The NCAA, antitrust and the future of college sports
The NCAA is asking Congress to keep college athletes as students, not employees.
They say it’s to protect the students.
Opponents say it’s about the money. Will the NCAA get its antitrust exemption and what could it mean if it does?
“Its mission is to protect athletes but that is not how the NCAA behaves,” Katie Van Dyck, a senior legal counsel at American Economic Liberties Project, says. “The NCAA seems to be acting to protect the interests of the schools and the conferences and its own financial interests.”
Today, On Point: Sports, money, monopoly and the NCAA.
Katie Van Dyck, senior legal counsel at American Economic Liberties Project. Author of the forthcoming report “Playing by the Rules: The Case Against an Antitrust Exemption for the NCAA.”
Jill Bodensteiner, vice president and director of athletics at Saint Joseph’s University.
Put yourself back in 1922. Warren G. Harding is president.
WARREN G. HARDING: My countrymen, the first claiming source of Americanism was writed in framing the Federal Constitution in 1787.
CHAKRABARTI: It’s a time, so long ago, that only a couple of years earlier, a radio station reporting mostly live results of the 1920 presidential election begins its broadcast with the equivalent of, is this thing on?
NEWS BROADCAST: This is KDKA of the Westinghouse Electric and Manufacturing Company in East Pittsburgh, Pennsylvania. We shall now broadcast the election returns. We’d appreciate it if anyone hearing this broadcast would communicate with us, as we are very anxious to know how far the broadcast is reaching, and how it is being received.
CHAKRABARTI: It just so happens that 1922 was a notable year for another reason. That year, the Supreme Court made a decision in favor of Major League Baseball. It’s a decision so unique, baseball has enjoyed the fruits of the ruling all alone for more than 100 years. Because 1922 was the year that the U. S. Supreme Court made the quizzical decision to grant baseball an exemption from antitrust laws, because, according to Justice Oliver Wendell Holmes, quote, “The business of giving exhibitions of baseball are purely state affairs.” End quote.
And therefore, do not violate the Sherman Antitrust Act. Even though Holmes also admitted that, quote, “In order to attain for these exhibitions the great popularity that they have achieved, competitions must be arranged between clubs from different cities and states.” End quote. Even though subsequent courts have called the 1922 ruling an anomaly and an aberration, Major League Baseball has continued all on its own to enjoy the perks of its antitrust exemption.
But perhaps no longer, because now the NCAA wants to muscle in on the monopoly game.
(LSU GAME ANNOUNCER) (CHEERS)
CHAKRABARTI: This is On Point, I’m Meghna Chakraborti, and that was from the LSU women’s basketball team winning their first ever championship title this year. A very cool moment. Now, NCAA sports is very popular. And very big business. Division 1 sports are valued at almost $16 billion per year. And for years, debate has continued to ratchet up over the players, a.k.a. the student athletes, who make the magic on the court, in the field, in the pool, and in the gym. The debate’s over whether they deserve to get paid.
Now the NCAA is doing everything in its power to be sure that does not happen, and it’s now turning to Congress and requesting that representatives and senators grant the NCAA an antitrust exemption, similar to what Major League Baseball got from the Supreme Court in 1922, in order to protect the sanctity of collegiate amateur sports, the NCAA says. Because if they have to pay players, NCAA President Charlie Baker warns that collegiate sports, as you know it, could cease to exist.
CHARLIE BAKER: Because I do believe in your state and in the state of every single person on this committee, literally thousands of your interscholastic athletic programs will go away because it completely changes everything about what it means to be a student athlete and what it means to be a college that supports student athletics. And I think that’s a problem.
CHAKRABARTI: Is it? By the way, Major League Baseball is back at the Supreme Court because a new case brought by the minor leagues and the Baseball Players Association is challenging MLB’s antitrust exemption. And according to legal experts, this case has the best chance in a half century to knock down baseball’s 100-year-old monopoly status.
So clearly there is a lot of action going on around sports, players, and monopolies, and today we’re going to specifically take a look at the NCAA. And to do we’re joined by Katie Van Dyck. She’s senior legal counsel at the American Economic Liberties Project. She’s also author of the forthcoming report, “Playing by the Rules: The Case Against an Antitrust Exemption for the NCAA.”
That’s going to be published later this year. Katie, welcome to On Point.
KATIE VAN DYCK: Thank you for having me.
CHAKRABARTI: Okay. So first of all, let me ask you, what piqued your interest about collegiate sports and the fact that the NCAA is seeking an antitrust exemption?
VAN DYCK: I grew up in the state of Texas.
