JOSHUA MANDEL—In the words of Professor Michael McCann: “[a]mateurism in college sports may be on life support, but it’s not dead yet.” The NCAA’s business model is predicated upon requiring its student-athletes to retain amateur status. As of 2015, NCAA Division I member-universities can offer financial aid to student-athletes that would cover tuition and fees, room and board, textbooks, transportation, and miscellaneous personal expenses. Any other financial aid offered to or accepted by student-athletes is strictly forbidden and may violate the NCAA’s amateurism rules.
Critics of the NCAA’s amateurism rules have argued for a fairer system, where Division I football and basketball players would receive a share of the profits earned from their skills, images, names, and likenesses. The Supreme Court recently denied petitions in O’Bannon v. NCAA—a case involving the issue of whether NCAA Division I student-athletes may be paid for the commercial use of their images, names, and likenesses. Given the Supreme Court’s petition denial in O’Bannon, and because the NCAA is routinely involved in similar litigation, this article provides an overview and analysis of the current status of amateurism in the NCAA.
A number of high-profile NCAA Division I student-athletes have been penalized for violations of the NCAA’s amateurism rules, such as Todd Gurley, a former University of Georgia running back, who was suspended for four games after receiving $400 for roughly 80 autographs. Likewise, Terrelle Pryor, a former Ohio State University quarterback, was suspended for five games for selling championship rings and memorabilia, and for accepting free tattoos.
The list of penalties is far-reaching, seemingly endless, and not limited to student-athletes. In the 1980s, Southern Methodist University faced the most controversial NCAA penalty to date—a suspension of its football program, otherwise known as the “death penalty”—because its football players received significant financial assistance from wealthy program boosters. Recently, the University of Miami football program also faced penalties after one of its well-known boosters, Nevin Shapiro, was found to have paid football players under the table from 2002 to 2010.
A number of high-profile NCAA Division I football and basketball players have criticized the effect of the NCAA’s amateurism rules. In an interview before Super Bowl 49, Seattle Seahawks cornerback and Stanford graduate, Richard Sherman, explained his financial struggle as a student-athlete:
I had negative 40 bucks in my account and usually my account was in the negative more times than it was in the positive. You [have to] make the decisions on whether you get gas for your car or whether you get a meal for the day—you got one of the two choices. And people think ‘oh, you’re on scholarship.’ [The universities] pay for your room and board, they pay for your education, but to [the university’s] knowledge, you’re there to play football—you’re not on scholarship for school . . . These are the things that coaches tell you everyday . . . and, luckily, I was blessed to go to Stanford, a school that was primarily focused on academics.
In 2014, Shabazz Napier, a former University of Connecticut basketball player, painted a picture similar to Mr. Sherman’s. In the documentary Schooled: The Price of College Sports, former University of Tennessee running back, Arian Foster, narrated his financial struggle as a student-athlete despite his celebrity status.
The frustrating paradox—that the NCAA and its member-universities may profit from the skilled labor of their amateur student-athletes while the student-athletes see no piece of that profit—has led to litigation challenging the NCAA’s amateurism rules. For example, in the 1984 case of NCAA v. Board of Regents of the University of Oklahoma, the Supreme Court established that the NCAA’s complete control of the frequency of televised football games was an unreasonable restraint of trade in violation of federal antitrust law. Similarly, in 2008, several male NCAA Division I football and basketball players settled with the NCAA for a sum of ten million dollars after bringing a class action lawsuit. The class alleged that the NCAA violated federal antitrust law when it prohibited universities from covering supplies, laundry expenses, health insurance, travel costs, and incidental expenses, which could amount to approximately $2,500.
In September 2013, after a movement led by former Northwestern University quarterback Kain Colter, the Chicago NLRB District ruled that Northwestern football players—and potentially by implication, all NCAA Division I student-athletes attending private institutions—could unionize because of their status as university employees. Such a ruling would have granted the union members negotiation rights regarding scholarships, financial aid, and living situations, effectively invalidating the NCAA’s amateurism rules. However, the District decision was overturned on appeal and Mr. Colter has not appealed the ruling since.
O’Bannon v. NCAA
In 2009, the O’Bannon plaintiffs, a certified class including former prominent NCAA Division I basketball players Ed O’Bannon, Oscar Robertson, and Bill Russell, sued both the NCAA and Electronic Arts Sports (“EA Sports”), alleging that that the latter conspired to profit from the commercial use of former NCAA student-athletes’ images, names, and likenesses. In discovery, e-mails between the NCAA and EA Sports and a deposition of a former EA Sports employee disclosed that EA Sports deliberately designed its video game characters and avatars to imitate real NCAA student-athletes. EA Sports eventually settled for 60 million dollars. The average player payout was $1,600.
Senior District Judge Claudia Wilken for the Northern District of California ruled in favor of the plaintiffs, holding that the NCAA violated antitrust laws by restricting compensation of student-athletes for the commercial use of their names, images, and likenesses. Judge Wilken explained that universities would be allowed to set aside a portion of their revenues from the use of student-athletes’ images, names, and likenesses into a trust fund, which would be available to football players in specific Division I conferences and to all Division I basketball players upon graduation. While the ruling did not require that universities compensate their student-athletes, it did grant universities the opportunity to offer competitive trust fund packages to their student-athletes and recruits. Judge Wilken clarified that the NCAA was free to cap the trust fund amount at $5,000 per year, per athlete.
The United States Court of Appeals for the Ninth Circuit affirmed Judge Wilken’s ruling that the NCAA’s amateurism rules violate federal antitrust law, but limited the remedy. Judge Bybee, writing for the majority, disagreed with the notion that NCAA Division I student-athletes could be paid up to $5,000 per year for their images, names, and likenesses because such payment would effectively classify them as professional athletes. In response, Judge Bybee limited the amount of compensation to the total cost of attendance, which, by implication, reinforced the NCAA’s amateurism rules. O’Bannon and the NCAA petitioned the Supreme Court to review the Ninth Circuit’s ruling, however, the petitions were denied.
Jenkins v. NCAA
The NCAA still has to face its toughest and potentially most devastating challenge—Jenkins v. NCAA. Jeffrey Kessler, a renowned New York antitrust litigator, represents the class of plaintiffs, alleging that the NCAA’s business model is that of an “unlawful cartel,” as it profits from, but does not compensate for, the commercial use of its student-athletes in violation of federal antitrust law. If the Jenkins plaintiffs prevail, the NCAA would lose its control over scholarship limits. In other words, universities would act as employers, offering money and luxuries to their student-athlete employees in an open and competitive market.
Interestingly, Judge Wilken is the presiding judge in Jenkins. If Judge Wilken rules in favor of the plaintiffs, as she did in O’Bannon, the plaintiffs will likely face two inevitable challenges: first, the Court of Appeals for the Ninth Circuit may limit Judge Wilken’s ruling in the same way it limited the remedy in O’Bannon; second, the Supreme Court is unlikely to hear the matter, unless the Ninth Circuit creates a split amongst O’Bannon and Jenkins.
Jenkins also presents a potential procedural dilemma. Jenkins, like O’Bannon, was filed in the Ninth Circuit. A circuit split would have been much more likely to influence the Supreme Court to grant certiorari, hopefully settling the controversy. Only time will tell if Mr. Kessler’s approach will prove successful. Although Professor McCann correctly described amateurism in the NCAA as being on life support, amateurism will surely be dead and buried if the Jenkins plaintiffs prevail.