NCAA defends scholarships for college athletes

Lawsuit challenges rules that support hundreds of thousands of students

 

About the Case | Trial Schedule | NCAA and Amateurism | Statements | Case History

About the Case

The NCAA is defending its rules that provide a pathway to opportunity for nearly half a million college athletes each year. In the lawsuit titled Alston v. NCAA, the Association will clearly demonstrate that the rules in place are essential to providing academic opportunities for student-athletes on campus. The lawsuit also names each of the Division I Football Bowl Subdivision conferences as co-defendants in the case. Those conferences are working with the NCAA in joint defense. The plaintiffs have asked the court to eliminate or replace current rules with a court determination, otherwise known as a styled class action seeking injunctive relief. Only the sports of men’s basketball and football in Division I are directly involved with this case, although this court’s ruling will have significant impact across all NCAA sports.

In the trial, the NCAA will reiterate that college sports are uniquely American and have enabled tens of thousands of student-athletes to earn their college degrees debt-free each year. In particular, the NCAA will argue:

NCAA rules prioritize both academics and athletics: Allowing student-athletes to be paid for athletics performance would undermine the balance between the two and detract from the integration of academics and athletics in the campus community.

NCAA rules further the popularity of college sports: The U.S. District Court for the Northern District of California and the U.S. Court of Appeals for the 9th Circuit already have recognized in an earlier case, O’Bannon v. NCAA, that fundamentally changing the nature of college sports through elimination of financial aid and benefits rules would erode the appeal for fans, alumni and students.

No viable alternative that meets legal standards has been identified: The plaintiffs have not proposed a less restrictive alternative to the NCAA rules they are challenging. The plaintiffs offer two unworkable proposals. First, the plaintiffs argue that each athletics conference should have complete autonomy, which would divide college sports. Second, the plaintiffs argue that the NCAA should eliminate restrictions on benefits that tether college sports to academics, which is a poorly disguised effort to permit “pay-for-play” and would professionalize college sports.

NCAA members are best positioned to govern college sports: Courts generally recognize that a membership association should be allowed to implement and enforce its own rules without judicial interference. In the case of the unique nature of college athletics programs, the Supreme Court of the United States has made it clear that the NCAA has ample latitude to administer college sports. The plaintiffs cannot simply replace the judgment of more than 1,100 colleges and universities with what they believe to be a better system.

Grant-in-Aid Cap Litigation Trial Schedule

September 2018
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The NCAA and Amateurism

The NCAA helps make it possible for hundreds of thousands of students to get a college education, debt-free.

Each year, NCAA colleges and universities provide more than $3.2 billion in athletics scholarships to more than 175,000 student-athletes. These scholarships not only open the door to opportunities but also mean that students do not have to take on the burden of large student loans.

The NCAA also financially supports student-athletes in multiple ways. From its annual revenue, generated primarily from television and marketing rights and championship ticket sales, the NCAA distributes funds in more than a dozen ways — almost all of which support nearly half a million student-athletes. Learn more about how the NCAA uses its funds to support student-athletes across the country.

 

In addition to financial scholarships, the NCAA provides resources and sets rules that help students succeed academically.

The NCAA continually is reviewing and revising its rules to better support student-athletes in the classroom.

Division I athletics programs can offer cost of attendance to the student-athletes playing the sports of basketball and football, as well as other sports. In addition to tuition, fees, books and room and board, these scholarships provide for expenses such as academic-related supplies, transportation and other similar living expenses while pursuing a college education.

NCAA schools also provide access to tutoring, study labs and career counseling services, helping to ensure student-athletes have ample academic and professional support. Learn more about how the NCAA is committed to improving the student-athlete experience.

In addition to the support provided by the NCAA and its members, the academic support provided to student-athletes has resulted in graduation rates that meet or exceed that of all other students.

Most importantly, student-athletes are often more attractive job candidates because they have demonstrated the ability to balance competing demands, work in a team environment and push themselves to excel.

 

Replacing scholarships with salaries would devastate college sports as we know it.
  • Changing the rules to allow payment of student-athletes based on their athletics ability incentivizes athletics over academics, according to experts.
  • Similarly, student-athletes would be less integrated into the student community if players were paid professionals, according to experts.
  • For many universities, the result could be fewer dollars for academics, fewer scholarships and fewer nonrevenue sports. As a result, schools may:
    • Divert funds from their academic budgets to continue competing in the athletic arena.
    • Drop some or all their nonrevenue or unprofitable sports, such as wrestling, track and field, gymnastics, tennis, volleyball, or swimming and diving.
    • Cut the number of student-athletes who get scholarships so the school would have more money to attract and pay the top basketball and football stars.
    • Recognize they could no longer compete with the highest-resourced schools, meaning the big sports schools would get even more dominant and the gap between them and other programs would widen, resulting in a smaller group of competitive programs.

NCAA Statements Related to Grant-in-Aid Cap Litigation

Date

Aug. 31, 2018

 

Lawsuit Status

NCAA and plaintiff opening statements are made in writing in advance of the September 2018 trial.

