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Some potentially big $hit went down Friday night in Oakland as US District Judge Claudia Wilken ruled that the schools participating in Men's and Women's Division 1 Basketball and in Football Bowl Subdivision cannot “limit compensation or benefits related to education”.  However, the impact is not so clear, because the NCAA has the right to appeal, so this could still go on for a while

 

Full Decision: https://drive.google.com/file/d/1Ouzba24_iynEFMCXz4zXOXk-F0XcY2Xn/view

 

Earlier this week, Rep. Mark Walker put a bill to the House which would allow collegiate athletes to profit off their likeness.

 

SI's sports law professor Michael McCann:

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While groundbreaking and disruptive, Judge Wilken’s ruling does not compel any immediate change, and its eventual effects might prove less impactful than some wish. To that end, there are at least four caveats to consider.

 

First, Judge Wilken has given the NCAA 90 days to comply with her order. Excluding weekends and holidays, 90 days would run the calendar to July 16, 2019. However, this date could be pushed back—potentially for months or even years—if the NCAA appeals, which it most certainly will, as the 90 days will be stayed (postponed). The delay is for pragmatic reasons: to ensure that the NCAA and its members can review the order and determine how to best comply. The delay also means the NCAA can continue to enforce current grant-in-aid rules through at least the current recruiting season.

 

Second, Judge Wilken has not authorized a “free market” for athletic scholarships. Instead, she envisions a more dynamic, but nonetheless restrained, market where athletic scholarship amounts must remain, as Judge Wilken and other judges have put it, tethered to academics (a point explored in an accompanying SI legal story on the ruling’s impact). Judge Wilken’s ruling also indicates that conferences will enjoy discretion in determining appropriate restrictions on scholarship values. This suggests that while major conferences might permit their member schools to spend well above the grant-in-aid, other leagues could gravitate towards less generous limitations.

 

Third, while Judge Wilken’s order will enable the approximately 350 colleges that make up NCAA Division I to offer recruits more than a full ride, none will be compelled to do so. This is a crucial point for schools and their compliance offices. Judge Wilken’s order is directed toward how schools conspire with one another, not how each school reaches its individual decision. To that point, while the ruling prevents colleges from continuing to collude through NCAA grant-in-aid rules, each college, on its own, could land in the same place by deciding to not offer a scholarship that exceeds the grant-in-aid. Stated differently, it’s not the grant-in-aid amount that is illegal, but that competing schools and conferences join hands through the NCAA in agreeing to follow it. Considering that only about 20 D-I schools report a profit on athletics and most athletic scholarships are partial rather than full, many if not most colleges will likely decline to offer athletic scholarships that exceed the current levels.

 

Fourth, the NCAA and its conferences will appeal Judge Wilken’s order to the U.S. Court of Appeals for the Ninth Circuit. This is the same appellate court that upheld Judge Wilken’s order in Ed O’Bannon’s case against the NCAA but modified the accompanying remedy. I break down the appeal prospects in an accompanying story on this ruling.

 

AP National College Football Writer Ralph Russo:

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The NCAA argued altering amateurism rules would lead to pay-for-play, fundamentally damaging college sports and harming academic integration of athletes.

 

“The court’s decision recognizes that college sports should be played by student-athletes, not by paid professionals,” NCAA chief legal counsel Donald Remy said in a statement. “The decision acknowledges that the popularity of college sports stems in part from the fact that these athletes are indeed students, who must not be paid unlimited cash sums unrelated to education. NCAA rules actively provide a pathway for tens of thousands of student-athletes each year to receive a college education debt-free.

 

The Ninth Circuit Court of Appeals has already said it expects to take the case. It is possible the injunction will be stayed until the Ninth Circuit rules. Feldman said both sides could have incentive to appeal the ruling.

 

“We believe the ruling is inconsistent with the decision by the 9th Circuit Court of Appeals in O’Bannon,” Remy said. “That decision held that the rules governing college athletics would be better developed outside the courtroom, including rules around the education-related support that schools provide.”

 

USA Today's Steve Berkowitz

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In Friday night's ruling, Wilken again found that the NCAA's current limits on athlete compensation "unreasonably restrain trade."

 

Under antitrust law, this types of restraints can exist if a defendant can show that the limits have certain benefits. And even justified restraints can be overcome if plaintiffs can show there are less restrictive alternatives that would achieve the same outcome for the defendants without significantly increased cost.

 

Wilken ruled on Friday that the NCAA  "failed to show that the challenged rules have an effect on promoting integration of student-athletes and their communities." She also wrote that while the NCAA showed that limits on athlete compensation have some effect on preserving fan interest in college sports "as compared with no limit," the plaintiffs demonstrated that a less restrictive set of compensation limits "would be virtually as effective" as the current limits "without requiring significant costs to implement."

  

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