaws causes the organization to devote excessive time and resources to defend its practices.[15] Both consumer welfare and the NCAA’s purported goal to empower student-athletes would be compromised if NCAA bylaws were not subject to antitrust scrutiny.
With an antitrust exemption, the NCAA would have unbounded power to restrain athletes’ fair market rights, without facing legal repercussions.[16] As Judge Smith wrote in his concurring opinion in National Collegiate Athletic Association Athletic Grant-in Aid Cap Antitrust Litigation, “The treatment of Student-Athletes is not the result of free market competition. To the contrary, it is the result of a cartel of buyers acting in concert to artificially depress the price that sellers could otherwise receive for their services. Our antitrust laws were originally meant to prohibit exactly this sort of distortion.”[17]
[1] Name, Image, and Likeness (NIL) legislation refers to laws that have been passed to allow student-athletes to earn compensation for the use of their NIL. Under such laws, student-athletes would be able to obtain compensation for entering into endorsement deals for commercial products and services, advertising camps and conducting clinics, starting their own businesses, and signing autographs.
[2] NCAA Board Governors, Federal and State Legislation Working Group: Final Report and Recommendations (2020), available at https://ncaaorg.s3.amazonaws.com/committees/ncaa/wrkgrps/fslwg/Apr2020FSLWG_Report.pdf [https://perma.cc/9LY2-B382].
[3] Protecting the Integrity of College Athletics, Hearing Before the S. Comm. on the Judiciary, 116th Cong. (2020) (statement of Mark Emmert, President, Nat’l College Athletic Ass’n), available at https://www.judiciary.senate.gov/imo/media/doc/Emmert%20Testimony.pdf [https://perma.cc/84CM-PWRF].
[4] 468 U.S. 85 (1984).
[5] Id. at 101 n.23.
[6] 802 F.3d 1049, 1053 (9th Cir. 2015).
[7] Id. at 1079.
[8] 958 F.3d 1239, 1254 (9th Cir. 2020) (citing O’Bannon v. NCAA, 802 F.3d at 1064 (9th Cir. 2015) (“The amateurism rules’ validity must be proved, not presumed.”).
[9] Antitrust Modernization Commission, Report and Recommendations viii (2007), available at https://govinfo.library.unt.edu/amc/report_recommendation/amc_final_report.pdf [https://perma.cc/R7V3-KPYX].
[10] Id.
[11] Nat’l Collegiate Athletic Ass’n. Student-Athlete Participation: 1981-82- 2018-2019 (2019), available at https://ncaaorg.s3.amazonaws.com/research/sportpart/2018-19RES_SportsSponsorshipParticipationRatesReport.pdf [https://perma.cc/7KLM-HBHT]; U.S. Senator Chris Murphy, Madness, Inc.: How everyone is getting rich off college sports – except the players (2019), available at https://www.murphy.senate.gov/imo/media/doc/NCAA%20Report_FINAL.pdf [https://perma.cc/2GED-VYVE].
[12] Ramogi Huma & Ellen J. Staurowsky, Nat’l C. Players Ass’n, The $6 Billion Heist: Robbing College Athletes Under the Guise of Amateurism (2012), available at https://www.ncpanow.org/studies-and-revenue/study-the-6-billion-heist-robbing-college-athletes-under-the-guise-of-amateurism [https://perma.cc/NX87-XAVP].
[13] Ross Dellenger, Next Steps for a Federal Name, Image and Likeness Bill Coming into Focus, Sports Illustrated (Jul. 7, 2020), https://www.si.com/college/2020/07/07/ncaa-nil-athlete-compensation-senate [https://perma.cc/58HJ-GMNQ]; Steve Berkowitz, New name, images, likeness lawsuit against NCAA could put hundreds of millions of dollars at stake, USA Today (Jun. 15, 2020), https://www.usatoday.com/story/sports/college/2020/06/15/ncaa-lawsuit-over-athletes-images-likeness-puts-big-money-stake/3189283001/ [https://perma.cc/LB3D-Z5KM].
[14] Antitrust Modernization Commission, supra note 9.
[15] NCAA Board Governors, supra note 2.
[16] Exploring a Compensation Framework for Intercollegiate College Athletics, Hearing Before the S. Comm. on Commerce, Science, and Transportation, 116th Cong. (2020) (statement of Dionne Koller, Professor of Law, University of Baltimore), available at https://www.commerce.senate.gov/services/files/9ED0B59D-1FE2-43E8-8D07-E84C3DA9F2A9 [https://perma.cc/7R2T-79PT].
[17] 958 F.3d 1239, 1267 (9th Cir. 2020)