NCAA Response

As was demonstrated in the O’Bannon case, the NCAA will show that our rules are essential to providing educational opportunities to hundreds of thousands of student-athletes across the country. We are proud that many student-athletes can receive a college education debt-free, access to resources that ensure greater academic success, and an experience that will pay dividends for a lifetime.  Allowing paid professionals to replace student-athletes on college campuses would change the face of college sports as we know it.
– Donald Remy, NCAA chief legal officer

 

Date

March 28, 2018

 

Lawsuit Status

U.S. District Judge Claudia Wilken issues Order Granting in Part and Denying in Part Cross-motions for Summary Judgment.

NCAA Response

(The ruling) recognized, as other courts have for decades, that principles of amateurism and student-athlete well-being are critical to college sports. We look forward to proving at trial that the rules are essential to providing educational opportunities to nearly half a million student-athletes.

 

Date

February 3, 2017

 

Lawsuit Status

NCAA and plaintiffs reach a settlement to compensate student-athletes in the class who did not receive full cost of attendance in scholarship.

NCAA Response

Eleven NCAA Division I conferences and the NCAA agreed to create a nearly $208.7 million fund for the benefit of current and former NCAA Division I basketball and Football Bowl Subdivision football student-athletes to settle the monetary claims portion of the grant-in-aid class-action lawsuit. Although the lawsuit included conference defendants, the NCAA Board of Governors determined the settlement will be funded entirely from NCAA reserves, and no conference or member schools will be required to contribute. The settlement is subject to approval by the court and will award class members money up to, but not exceeding, their full cost of attendance. Read more >>

 

Date

December 7, 2015

 

Lawsuit Status

U.S. District Judge Claudia Wilken certified three classes in the case, covering all players in the Division I Football Bowl Subdivision, as well as all men’s and women’s Division I basketball players who have received full scholarships.

NCAA Response

The NCAA and its members award $2.7 billion in athletics scholarships every year to more than 150,000 student-athletes. The plaintiffs continue to misconstrue and inaccurately portray these scholarships. As other federal court decisions have consistently stated, agreeing to appropriate limits on financial aid does not violate antitrust laws.

 

Date

September 26, 2014

 

Lawsuit Status

NCAA files response in support of the motion to dismiss the Jenkins, Alston and related cases.

NCAA Response

The NCAA and the co-defendant member conferences filed their response in support of their motion to dismiss the Jenkins, Alston, and related cases. The filing outlines the flaws and implausibility of the plaintiffs’ case. Under the plaintiffs’ theory, the court’s own injunction in the O’Bannon decision is an antitrust violation. The O’Bannon and other federal court decisions, however, confirm what the NCAA and its members have said all along — agreeing to appropriate limits on financial aid to student-athletes does not violate antitrust laws.

 

Date

September 4, 2014

 

Lawsuit Status

NCAA files motion to dismiss the Jenkins, Alston and related cases.

NCAA Response

Today, the NCAA and the member conferences named as co-defendants asked Judge Claudia Wilken to dismiss the Jenkins, Alston, and related cases seeking unlimited compensation for certain Division I student-athletes.  Last month, in O’Bannon, Judge Wilken issued a decision confirming that the antitrust laws allow the NCAA to set limits on benefits provided to student-athletes, including the amount and nature of awards related to athletics-based scholarships. The NCAA and its co-defendants argue that Judge Wilken should dismiss these complaints based on her decision in O’Bannon and numerous other federal court decisions. These rulings make clear that the current plaintiffs' lawsuits are misplaced. While the NCAA and its co-defendants acknowledge Judge Wilken’s legal reasoning on the legitimacy of limiting the amount and nature of financial benefits to student-athletes, the NCAA will continue to appeal the O’Bannon decision because it does not agree with the court’s finding in that case that the NCAA violated antitrust laws.

 

Date

April 10, 2014

 

Lawsuit Status

NCAA files a motion to oppose plaintiff Shawne Alston’s motion to consolidate his antitrust case with plaintiff Martin Jenkins and three other student-athletes.

NCAA Response

Alston challenges only the NCAA bylaw limiting athletics scholarships to grants-in-aid and seeks damages for the difference between the grants-in-aid and the actual cost of attendance for college football players in the Atlantic Coast, Big 12, Big Ten, Pac-12 and Southeastern conferences. By contrast, Jenkins challenges the NCAA rules that prohibit member institutions from paying salaries to student-athletes, and seeks primarily an injunction striking down that prohibition with respect to all Division I FBS football and Division I men’s basketball players. Read more >>

 

O’Bannon v. NCAA background and case history

In 2009, Ed O’Bannon, a former UCLA basketball student-athlete, sued the NCAA and the Collegiate Licensing Co., challenging rules that prevented student-athletes from being compensated for the use of their name, image and likeness. Among other things, O’Bannon claimed the rules violated antitrust law.

After years of procedural developments, O’Bannon’s antitrust claims were tried before Judge Claudia Wilken in the U.S. District Court in Oakland, California, in June 2014.

