NCAA athletes could now receive more compensation, but with limits

A federal court ruled on Friday that the association could not cap the education-related scholarship packages that schools offer students.

On Friday, the system that prevents college athletes from being compensated for their labor (beyond the scholarships that some receive) cracked open, just a little bit.

A federal judge in California ruled that the NCAA’s rules on compensation violate antitrust laws and must be slightly expanded. Per the Alston v. NCAA ruling, the association can no longer cap the scholarships colleges offer student athletes, paving the way for schools to begin offering larger education-related packages. That doesn’t mean colleges are allowed — let alone encouraged — to pay traditional salaries.

The status quo, as Julie Bogen explained for Vox, is that players get nothing while schools make a killing off of them — even as some student-athletes, particularly those from low-income backgrounds, can struggle to make ends meet:

At present, many students are offered scholarships but not paid beyond that scholarship, nor do they have the time to hold on-campus employment. … Complicating the debate: Black students make up more than half of Division 1 basketball players, and the policy that they shouldn’t be paid is supported by mostly white people.

Furthermore, because many of these students come from precarious financial situations at home, they don’t have the luxury of boycotting or going on strike. They have to watch as the NCAA makes billions from their performance — in ticket sales, merchandise, and more — while they (if they’re following the NCAA-dictated rules) never see a cent.

Only about two dozen college athletics programs are actually profitable (but the ones that are bring in profit margins in the millions). Some people, like former basketball player Cody J. McDavis, worry that allowing colleges to pay would create an expensive arms race for the top recruits that would cut smaller programs — and less profitable sports — out of the competition.

The ruling in Alston v. NCAA is not the dramatic pay-for-play precedent the plaintiffs were hoping for, but it could have major effects on college sports. It says that the NCAA must allow colleges to offer students education-related items like “computers, science equipment, musical instruments and other tangible items not included in the cost of attendance calculation but nonetheless related to the pursuit of academic studies” on top of their scholarship packages – but they still can’t pay for things outside of the academic sphere.

The NCAA insists that its athletes are, fundamentally, amateurs, and should not be paid. In the organization’s statement on the case, its chief legal officer Donald Remy said “The decision acknowledges that the popularity of college sports stems in part from the fact that these athletes are indeed students, who must not be paid unlimited cash sums unrelated to education.”

And it does, to a point: US District Judge Claudia Wilken said that the NCAA can continue to regulate benefits that aren’t linked to attending school. But she wrote that its “amateurism” argument is fundamentally flawed, as Law360 reported, and that the NCAA has not successfully defined what an amateur is. She also dismissed their defense that not paying athletes helps them better integrate into campus, noting that wealth disparities are already found at colleges across the nation.

She found “that the defendants agreed to and did restrain trade in the relevant market” and that the NCAA’s caps on scholarships “produced significant anticompetitive effects.” In 2014, Wilken issued a similar ruling on O’Bannon v. NCAA, another class-action antitrust lawsuit alleging the NCAA should pay to use former students’ images, though much of her remedy was overturned on appeal.

Whether the latest case will hold up on appeal remains to be seen. As does the extent to which it might change things: The ruling doesn’t force conferences and colleges to change their compensation or scholarship packages — it just says the NCAA can’t stop them.