Are Colleges Going to Pay Their Athletes?
Is the NCAA headed for extinction?
For years, the collegiate sports governing body has endured criticism for overseeing an unjust system. Detractors say the NCAA and its member schools exploit college athletes, using them as a source of free labor. The NCAA responds by saying that paying athletes runs counter to its ideals of amateurism.
But the walls are closing in.
The first big movement occurred in 2021, when the U.S. Supreme Court ruled, in NCAA v. Alston, that the NCAA rule prohibiting student-athletes from receiving academic benefits violated antitrust law. While that unanimous decision concerned only payments and other benefits related to education, it also suggested that the court may be open to a more serious challenge. In apparent response, the NCAA then decided on its own to allow student-athletes to receive compensation in exchange for the use of their “name, image, or likeness.”
Thousands of athletes, many of them influenced by alumni booster groups and marketers, have landed NIL deals — and some of them are lucrative.
Some schools also now offer modest bonuses to athletes for academic achievement. In its Alston decision, the Supreme Court upheld a lower court ruling that schools may provide those, and some did. Other than the optional “Alston bonuses,” however, schools are still not required to pay their athletes a nickel.
But that might change.
A case called Johnson v. NCAA raises the question of whether the athletes are employees of the school and the NCAA as joint employers. The plaintiffs, several former football players at Villanova, argue that under the federal Fair Labor Standards Act, they should have received at least a minimum hourly wage plus overtime for the hours they spent practicing and competing. They said they are no different than students who take tickets or sell hot dogs at their events.
The case is in the U.S. Court of Appeals for the Third Circuit, which held a hearing on Feb. 15, and media accounts strongly suggest that the plaintiffs’ argument resonated with the three-judge panel.
When NCAA lawyer Steven Katz argued that paying student-athletes would “create a minefield of unforeseen consequences,” Judge Theodore McKee wasn’t convinced of the gravity.
“If the athletes win, it would clearly create some real issues,” he said. “That doesn’t mean they’re wrong; it just means that built into what we have today — in this modern universe of a billion-dollar college sports activity — there are some real problems.”
“I don’t know how these folks are not employees,” he told Katz.
A Shifting Legal Landscape
The Feb. 15 hearing was part of an interlocutory appeal — an appeal filed in the middle of a case to address a specific issue. The NCAA asked U.S. District Judge John Padova to dismiss the lawsuit because two other circuit courts had determined that playing college sports doesn’t qualify as work. Padova declined that request, and the NCAA appealed in an effort to stop the case from proceeding. That was the purpose of the Third Circuit hearing.
The two rulings cited by the NCAA as precedents for prohibiting student-athlete pay occurred in 2019 and 2016, in the Ninth Circuit and Seventh Circuit. But, in large part due to the Supreme Court’s 2021 Alston decision, the legal landscape for paying college athletes has significantly shifted.
Meanwhile, other cases seeking pay for college athletes are also progressing. Two groups are using a different avenue, the National Labor Relations Board, and one of them took a big step forward in December in claiming that the NCAA, the Pac-12 Conference, and the University of Southern California are engaging in unfair labor practices.
Plaintiffs in another case, House v. NCAA, are seeking monetary damages for being denied NIL opportunities prior to 2021.
But Johnson v. NCAA is the furthest along and may have the most impact.
Looking to the Future
If the NCAA loses in the Third Circuit, they could appeal to the U.S. Supreme Court. If so, there’s a good chance the court will take it because it would mean the districts are split on the issue.
If it does go to the Supreme Court, however, the NCAA has got to be nervous about its chances. Keep in mind that the justices were unanimous in ruling against the NCAA the last time they looked at the issue of paying athletes. In particular, Justice Brett M. Kavanaugh seems to harbor a strong dislike for the NCAA. His blistering and expansive concurring opinion in Alston took the NCAA to task for the way it operates.
“Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate,” Kavanaugh wrote. “And under ordinary principles of antitrust law, it is not evident why college sports should be any different.”
“The NCAA is not above the law.”
Expect a decision in Johnson v. NCAA in a few months.
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