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Athletes Challenge NCAA Limits on Compensation Former athletes in Division I men’s and women’s basketball and top-

division football are seeking to end a cap on what they may receive for

participating in college sports Sept. 4, 2018 11:46 a.m. ET

https://www.wsj.com/articles/athletes-challenge-ncaa-limits-on-compensation-1536075964?mod=hp_lead_pos10

College athletes mounted their latest and strongest charge against the idea that they

are amateurs as they began a court challenge on Tuesday of the NCAA’s power to

limit their compensation in a multibillion-dollar industry.

Former athletes in Division I men’s and women’s basketball and top-division

football are seeking to end the NCAA’s cap on what they may receive for

participating in college sports: generally, little more than tuition, room and board.

The plaintiffs in “In Re: National Collegiate Athletic Association Athletic Grant-in-Aid

Cap Antitrust Litigation” say the NCAA’s rules violate U.S. antitrust laws by

artificially depressing athletes’ compensation. Previous litigation by athletes sought

to stop the NCAA from profiting from their name, image or likeness without sharing

the proceeds, but in this case they’re seeking to change the basic relationship

between college sports leaders and participants.

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The NCAA says compensation limits are necessary to maintain the distinction

between college and professional sports, and that letting schools pay athletes

unlimited sums would erode college sports’ appeal to the public. NCAA officials say

athletic scholarships and the chance to earn a college degree—in many cases worth

a few hundred thousand dollars—are ample compensation for what they say is an

amateur pursuit.

“What sets college sports apart is that the competitors are students and not paid

professionals,” NCAA lawyers wrote in their prepared opening remarks, released

ahead of Tuesday’s trial start. They warn that a “competition between athletes

recruited and paid based on the value of their performance, on one hand, and

athletes who compete just as part of their student experience and a way to maintain

it, would readily degenerate into an uninteresting and potentially dangerous

mismatch.”

The class-action case will be decided in a bench trial in U.S. District Court for the

Northern District of California in Oakland, and is expected to last several weeks. A

ruling is expected weeks or months later.

College sports’ annual revenues have skyrocketed in recent decades, boosted by

escalating fees paid by TV networks to broadcast games. The NCAA earned more

than $1 billion in revenue last year, mostly from the men’s basketball tournament.

Its associated athletic conferences together earned billions more, largely through

broadcast-rights fees for football games.

In their prepared opening remarks, plaintiffs’ lawyers wrote that “the schools

compete against one another without limitation to attract top coaches and trainers

and administrators, to construct the largest stadia and the most lavish suites, and to

secure the most lucrative broadcast and sponsorship and licensing agreements. In

the multibillion-dollar business of D-I basketball and FBS football, competition is

stifled only—and entirely—when it comes to compensating athletes for their

services.”

The current case will be decided by Judge Claudia Wilken, who four years ago ruled

for NCAA athletes in a similar but more limited antitrust case. That case, headlined

by former UCLA basketball star Ed O’Bannon, was sparked by an NCAA-licensed

videogame that featured animated likenesses that mimicked actual college athletes

without compensating the players.

The NCAA says compensation limits are necessary to maintain the distinction between college and

professional sports. PHOTO: SAM CRAFT/ASSOCIATED PRESS

Wilken’s ruling in O’Bannon resulted in schools being allowed to award the full cost

of college attendance to athletes. Some schools began giving athletes stipends,

generally worth a few thousand dollars, above their scholarships to pay expenses

that scholarships didn’t cover, such as laundry or transportation.

The O’Bannon case set a precedent favorable to future plaintiffs in that it ruled that

the NCAA violated antitrust laws. Yet the decision also largely preserved the current

college-sports model so the NCAA also claims it as a kind of victory.

“As was demonstrated in the O’Bannon case, the NCAA will show that our rules are

essential to providing educational opportunities to hundreds of thousands of

student-athletes across the country,” Donald Remy, chief legal officer of the NCAA,

said in a statement last week. “Allowing paid professionals to replace student-

athletes on college campuses would change the face of college sports as we know it.”

Skeptics—or realists—point out that a shadow market already exists for college

athletes’ services. A criminal case working its way through U.S. federal court alleges

that shoe-company representatives and others connected to college sports arranged

kickbacks and bribes to induce high school recruits to sign with certain schools.

A win by the plaintiffs in this case could bring bidding for players into the light.