On Dec. 16, 2020, the United States Supreme Court granted certiorari and agreed to review two Ninth Circuit decisions affirming that the National Collegiate Athletic Association’s (NCAA) and several collegiate athletic conferences’ rules regarding compensation paid to college athletes violates Section 1 of the Sherman Act. NCAA v. Shawne Alston, et al., No. 20-512 (S.Ct. Dec. 16, 2020). With the NCAA set to finalize its rules regarding name, image and likeness rights for student-athletes in January 2021, the upcoming Supreme Court review reinforces the uncertainty for industry stakeholders surrounding potential compensation for student-athletes. The NCAA and collegiate athletic conferences have argued that amateurism remains the defining characteristic of college athletics, but the struggle remains for colleges and universities to maintain a commitment to amateurism while staying on the right side of the antitrust laws, which prohibit coordinated efforts to fix costs.
The cases arrived at the Supreme Court after the Ninth Circuit Court of Appeals affirmed Judge Claudia Wilken’s district court judgment following a bench trial, which invalidated limits on education-related compensation for college students. When analyzing agreements involving league sports within the antitrust context, a court must determine whether the restriction is unreasonable under the “Rule of Reason.”[1] Within this context, the Rule of Reason requires a three-step analysis: “(1) Student-Athletes bear the initial burden of showing that the restraint produces significant anticompetitive effects within a relevant market; (2) if they carry that burden, the NCAA must come forward with evidence of the restraint’s procompetitive effects; and (3) Student-Athletes must then show that any legitimate objectives can be achieved in a substantially...
