News 16th April 2021

US Supreme Court set for June ruling on ‘benefits’ for student athletes

A ruling from the US Supreme Court on whether Universities can offer benefits to National Collegiate Athletic Association (NCAA) Division One athletes that extend beyond covering the cost of tuition is expected in June. Under current NCAA rules, US Universities are allowed to offer student athletes a scholarship to cover the cost of tuition fees, but are barred from offering any additional benefits. Challenges to the NCAA rules filed by Division I Football Bowl Subdivision (FBS) players and Division 1 Basketball players have been consolidated into a Class Action lawsuit, and the Supreme Court heard arguments on 31 March. 

The Class Action alleges that the NCAA rules regarding athlete compensation are a violation of US Antitrust law, which is designed to outlaw practices that restrict fair competition. The Supreme Court’s June decision is expected to be the first step towards fair compensation for US student athletes, who are currently regarded as amateurs by the NCAA, despite the financial success of its top competitions. 

“The revenue generated by basketball and football in these top divisions is greater than the MLB and the NBA combined”, said Jeff Kessler, who filed the Class Action back in 2014. “Only the NFL is greater”. 

Attendances at College football games regularly top 100,000 and on 20 February 2019, ticket prices for the Duke vs. North Carolina NCAA basketball game are understood to have topped US$4,000 – more than for the National Football League’s (NFL) Super Bowl. The popularity of College Sport makes the NCAA one of the richest sporting organisations in the world. Its 2018/19 accounts revealed revenue of US$1.12 billion, outstripping expenses of $1 billion. 

In May last year, the US Court of Appeals for the 9th Circuit upheld a March 2019 injunction banning the NCAA from preventing Universities from offering education-related benefits such as computers, science equipment, postgraduate scholarships, overseas study programmes and more to Division 1 student athletes. It agreed with the Class Action’s claim that such caps violate Antitrust law.

“The US Supreme Court took the case on”, explained Kessler. “I think that they wanted to say something about this. The NCAA argued that they are not subject to Antitrust rules. We asked the Supreme Court to resolve this. We are expecting a ruling in June.”

Every year, the NCAA distributes $3.5 billion in athletic scholarships to over 180,000 student athletes each year – an average of $19,444 per student, if scholarships were distributed evenly. But they are not. 

Lauren Rice…

There are three College Sport Divisions. Division One institutions are able to offer athletically-gifted students large scholarships to study at their University. Division Two institutions offer smaller scholarships, and Division Three institutions are not able to offer scholarships. This system can cause problems when athletes who receive a Division One scholarship are forced to move to a University that competes in a lower Division, as Lauren Rice discovered.

In 2019, the NCAA changed its policies to allow student athletes to be compensated for use of their image, after California proposed an Act dubbed ‘Fair Pay to Play’. This law is scheduled to come into effect in 2023 and alongside Kessler’s Class Action, is expected to ensure that student athletes receive fair compensation.

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