Why NCAA Only Lost On Paper, But Is The Big Winner In College Compensation Case
Late Friday, a federal court in California released a 104-page ruling in the case of Alston v. NCAA that has some effect on college sports, but not the full effect that the plaintiffs were seeking. The court, through Judge Claudia Wilken, ruled that the NCAA is no longer permitted to put a hard limit on compensation or benefits related to education for Division I men’s and women’s football and basketball athletes.
Can Judge Wilken’s Ruling be considered a win for college athletes?
To an extent, college athletes won a minor victory against the NCAA. It is not entirely clear as to what constitutes “education-related benefits,” and it is possible that college athletes seek to extend the definition as far as possible to receive maximized benefits under the ruling.
It should open the door to college athletes being able to receive cash or cash-equivalent awards for strong academic performances and graduating from school. The NCAA may still be able to limit such compensation, but not “less than the maximum amount of compensation that an individual could receive in an academic school year in participation, championship, or other special achievement awards (combined).”
Additionally, college athletes will be happy with some of the dicta contained in Judge Wilken’s ruling, such as:
The Court finds and concludes that Defendants agreed to and did restrain trade in the relevant market, affecting interstate commerce, and that the challenged limits on student-athlete compensation produce significant anticompetitive effects.
Another statement for college athletes to be content with is:
A reading of NCAA bylaws discloses no principled, articulable difference between amateurism and not amateurism, or ‘pay for play’ and ‘not pay for play.’
Those statements could be used either on appeal, or by another class of plaintiffs, in an effort to extent the ruling to benefit college athletes beyond education-related benefits to something more akin to compensation for on-field performance and/or an ability to exploit one’s publicity rights (name, image and likeness).
Can the NCAA chalk Judge Wilken’s ruling up as a win?
The NCAA’s biggest fear was undoubtedly that Judge Wilken would rule that any restriction on college athletes earning money is an antitrust violation and therefore prohibited. That is not how Judge Wilken ruled, instead choosing to distinguish between professional and amateur competitions and keeping the crux of the current system in place.
Judge Wilken wrote,
[T]he distinction between college and professional sports arises because student-athletes do not receive unlimited payments unrelated to education, akin to salaries seen in professional sports leagues.
This key sentence supports the NCAA’s limitation on money available to college athletes that is unrelated to education. It is a reason why the athletes may wish to appeal the decision if the NCAA does not invoke its own right to appeal, and why I believe that the decision, overall, was a bigger win for the NCAA than college athletes.
Judge Wilken’s decision certainly did not “completely upset the apple cart,” as University of Wisconsin Chancellor Rebecca Blank had feared, through her testimony at trial.
Who clearly won based on Judge Wilken’s ruling?
As is often the case, the lawyers are thus far the big winners. NCAA lawyers were undoubtedly compensated heavily for their defense in the lawsuit. That compensation will only grow as an appeal is likely to follow the ruling.
Additionally, while the plaintiffs may have only received a small victory related to educational benefits, their lawyers are looking at very large attorney’s fees. Those fees could be tabled as an appeal is processed and pending.
If there is no appeal, or if the plaintiffs prevail on appeal, then their lawyers could already be looking at millions of dollars in attorney’s fees. Judge Wilken ruled that the NCAA will be required to pay those fees, determining that the college athletes are the prevailing party in the litigation.
What is up next?
Both the NCAA and the college athletes that sued the NCAA will have the opportunity to appeal Judge Wilken’s order. If there is no appeal, then the ruling will go into effect ninety days from the date of her ruling.
It is very likely that the NCAA appeals the decision, because of fear that Judge Wilken’s ruling could be extended in the future and/or to eradicate the attorney’s fees award presented to lawyers for the plaintiffs.