CHAKRABARTI: (LAUGHS) Okay.
VAN DYCK: And what Lindsey Graham called the religion of college football.
And I’m a big TCU fan, who made it to the college football playoffs last year. But, as an antitrust lawyer, seeing the gross profits, the huge revenues that the NCAA and its member schools bring in every year off the backs of these athletes’ blood, sweat and tear, it begs the question, what exactly is this system?
As Charlie Baker said, what does it mean to be a student athlete?
CHAKRABARTI: Now, I just want everyone to know that a little later in the show, we are going to be hearing from the director of athletics from a college. So we’ll get that perspective for sure. But Katie, so tell me a little bit more. What exactly is the NCAA asking Congress to do?
And why is it going through Congress and not the courts?
VAN DYCK: So to answer your second question, it’s going through Congress and not the courts, because the courts have already said that the NCAA is not exempt from our antitrust laws. With respect to what exactly the NCAA is asking for, Charlie Baker wrote in an op-ed a few weeks ago that we need, that Congress needs to, quote, expand the NCAA’s legal authority.
And to understand exactly what that means, we do have to go back a few years and look at the Supreme Court decision from 2021, Alston v. the NCAA, that has led us to where we are today. And to explain real quickly what exactly antitrust means. So our antitrust laws, specifically the Sherman Act for our purposes today, says that contracts and restraint of trade are illegal.
So what does that mean? That means that two businesses, in this case, two or more businesses, in this case, the NCAA and its member schools and its member conferences, can not come together and agree to artificially fix prices, and that’s exactly what they did. And that’s exactly why the Supreme Court said these were naked violations of the law.
The NCAA set rules limiting how much money schools are allowed to give to its student athletes in Alston, specifically education related benefits, and the schools agreed to abide by those rules. And that is a per se naked violation of the Sherman Act. And the court said, what you’re doing here before this court today is asking for immunity from our antitrust laws.
And we’re not going to give it to you. Your claim that these students are amateurs is a myth. You had five years to tell us what amateurism is and you haven’t done it. And so we’re not going to allow these blatant violations of the law anymore. Okay, but the NCAA though did make a significant change thereafter, if not paying all athletes, but allowing athletes to use their, what, name, image, and likeness for contracts and to get paid that way.
Is that not right?
VAN DYCK: That is correct. So after that decision came out, the NCAA went, “Okay, we have a problem now.” And they temporarily lifted their ban on, as you said, name, image and likeness contacts. And that just means endorsement deals, when someone’s picture is on the box of Wheaties, or the Alabama quarterback is in a national diet Dr. Pepper commercial. That’s what that means.
And so the NCAA has temporarily lifted its ban on that, but it wants to regulate it more. And as Charlie Baker has said, they know they can’t do that under Supreme Court precedent now, so they’re trying to get Congress to let them.
CHAKRABARTI: Okay, so then Congress would essentially, what, have to write a specific law favoring the NCAA’s request that even though it operates nationally, across state lines, technically, they haven’t defined what amateurism is, they still should be exempt from rules that would regulate any other kind of business with similar practices.
VAN DYCK: Correct. Just like it regulates the NBA and the NFL and NHL.
CHAKRABARTI: Okay. I suppose I just asked a loaded question. But tell me, what is your argument against Congress giving the NCAA an antitrust exemption?
VAN DYCK: First of all, antitrust exemptions are rare for a reason. The reason, when you look at the history of antitrust laws in the United States, the reason these were passed, the reason the Sherman Act that I was just talking about was passed is that Congress viewed this sort of monopoly power as destructive to our society and inherently in conflict with a democratic society and a democratic economy.
I’m going to paraphrase a little bit here, but John Sherman, the architect of this law, said if we won’t tolerate a king in our political system, we shouldn’t tolerate a king in our economic one. And what this recognizes is that it creates an extraordinary imbalance of power so that the NCAA and the schools are bringing in $3.3 billion a year in television revenue.
And athletes get and coaches are paid enormous amounts, and athletes do not have any protections or ability to bargain against that, they don’t have the ability to bargain for better what are essentially working conditions, safer practices, better hours. And their wages are artificially depressed.
When you look at what a professional athlete makes vs. a athlete in college.
CHAKRABARTI: Okay. So today we are talking about the NCAA’s request to Congress that it be granted an antitrust exemption. Because the NCAA argues that if it doesn’t get it and it eventually has to pay student athletes, that would destroy the concept of amateur college sports and could actually eliminate some of those sports all together.
So we’ll have a lot more when we come back.
This article was originally published on WBUR.org.
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