Nearly exactly a year after a federal appeals court ruled that the NCAA’s amateurs-only requirement violates federal antitrust laws — while simultaneously shutting down a plan to pay certain college athletes for their work — the U.S. Supreme Court has decided to not hear any further appeals in this dispute.
This case goes back to 2009, when former UCLA basketball player Ed O’Bannon sued the NCAA over its use of student-athletes’ likenesses in video games without compensation, and the organization’s requirement that college athletes be amateurs.
In 2014, a U.S. District Court determined that this NCAA prohibition is an unlawful restraint of trade in violation of the Sherman Antitrust Act.
That judge ruled that the NCAA could not stop schools from compensating students in the most lucrative of collegiate sports — FBS football and Division I men’s basketball — for the use of their likenesses, through scholarships that cover the full cost of attending school, and through deferred payments of up to $5,000 per year that would be held in trust for student-athletes for after they leave college.
But then in Sept. 2015, the Ninth Circuit Court of Appeals cut that lower court ruling in two. On the one hand, the appeals panel held that the amateurs-only rule has “an anticompetitive effect on the college education market.”
Without that rule, said the judges, “schools would compete with each other by offering recruits compensation exceeding the cost of attendance, which would ‘effectively lower the price that the recruits must pay for the combination of educational and athletic opportunities that the schools provide.’”
While student-athletes pay for college through their labor and by allowing the schools to use their names, images, and likeness, the fact that students are not allowed to anything for themselves from these same assets, the Ninth Circuit said that colleges have collectively agreed to put a price of “zero” on the athletes, and that the schools “behave as a cartel — a group of sellers who have colluded to fix the price of their product.”
Then the Ninth Circuit disagreed with the lower court, saying that the judge erred in allowing the small, deferred payments.
“Having found that amateurism is integral to the NCAA’s market, the district court cannot plausibly conclude that being a poorly-paid professional collegiate athlete is ‘virtually as effective’ for that market as being as amateur,” read the 2015 opinion, which determined that scholarships covering the full cost of an education would suffice as compensation.
The sides appealed their respective losses to the full Ninth Circuit, but that request was denied in Dec. 2015.
O’Bannon was the first to petition [PDF] the Supreme Court, arguing that the appeals panel had erred by simultaneously considering that the NCAA’s mandated amateurism violated the law while also being a “procompetitive benefit.”
“So defined, ‘amateurism’ is not an ‘effect’ of the restraint at all, much less a procompetitive effect,” reads O’Bannon’s petition. “It is simply another way of describing the restraint itself.”
The NCAA subsequently filed a petition [PDF] with the Supremes, contending that the earlier courts had incorrectly found violations of the Sherman Antitrust Act. The organization also argued that there is a First Amendment protection against a state-law right-of-publicity claim, meaning the NCAA was protected in using student-athletes’ likenesses to be used in video games without providing compensation to the athletes.
Apparently neither side caught the interest of SCOTUS, with the nation’s highest court rejecting both petitions this morning without comment. That means the Ninth Circuit’s ruling stands.
“While we are disappointed with this decision not to review this case, we remain pleased that the Ninth Circuit agreed with us that amateurism is an essential component of college sports and that NCAA members should not be forced by the courts to provide benefits untethered to education, including providing any payments beyond the full cost of attendance,” said an attorney for the NCAA in a statement.
by Chris Morran via Consumerist
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