The business of sports has long been shaped by the development of several areas of law, but none may have had more of an impact than the area of antitrust law. Antitrust law is focused on promoting competition and prohibiting the cooperation of competitors. This area of the law has affected the NBA, NFL, and now most recently and drastically, the NCAA. The lone sports league that has not been affected by antitrust is the MLB because they received antitrust immunity in the 1972 case Flood v. Kuhn. This case reaffirmed the earlier notion that baseball was unique from other professional sports and should be allowed an exemption, and if they were ever to not be exempt from antitrust, that the legislature should address that issue.
The NCAA has been the most recent sports league attacked with antitrust lawsuits. Alston and O’Bannon are two of the more notable recent decisions that changed the way the NCAA has had to conduct their business. O’Bannon v. NCAA was brought by a former UCLA basketball player who was making the argument that student-athletes should be paid for the use of their name, image, and likeness (NIL). The NCAA argued that by refraining from paying the athletes, this had a procompetitive effect on the product of college sports. The court here held that while this limit on compensation was likely procompetitive, the rules mandating student-athletes remain “amateurs” were subject to antitrust scrutiny.
In Alston v. NCAA, the United States Supreme Court held that the NCAA member institutions had violated antitrust law by preventing schools from providing unlimited educational benefits to student athletes. This decision allowed schools to provide more benefits for athletes if they were related to their education. Although this case did not directly address the issue of name, image, and likeness, it was clear that this case and its reasoning could be applied to that issue. This was even addressed in Justice Kavanaugh’s concurring opinion that stated while this case didn’t affect other rules limiting student-athlete compensation, this same antitrust analysis would likely apply to NIL rules as well.
Most recently, the NCAA has reached an agreement where they will pay over $2.75 billion in damages to former division I athletes, as well as begin a revenue sharing agreement that will benefit the current division I athletes. However, to receive these benefits, the athletes will have to agree to waive their right to sue the NCAA. This agreement opens the door to many questions that will affect the business of college sports in the coming years such as whether these athletes must be considered employees now and how Title IX will apply to the revenue sharing done by the universities. Not only will the business of college sports be affected by this settlement, but so will the student-athletes financial wellbeing. In connection with the efforts being made for financial literacy to be a part of the conversation involving NIL, this should be pushed even more so now with the future revenue sharing.
Student-athletes who are expecting to receive compensation in the future should consider not only financial/wealth advisors, but also a will or trust attorney to help setup a plan for asset protection. This could provide some benefits in terms of taxes as well as planning for the future.
King Law handles estate planning matters in North and South Carolina, including wills, trusts, and powers of attorney. You can also call us at 888-748-KING to schedule an Estate Planning consultation with one of our attorneys.
How Antitrust Law Shook Up College Sports
