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Supreme Court rules against NCAA in landmark antitrust case

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The reckoning is coming. It hasn’t arrived yet, but it’s coming.

On Monday, a unanimous U.S. Supreme Court (when is the Supreme Court ever unanimous on anything?) ruled against the NCAA on the question of whether the antitrust laws apply to rules restricting the benefits that any school may offer to student-athletes.

The outcome is narrow but the future implications could be very broad. For now, schools must be permitted to compete for student-athletes by offering educational benefits beyond undergraduate tuition, room, board, fees, and books. Enhanced education-related benefits from a given school no longer can be regarded as prohibited by the NCAA, a rule that in the opinion of the Supreme Court violates the antitrust laws.

Justice Gorsuch delivered the opinion for the nine-member Court. A concurring opinion (basically, an agreement but an articulation of different reasons) from Justice Kavanaugh has gotten and will continue to get more attention than the primary submission.

In his concurring opinion, Justice Kavanaugh essentially calls the NCAA what it is, and what it has been for decades: A golden-egg factory that refuses to properly compensate the geese.

“The NCAA has long restricted the compensation and benefits that student athletes may receive,” Justice Kavanaugh writes. “And with surprising success, the NCAA has long shielded its compensation rules from ordinary antitrust scrutiny. Today, however, the Court holds that the NCAA has violated the antitrust laws. The Court’s decision marks an important and overdue course correction, and I join the Court’s excellent opinion in full.”

Justice Kavanaugh explains that his separate opinion is aimed at underscoring the fact that, beyond the rules at issue in the current case, “the NCAA’s remaining compensation rules also raise serious questions under the antitrust laws.”

“The NCAA couches its arguments for not paying student athletes in innocuous labels,” he writes. “But the labels cannot disguise the reality: The NCAA’s business model would be flatly illegal in almost any other industry in America. All of the restaurants in a region cannot come together to cut cooks’ wages on the theory that ‘customers prefer’ to eat food from low-paid cooks. Law firms cannot conspire to cabin lawyers’ salaries in the name of providing legal services out of a ‘love of the law.’ Hospitals cannot agree to cap nurses’ income in order to create a ‘purer’ form of helping the sick. News organizations cannot join forces to curtail pay to reporters to preserve a ‘tradition’ of public-minded journalism. Movie studios cannot collude to slash benefits to camera crews to kindle a ‘spirit of amateurism’ in Hollywood.”

Amen to all of that. And those words will set the stage for broader and more aggressive attacks on a system that has allowed the various universities to stuff their coffers full of cash, to pay everyone involved with its sports programs except the athletes, and to continue to delay inexplicably the moment at which those who deserve to receive real financial rewards for the billions flowing from their talents, efforts, and sacrifices finally will be treated fairly.

“Price-fixing labor is price-fixing labor,” Justice Kavanaugh states. “And price-fixing labor is ordinarily a textbook antitrust problem because it extinguishes the free market in which individuals can otherwise obtain fair compensation for their work. . . . Businesses like the NCAA cannot avoid the consequences of price-fixing labor by incorporating price-fixed labor into the definition of the product.”

Here’s the kicker from Justice Kavanaugh, the ultimate truth from which the NCAA has been running: “The bottom line is that the NCAA and its member colleges are suppressing the pay of student athletes who collectively generate billions of dollars in revenues for colleges every year. Those enormous sums of money flow to seemingly everyone except the student athletes. College presidents, athletic directors, coaches, conference commissioners, and NCAA executives take in six- and seven-figure salaries. Colleges build lavish new facilities. But the student athletes who generate the revenues, many of whom are African American and from lower-income backgrounds, end up with little or nothing.”

The NCAA tries to hide behind the notion that there’s a magic or a purity to amateur athletics and the traditions they have spawned. That facade is beginning to crumble. Justice Kavanaugh takes a flamethrower to it.

"[T]hose traditions alone cannot justify the NCAA’s decision to build a massive money-raising enterprise on the backs of student athletes who are not fairly compensated,” Justice Kavanaugh writes. “Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate. And under ordinary principles of antitrust law, it is not evident why college sports should be any different. The NCAA is not above the law.”

No, it isn’t. And the NCAA surely knew it before today. Roughly a decade ago, as society began to ask tough questions about a billion-dollar business that fails to fairly compensate its most important workers, the NCAA likely realized that the reckoning someday would arrive. The goal has been to delay it for as long as possible.

Today’s ruling shows that the NCAA and its members will enjoy several more budget cycles free from line items for on-field labor costs. Justice Kavanaugh’s concurring opinion shows that the NCAA can run, but it can’t hide.