A Victory for College Athletes; Supreme Court Rules Against NCAA in Compensation Case
Updated: Jun 22, 2021
Today, a major victory occurred for student-athletes, in a unanimous ruling, the U.S. Supreme Court has determined that regulations restricting compensation for student-athletes violate U.S. antitrust law.
The issue at hand, reviewed by the SCOTUS reviewed NCAA rules limiting educational benefits for student-athletes. While the case did not determine whether athletes can be paid salaries, the ruling will allow for schools to offer athletes education-related benefits including computers, graduate scholarships, tutoring, opportunities to study abroad, and internships.
The NCAA’s counter against violation of antitrust laws included the preservation of amateurism in college sports.
Both the Biden Administration and major sports leagues including the NFL, NBA, and WNBA urged the SCOTUS to side with athletes in this hearing.
The Significance of the Ruling
This ruling is a crucial moment for athletes in the fight for compensation for participation in their respective sports. College athletics currently raise billions of dollars from television contracts, ticket sales, and merchandising, all on the backs of the athletes, leading many to believe athletes are being exploited in the monetization of their talents.
It was reported by Forbes in 2020 that top Division 1 schools earn approximately $8.5 billion annually, with 58% of the revenue stemming directly from football and men’s basketball programs.
Compensation and Name, Image & Likeness
While the recent ruling does not directly address compensation and NIL (Name, Image, and Likeness) for athletes, Congress is conducting hearings about the matter. Florida Senator Marco Rubio is spearheading the “Fairness in Collegiate Athletics Act”, calling for the NCAA to implement compensation by third parties for athletes’ names, images, and likenesses.
Progress with NIL in college athletics would be momentous for the world of amateur sports, giving athletes a slice of the earnings that they’re significantly contributing to. While a methodology is still unclear in estimating what student-athletes can earn from their NIL, it might be assumed that athletes can be compensated on popularity.
Ultimately, the value of Name, Image, and Likeness of an athlete derives from the effort focused on their personal brand, leveraging the power of tools including social media.
Athletic Director U took a deep dive into just how much NIL is worth to student-athletes, estimating some of the top college athletes being worth close to half a million dollars in endorsement potential.
With the new ruling from the Supreme Court, college athletics is entering a new frontier, one that could prove extremely beneficial, and profitable for college athletes. It stresses the value for athletes across all sports to begin considering their own NIL and how they can leverage it to benefit themselves and their personal brand for the long run.
As progress is still being made on athlete compensation, here are several dates to keep an eye on this summer relating to the matter. (Via ESPN.com)
June 22-23: The NCAA's Division I Council is scheduled to meet to discuss multiple options for changing the association's rules that govern NIL activity.
June 28: The Division I Council has reserved another day to meet and is most likely to reach a decision on if and how to change the NCAA's rules at the outset of the NIL era.
July 1: State laws are scheduled to begin to go into effect. Athletes who attend school in Alabama, Florida, Georgia, Mississippi, New Mexico, and Texas would be able to start accepting endorsement deals on this date. The NCAA might file a lawsuit against the states before July 1 and ask a judge for an injunction that, if granted, could postpone the law's enactment.