College Athletes Can Now Receive Compensation: NCAA v. Alston

The debate on whether college athletes should receive monetary compensation has raged for some time. A class action, comprised of current and former collegiate student-athletes, was filed against the National Collegiate Athletic Association (“NCAA”) among other organizations. See In re Nat’l Collegiate Athletic Ass’n, 375 F. Supp. 3d 1058 (N.D. Cal. 2019). The student-athletes primarily argued that the NCAA’s restriction on collegiate athlete compensation violated Section One of the Sherman Act, an antitrust law, by restraining trade and commerce. The NCAA countered that, among other things, promoting competitive equity and maintaining the distinction between professional and amateur sports justified the restrictions on student-athlete compensation.

On June 21, 2021, the Supreme Court of the United States unanimously decided to lift the restriction on athlete compensation imposed by the NCAA. See Nat’l Collegiate Athletic Ass’n v. Alston, 141 S. Ct. 2141 (2021). In reaching its decision, the Supreme Court discussed the origin and history of the NCAA and its student-athletes. See NCAA v. Alston, 594 S. Ct. ____ (2021). The Court largely agreed with the lower court, which found that the NCAA violated antitrust laws (which generally prohibit restraints on commerce and competition) by restricting certain compensation for collegiate athletes. Id.

What does this mean for college athletes moving forward? The Supreme Court’s decision in NCAA v. Alston does not necessarily mean that college athletes will begin receiving a salary for their participation in college sports. Rather, it merely means that the NCAA cannot limit or restrict the financial or educational benefits given to college athletes, such as scholarships, campus housing, stipends, and other funded educational programming. The decision may have a significant impact on the recruiting of college athletes by allowing schools with large budgets to offer more financial benefits as an incentive while other schools with fewer resources may not be able to compete, leading to the best teams being the ones with the most money. Additionally, many speculate as Justice Kavanaugh did in his concurrence, that this decision will open the door for future litigation regarding collegiate athlete compensation. Id. (Kavanaugh, J., concurring).

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.