Game-changer: 5 key factors in Supreme Court’s ruling on college athletes

From compensation to budgets to Title IX, pitfalls and opportunities await institutions and the NCAA.
By: | June 23, 2021
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In a decision that will shape the future of college athletics and define the NCAA’s power, the Supreme Court on Monday ruled 9-0 in favor of student athletes being able to receive unlimited educational-related benefits.

That sweep in NCAA v Alston—with the court upholding a ruling from the 9th Circuit court—provided another victory for Division I athletes, who are also piling up wins in many states trying to profit from their name, image and likeness (NIL).

Although the ruling doesn’t wipe out its power completely, the “NCAA no longer has carte blanche to control athletes’ livelihoods and monopolize the market,” Sen. Chris Murphy (D-CT) said in a statement after the court’s decision.

More than just its impact on athletes, the decision could very well define how 130 or so college and university programs at the top level will move forward:

  • Will they seize opportunities to further provide for their players?
  • Will they lower expectations and get booster backing to make athletics less of a priority?
  • Or will they decide the costs are too high and abandon athletics altogether?

All are possible. But Martin Edel, who is chair of Sports Law Practice at law firm Goulston & Storrs and an adjunct professor at Columbia Law School, says there will be opportunities for programs to be transformational. “What it’s going to do is force a number of schools to rethink the viability of their program and what they want to be to their students and alums,” Edel says. “For large schools, it gives them an opportunity to gain recruiting advantages. For smaller schools, it gives them the opportunity to define their position in a way that’s different from the current model.”

Competing for glory

But how feasible will it be for smaller colleges if every athlete wants to be compensated and major programs can pony up big incentives to dozens of athletes? Edel says there may still be ways to bring in quality student athletes and make a difference, especially if they can already earn money off their image from third parties.

“It may be that for some schools, it’s simply not going to be what they had envisioned before,” he says. “Maybe you have other conferences developing outside of the traditional Power 5 (Big Ten, Big 12, Pac-10, ACC and SEC). Maybe you create another classification of bowls. You can have viable competition, and those students who are truly magnificent will still be recruited for the pros.

“But we can have something that meets the boosters’ goal of going to football games every Saturday, meets the sponsors’ goal of having more athletes to advertise its products and meets the students’ goals of having this sport at a real competitive level. Schools want to educate their students and empower them. But if they have a losing program, why would they need to keep that? Is there a better model?”

There are many more questions to be determined over the coming months, says Matt Ralph, partner at the international law firm Dorsey & Whitney, who is co-chair of Dorsey’s Antitrust Practice Group. “A big question is whether the Power 5 conferences will react to this decision by imposing their own limits on student-athlete compensation or by competing for student athletes in new ways,” he says. “Still another question is whether colleges and universities could withdraw from the NCAA and still compete with NCAA schools, thus challenging the NCAA’s monopoly power over college athletics and monopsony power over student athletes.”

While the future for conferences and the colleges they serve is uncertain, the NCAA’s road ahead will be bumpier. Instead of controlling how and when athletes get compensated, it may only end up with advisory power, even as it tries to hold onto the notion of amateurism for players in an arena where coaches get paid millions. “If [the NCAA] wants to be what it’s been, which is to prescribe all these rules that deal with compensation of athletes and how people act, the Supreme Court is saying, you’ve got to rethink that,” Edel says. “Not saying there isn’t a role for the NCAA, but it needs to define what it wants to accomplish.”

Considerations for colleges

Edel defined five areas that will be important for college athletic programs to consider as they weigh the future of student athletes:

  1. Competition. Former Green Bay Packers coach Vince Lombardi once said, “Winning isn’t everything, it’s the only thing.” And college programs aren’t operating to lose—or lose money. Fielding the best teams is always the goal. To do that, Edel says, “You need the best possible athletes you can recruit, gain as transfer students or prevent from transferring. If you promise a grant-in-aid program, that’s an enormous sum. Let’s say your school promises educationally related benefits, too. They can also give them a vigorous NIL endorsement program. If a rival school doesn’t have all those benefits, why would a student want to go to there? Maybe a student will conclude it’s because they have a better educational program. But that often isn’t the motivating factor for student athletes.”
  2. Budgeting. How will struggling college programs that want to remain competitive find the funds and benefits to appease athletes? Good question, says Edel. “Will this concept of additional benefits stretch the existing budget? If it does, where is that money going to come from? Let’s say a college wants Athlete X. To get Athlete X, educationally related benefits should be $20,000 above the grant-in-aid program. That may make a Power 5 school emboldened, but it may make a school in a smaller division much less aggressive about recruiting because of the cost.”
  3. Title IX. Speaking of payments, how will that work when it comes to gender equity? “If you’re paying a student athlete a sum above and beyond, are you allocating these equally among men’s and women’s sports?” Edel asks. “Can you do it just for football players and basketball players because they’re your revenue producing sports? Not under Title IX.”
  4. Internships. Edel says another potential pitfall for colleges could be in benefits such as internships or other connections that have traditionally been monitored by the NCAA. “Who is going to pay for that internship? Is the internship going to be with a private donor? Is that private donor someone who is a big booster of the athletic program? What sorts of guardrails is a school going to enact to make sure the internship is meaningful and not just a cushy thing to compensate the athletes?”
  5. Compensation for labor. Could student-athletes press for more, perhaps seeking benefits as workers? Potentially, Edel says. “You have a situation where athletes are getting paid [through those education-related benefits]. It’s not clear whether this is compensation, like wages and hours within the meaning of the National Labor Relations Act, but it could be, especially as you go beyond simply a grant-in-aid and  deal with additional expenses. These students put in upwards of 60 hours per week during the season. With training and practice, it becomes practically a year-round activity. If so, should these student athletes be treated as employees and given benefits that employees of the school get? This [ruling] is a very significant step in that direction. It’s not something that colleges and universities will have to face today or tomorrow, but they may have to figure out how to deal with it.”