High Court Sides With Ex-Athletes In NCAA Compensation Case

Speaker 1: 00:00 The days of nationwide limits on the educational benefits offered to college athletes are over the U S Supreme court has sided with the athletes over the NCAA in a unanimous ruling. The court ruled that the agreement among schools to limit the benefits they extend to student athletes amounts to price fixing, and a violation of antitrust laws. California has already taken on the issue of compensation for student athletes, with a state fair pay to play law. And my guest Lynn Simon helped craft that legislation. Len Simon is an attorney and an adjunct law professor at USD specializing in sports and law. And Lynn, welcome to the program. Speaker 2: 00:43 Thank you very much for having me. Speaker 1: 00:45 This case was specifically about the educational benefits offered to student athletes. What are those benefits? Can you give us an example? Speaker 2: 00:54 The case is about something small, but it's also about something big, which is the MTAs power. So on the small side, I would say the educational benefits could be providing tuition for the student to come back and finish his education. After his athletic eligibility was over, it could be for traveling to a foreign country during his four years on campus. It could be awards for high educational attainment that were available only to athletes. So it's little goodies here and there that schools are not permitted to provide athletes right now because the NCAA is very, very, very strict in what you can give an athlete. Um, the theory that people will somehow cheat and get the best athletes that way Supreme court was not excited about that position by the NCA. Speaker 1: 01:37 Does this ruling apply to any sort of licensing agreements for the athletes Speaker 2: 01:42 Not directly, but it's a, it's a sign in the, in the direction of the athletes having licensing rights and other rights, easiest way to understand this case, really Maureen, it was that it was an opportunity for the NCA to have a big win and to trim back all of this pressure, to provide licensing rights and provide salaries and provide other things. And the NCAA had high hopes at the beginning, they were going to have a very large victory and walk away with a big prize and they got just the opposite. They got a loss and they got no benefit out of it at all. And the door is open for the lower courts to decide how far the courts can go in forcing the MTA to give benefits. Speaker 1: 02:24 How does this ruling differ from California's fair pay to play Speaker 2: 02:28 Law? It's very different because it's national in scope in California's is only about California. And it's broad in theory, it's about all kinds of benefits, uh, rather than being only about licensing benefits. Uh, but also it's, it's a different source of power. Uh, the California law is a decision by the California legislature to tell California schools how to treat their students and legislatures can do that. Congress can do that as well as yet, but it could, the courts enforce laws that are already such as the antitrust laws. And so this case, as you said earlier, it says, this is an illegal price fix. It is no more proper for USC, UCLA, Berkeley, and Stanford, to agree how much athletes can get in the way of benefits than it is for Walmart and Kmart to decide how much they're going to pay their employees in salaries or fringe benefits. It's illegal, it's a conspiracy. So you're really different sources of power, both giving the students something that they want. Speaker 1: 03:32 As you say, the NCAA might have been expecting a big win here. What was their argument in defending these nationwide standards in limiting benefits to players? Speaker 2: 03:43 They have two arguments. Really one is that it's reasonable under the antitrust laws. You can agree with your competitors to do things. If you can convince the courts that they are good for society, good for the world, and even more important, good for competition, they create more competition. So the NCAA argue that this creates better competition on the field and on the courts because the schools are more even, but of course they're not working very well. We have the same powerhouses in football and basketball every year. It's really a rejection of the NCA's core argument that this is good. The other argument the NCA made was we are entitled to define our product. You know, the little league says it's for little kids up to 12, and they're entitled to have a league with kids up to 12. The NCAA said we are insightful to have sports for amateurs and amateurs don't make any money. And the NCA that the Supreme court flatly rejected, the argument that you could define your product and thereby not compensate people that they mocked it. They said that that would be like letting, uh, retail stores say we're defining our product as a product created by underpaid workers and therefore we can under pair workers. So when your arguments are mocked by the Supreme court, you've had a bad day in court. Speaker 1: 04:58 Well, practically speaking though, what does this ruling allow NCAA athletes to do now that they couldn't do before? Speaker 2: 05:05 It allows them to ask their universities, to provide them benefits beyond tuition board room books, all the usual basic athletic scholarship items and to provide them almost anything else they can ask. They don't have to give it to them. It's an antitrust case. So what it really means is let competition bloom. If UCLA wants to provide those benefits to its student athletes and USC, doesn't, they're both in the clear under the law because what the law prohibits is them agreeing not to do it again, price fixing. Speaker 1: 05:38 Let me ask you, how do you see today's ruling affecting the world of college athletics? Speaker 2: 05:44 Well, it takes away a big tool from the NCAA. They have fought hard against all kinds of benefits for student athletes beyond pure scholarships on the basis that they were running amateur sports and amateur sports did not permit of that. You know, there's a consideration now of the licensing issue that you mentioned of just letting it go, let the athletes make as much money on the side as they can make and just leave it alone and forget about it. Just like we don't worry about whether our music majors or art majors in college are making money on the side. It's not a concern of the university. It's a private deal the students are making. So that may start to happen quite soon. Speaker 1: 06:19 I've been speaking with Lynn Simon, an attorney, an adjunct law professor at the university of San Diego and Len, thank you so much for speaking with us. You're very welcome.