“March Madness” means buzzer beaters, tournament brackets, and competition to college basketball fans.
But on Friday, a federal judge in Oakland got in on the month’s madness with a 104-page ruling outlining the limits to competition the National Collegiate Athletic Association has put on the market for Division I women’s and men’s basketball players and football players at schools in the NCAA’s Football Bowl Subdivision.
U.S. District Judge Claudia Wilken of the Northern District of California found the NCAA in violation of federal antitrust law and issued an injunction barring the organization and its member schools and conferences from capping education-related benefits such as computers, science equipment, postgraduate scholarships, and aid to study abroad to the athlete plaintiffs.
“We have proven to the court that the NCAA’s weak justifications for this unfair system are based on a self-serving mythology that does not match the facts,” said Hagens Berman Sobol Shapiro’s Steve Berman, who tried the bench trial for plaintiffs last year alongside Jeffrey Kessler of Winston & Strawn. “Today’s ruling will change college sports as we know it forever.”
Wilken’s ruling, however, stopped short of giving plaintiffs everything they had asked for—namely, eliminating all limits on compensation for the plaintiffs.
Donald Remy, the NCAA’s chief legal officer, said in a statement that Wilken’s decision “recognizes that college sports should be played by student-athletes, not by paid professionals.”
“The decision acknowledges that the popularity of college sports stems in part from the fact that these athletes are indeed students, who must not be paid unlimited cash sums unrelated to education,” said Remy, who noted the NCAA was still considering its options regarding a potential appeal.
Judge Finds the NCAA Violated Antitrust Laws … Again
Wilken ruled against the NCAA in a prior case brought on behalf of college athletes who claimed the NCAA used their names and likenesses in video games and broadcast footage without permission and improperly capped the aid they could receive at levels below the actual cost to attend college.
In the earlier case, Wilken found that the cap on aid violated antitrust laws and ordered the NCAA to increase its scholarship caps to cover the full cost of attendance. She also ordered the NCAA to allow member schools to pay athletes up to $5,000 in additional licensing revenue. The U.S. Court of Appeals for the Ninth Circuit overturned the $5,000-payment portion of the ruling in September 2017, finding that the payment would strike at the heart of the NCAA’s amateur model.
Friday’s ruling from Wilken keeps in place NCAA limits on cash-type payments, but frees up schools to increase benefits “related to the pursuit of various academic studies.” The NCAA, meanwhile, suggested that Wilken’s latest ruling was out of line with the earlier Ninth Circuit decision.
“That decision held that the rules governing college athletics would be better developed outside the courtroom, including rules around the education-related support that schools provide,” Remy said.
What’s an Amateur, Anyway?
While Wilken’s ruling stopped short of forcing a free-market, professional sports-type approach to player compensation on the NCAA, she did criticize the NCAA’s lack of a formal definition of amateurism, a principle the organization claims is central to its success in drawing in fans.
“The ‘Principle of Amateurism,’ as described in the current version of the NCAA’s constitution, uses the word ‘amateurs’ to describe the amateurism principle, and is thus circular. It does not mention compensation or payment,” Wilken wrote. She also noted that the NCAA offered no “coherent” explanation of the “pay for play” model it seeks to avoid, especially since the types and amount of total benefits to college athletes have gone up since her prior ruling and there has been no loss of audience or revenue in major college sports.
She wrote, “The only common thread underlying all forms and amounts of currently permissible compensation is that the NCAA has decided to allow it.”