NCAA athlete pay dispute sidestepped by U.S. Supreme Court

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(Bloomberg) — The U.S. Supreme Court sidestepped a clash over the multibillion-dollar college sports business, refusing to consider whether the National Collegiate Athletic Association has violated federal antitrust law by restricting athlete compensation.

The justices turned away appeals from both the NCAA and 20 former athletes who sued over the rights to their names and images. Both sides appealed a federal appeals court decision that allowed larger athletic scholarships yet blocked additional compensation.

The NCAA has long limited what athletes can receive from universities. Since 1956 colleges have been allowed to offer scholarships that cover tuition, fees, room and board, and books.

U.S. District Judge Claudia Wilken said the NCAA was stifling competition by preventing universities from offering a few thousand dollars more to cover the full cost of attendance. Wilken also said universities should be allowed to provide athletes an additional $5,000 a year in deferred compensation.

A divided federal appeals court upheld that ruling in part, saying that colleges could cover full attendance costs but that the proposed $5,000 payments went too far.

The appeals court said the NCAA’s amateurism rules had some positive effects, such as by helping to integrate academics and athletics, and contributing to the popularity of college sports.
After the trial judge ruled, the NCAA’s largest conferences voted to let their universities provide the full cost of attendance.

In its Supreme Court appeal, the NCAA said it’s a joint venture, entitled to broad latitude to adopt the rules it needs in order to offer a distinctive product.

“This court and others have recognized that such practices are pro-competitive because they lead to additional choices for consumers,” the NCAA said in its appeal.

The players, led by former UCLA basketball star Ed O’Bannon, asked the high court to reinstate the $5,000 payments. Their lawyers said that the NCAA rules restrict competition and that the appeals court was wrong to treat them as having any beneficial impact.

“The NCAA’s untenable position is that it may prohibit its members from competing on price for the talents and services of the young athletes who make this billion-dollar enterprise possible,” the players argued.

The cases are O’Bannon v. NCAA, 15-1167, and NCAA v. O’Bannon, 15-1388.

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