Antitrust Law Daily Senate Judiciary Committee hears testimony on reforms for NCAA compensation for student athletes
Thursday, July 23, 2020

Senate Judiciary Committee hears testimony on reforms for NCAA compensation for student athletes

By Nicole D. Prysby, J.D.

The Judiciary Committee heard testimony regarding federal reform for limits on compensation to students athletes and whether the NCAA should receive an antitrust exemption for adopting rules consistent with a federal law.

On July 22, 2020, the U.S. Senate Committee on the Judiciary held a hearing regarding reforms to current National Collegiate Athletic Association (NCAA) limits on compensation for student athletes. Much of the hearing focused on potential reimbursement to students for use of their name, image, and likeness (NIL). The testimony included discussions of whether Congress should act to create a national standard for NIL rules and whether the NCAA should receive an antitrust exemption from liability for adopting and enforcing rules consistent with the provisions of a federal NIL law.

The hearing, "Protecting the Integrity of College Athletics," focused on potential reforms related to NCAA limits on compensation for student athletes, a topic which has been the subject of recent antitrust rulings and proposed legislation. In May 2020, the Ninth Circuit Court of Appeals held that NCAA limits on education-related benefits for student-athletes failed the rule of reason test. The NCAA asked for a stay on that ruling until it can file a petition for a writ of certiorari with the U.S. Supreme Court.

In June 2020, Senator Marc Rubio (R., Fla.) introduced the "Fairness in Collegiate Athletics Act," which would require the NCAA to implement rules to allow student athletes to be compensated for their NIL by third parties. Chairman Lindsey Graham (R, S.C.) gave opening remarks for the hearing, in which he expressed concern about the potential for a bidding war for college athletes and gambling in college sports. Senator Richard Blumenthal (D, Conn.) gave remarks advocating reform at the federal level that gives athletes fair compensation for NIL. Blumenthal and Senator Cory Booker (D, N.J.) are working on a framework for a college athlete bill of rights. Booker also gave remarks and said that athletes should be able to share in the $15 billion industry, as they are responsible for producing the revenue. Senator Booker also said the NCAA proposals are too restrictive and undermine their stated goal of uniformity by allowing different NIL rules from school to school.

The Committee heard testimony from Matthew J. Mitten, Professor of Law and Executive Director of the National Sports Law Institute and the LL.M. in Sports Law program for foreign lawyers at Marquette University Law School, regarding antitrust aspects of college sports. Professor Mitten stated that the current system of reforming college sports through case-by-case antitrust litigation is not an optimal method, as it has resulted in conflicting judicial decisions and a Congressional legislative process would be a better way to effectively reform college athletics. Antitrust litigation, particularly the rule of reason, considers only economic considerations. By failing to take into account non-economic considerations, judicial decisions may have unintended consequences, such as the adverse effect of reducing colleges’ financial ability to sponsor both revenue producing and non-revenue sports. Nationally uniform laws that take into account potentially adverse consequences of reform (such as Title IX gender equity in intercollegiate athletics) are needed. And to establish the necessary objectives of reform, there should be an express, narrow antitrust exemption for the NCAA and its member educational institutions and athletic conferences. This exemption should protect those parties from liability for adopting and enforcing rules consistent with the provisions of a federal NIL law.

The Committee also heard testimony from six other individuals. Dan Radakovich, Director of Athletics at Clemson University, urged Congress to adopt a system of NIL rules that would put an end to antitrust litigation against universities and conferences. George Wrighster, a former college football player for the University of Oregon, pointed out that the NCAA is not allowed to place limits on coaches’ salaries because such limits are a violation of federal antitrust law. The rules should be no different for college athletes and their ability to profit from their NIL. Dr. Mark Emmert, President of the NCAA, testified regarding steps the NCAA has taken to move towards a policy for licensing NIL and advocated for federal legislation in this area to create a national standard. Ramogi Huma, National College Players Association Director, testified that instead of excluding college athletes from antitrust protections, Congress can address certain restraints on trade directly through legislation. For instance, Congress can prevent NIL agreements from being used as inducements to lure high school recruits and college transfers to a particular college. William C. Miller, Jr., President and CEO of the American Gaming Association, testified that there is no need for new federal legislation for sports wagering: the gaming industry is already subject to anti-money laundering rules and is heavily regulated by states and Tribes. Heather Lyke, Director of Athletics at the University of Pittsburgh, in contrast, argued for a prohibition on gambling in intercollegiate athletics.

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