 

 

District Court Proceedings

After a bench trial, Judge Wilken found there were two procompetitive justifications for rules that place restraints on student-athlete compensation: The rules help to integrate athletics and academics, and the rules play a role in preserving the popularity of the NCAA’s product.

However, the court then held that the procompetitive characteristics of the rules could be achieved by allowing revenue from players’ likenesses to be collected, held in a trust, and distributed equally and based on licensing, not athletic performance; compensation would be capped at $5,000 for every year of eligibility. Student-athletes, however, could not receive money for endorsements of commercial products, as it would undermine the efforts of both the NCAA and its member schools to protect against the “commercial exploitation” of student-athletes. – Judge Claudia Wilken’s Ruling, O’Bannon v. NCAA, August 2014

 

Appellate Court Proceedings

Following the district court ruling, both the NCAA and the plaintiffs appealed the decision to the U.S. Court of Appeals for the 9th Circuit. In September 2015, the appeals court struck down the compensation component of the lower court decision, ruling that federal antitrust law does not require compensating student-athletes beyond the full cost of attending college.

The Appellate Court supported the district court’s finding that the NCAA’s rules served the procompetitive purposes of integrating academics with athletics and preserving the popularity of the NCAA’s product by promoting its current understanding of amateurism. The decision said:

“Both we and the district court agree that the NCAA’s amateurism rule has procompetitive benefits. But in finding that paying students cash compensation would promote amateurism as effectively as not paying them, the district court ignored that not paying student-athletes is precisely what makes them amateurs.
9th Circuit Court of Appeals Ruling, O’Bannon v. NCAA, September 2015

As such, the appellate court rejected the portion of the district court ruling that would have allowed student-athletes to be paid up to $5,000 per year of eligibility for use of their name, image and likeness in annual deferred cash compensation. The appellate court further noted:

“The difference between offering student-athletes education-related compensation and offering them cash sums untethered to educational expenses is not minor; it is a quantum leap.
 9th Circuit Court of Appeals Ruling, O’Bannon v. NCAA, September 2015

“In light of that, the meager evidence in the record, and the Supreme Court’s admonition that we must afford the NCAA ‘ample latitude’ to superintend college athletics, Bd. of Regents, 468 U.S. at 120, we think it is clear the district court erred in concluding that small payments in deferred compensation are a substantially less restrictive alternative restraint.”
9th Circuit Court of Appeals Ruling, O’Bannon v. NCAA, September 2015

“Today, we reaffirm that NCAA regulations are subject to antitrust scrutiny and must be tested in the crucible of the Rule of Reason … The Rule of Reason requires that the NCAA permit its schools to provide up to the cost of attendance to their student-athletes. It does not require more.
9th Circuit Court of Appeals Ruling, O’Bannon v. NCAA, September 2015

 

The Supreme Court Proceedings

In October 2016, the U.S. Supreme Court denied requests by both the plaintiffs and the NCAA to review the 9th Circuit Court’s decision.

 

Grant-In-Aid Cap Litigation

In 2014, as the O'Bannon v. NCAAlitigation was making its way through the appeals process, class-action litigation challenging the NCAA rules was consolidated before Judge Wilken in the U.S. District Court Oakland, California.

This lawsuit challenged rules adopted by the NCAA and athletics conferences that govern the kind of aid that can be provided to student-athletes.

The NCAA sought to dismiss the case in September 2014. However, Judge Wilken — who also presided over the O’Bannoncase— denied the motion, saying that the current case involves different student-athletes (not just male basketball and football players, but female basketball players), and seeks different remedies (not just injunctive relief, but damages, too) that were not addressed in O’Bannon.

Then, in the fall of 2017, both the NCAA and plaintiffs submitted motions seeking summary judgment. The NCAA argued that the O’Bannonruling precludes student-athletes from their claims against the NCAA, because the Court of Appeals already had determined that the rules have procompetitive benefits and that any compensation could appropriately be limited to the cost of attendance. In March 2018, Judge Wilken decided to let the case proceed, writing that while the NCAA demonstrated procompetitive benefits of amateurism, the plaintiffs have put forth sufficient evidence related to less restrictive alternatives. As the court stated:

Defendants have presented sufficient evidence in support of the two procompetitive effects found in O’Bannon to create a factual issue for trial. This includes a survey of consumer preferences, which led Defendants’ expert Dr. Bruce Isaacson to conclude that fans are drawn to college football and basketball in part due to their perception of amateurism.

Defendants also present evidence that paying student-athletes would detract from the integration of academics and athletics in the campus community. For example, Professor James T. Heckman testified that paying student-athletes would likely lead them to dedicate even more effort and possibly more time to their sports, potentially diverting them ‘away from actually being students and towards just being athletes.’”
Judge Claudia Wilken’s Order Granting in Part And Denying in Part Cross-Motions for Summary Judgment, In re: National Collegiate Athletic Association Athletic Grant-In-Aid Cap Antitrust Litigation, March 2018