Is amateurism dead? The Supreme Court says maybe

Amateurism is on life-support and may not survive its next court challenge

Over the past few weeks the ground upon which the United States sport infrastructure is built has begun shifting. Recent laws in several states triggered the NCAA to suspend some of its rules regarding athlete compensation the day before the first batch of those laws were to take effect, and just the week before that, a unanimous Supreme Court decision removed limits on some types of non-cash compensation schools may offer to athletes. These issues signal stormy times ahead for college sports because both of them weaken amateurism, the NCAA's primary procompetitive tool. If amateurism goes—and I think the Kavanaugh concurrence in Alston shows that it is on shaky ground—we will be looking at a very different college sport environment soon. It may be hyperbolic to say that the NCAA's governance model is in chaos right now but that's certainly the way it feels.

Amateurism is used to maintain competitive parity in collegiate sport. It's not a perfect tool but it is the primary one the NCAA has to promote competition and prevent some schools from taking over the market for top athletes. If schools were able to offer salaries or other financial incentives to recruits then richer schools would be able to assemble better teams and the popularity of the collegiate sport 'product' would eventually be diminished. Amateurism prevents this and shifts the pursuit of competitive excellence to other factors such as coaching and training, and away from the notion of simply buying performance.

But amateurism that is enforced from the top down—as it is in the NCAA regulations—has always had ethical flaws, especially when college sports are collecting large sums of money with none of it going to the athletes who provide the product that earns it. But now amateurism is under closer legal scrutiny and given the Kavanaugh antitrust warning I think big changes lie ahead. Some of these changes have already started in the areas of name, image, and likeness; and non-cash educational benefits. Those involved with sport technical analysis will recognize these changes as perturbations i.e. disruptions with unpredictable outcomes.

The point of this letter is that these unpredictable outcomes will affect more than just college sports. Collegiate sport is an integral part of the sport development system in the United States. Changes to the legal status of so-called amateur athletes will change the NCAA in ways we would be foolish to predict. These changes will have downstream and upstream consequences.

Name, image, and likeness

Several states have enacted laws that prohibit NCAA restrictions on college athletes being able to benefit from the use of their name, image, and likeness (NIL). Specifics vary by state but the result is that the NCAA can no longer restrict NIL activity by athletes. 

On 30 June, the day before the first batch of these laws was to take effect, the NCAA Board of Directors temporarily suspended its NIL restrictions for all athletes, not just those in states with imminent or pending laws. This will maintain a pro-competitive environment between states with and without such laws while giving the U.S. Congress time to craft universal legislation that could replace the current patchwork of state regulations. The temporary suspension may also suppress a perceived need to do so in states that haven't already written their own NIL legislation, thus avoiding even more headaches for the NCAA board if these later-acting states were to introduce other pro-athlete provisions outside of NIL.

The NCAA seems to be hoping for congressional action on NIL but there's no real need for Congress to do anything. As long as one state has a law prohibiting NCAA restrictions on NIL the NCAA's temporary suspension will de facto become permanent. Why? Because the only other option available to the NCAA is to suspend schools in states prohibiting NIL restrictions, which as a purely practical matter is not really an option. 

NCAA v. Alston

In National Collegiate Athletic Association v. Alston the United States Supreme Court affirmed lower court rulings against the NCAA's regulations that limited non-cash education-related compensation to athletes (things like computers, study-abroad, internships, etc.). The NCAA argued that these limits were necessary to maintain competitive equity between schools. Without this restriction richer schools, for example, might be able to sweeten the pot by offering better equipment or more lucrative internships to athletic recruits. The Court didn't buy it and cited antitrust issues as the reason.

If antitrust is the basis for the Court's decision you might wonder why there are any limits on athlete compensation. This is explained in some detail in the opinion so it's worth reading to get an idea of the legal gymnastics involved in strict and lenient interpretation of antitrust rules. There are still limits in place; athletes cannot receive salaries or other cash benefits, for example. However, Alston seems to signal that future decisions might be decided based on a stricter interpretation of antitrust rules. This is what may eventually allow pay-for-play. Indeed the Kavanaugh concurrence makes this clear.

Amateurism is on life-support and may not survive its next court challenge

Amateurism has always been the rationale behind the NCAA's management of competitive parity.¹ By prohibiting member schools from paying athletes or offering other financial incentives for signing with a certain school the NCAA creates the appearance that the recruiting process is fair, and the product seen on the field is materially different from that of a professional team. The distinction between amateur and professional athletes enables the NCAA to argue that collegiate sport depends on its athletes being amateurs or else it would lose popularity amongst fans. 

In the eyes of the public though amateurism is an anachronism and has been for a long time. Arguing that it is essential to assure competitive balance is little more than a rationalization. Other options exist. Insisting that athletes maintain amateur status when their labor earns their schools and conferences huge sums of money make the NCAA stance self-serving and unethical. 

And given what has happened over the past few months in Alston and with NIL legislation, the argument that amateurism is an important part of the NCAA's 'product' is losing steam in the one place where it now matters the most, the courts. The fundamental problem with amateurism in collegiate sport is that it is involuntary; athletes work in an enterprise that makes lots of money yet has no labor cost. Amateurism creates an antitrust problem for the NCAA and if Justice Kavanaugh's concurrence in Alston is any indication of future rulings then amateurism's time is running out. 

The NCAA business model, relying as it does on non-paid labor, would, as Kavanaugh writes, "...be flatly illegal in almost any other industry in America." 

The Alston decision made it clear that using the amateurism concept to argue that non-cash benefits would harm the sport product was a non-starter. In the Court's unanimous opinion, Justice Gorsuch wrote, "The NCAA and its member schools have the 'power to restrain student-athlete compensation in any way and at any time they wish, without any meaningful risk of diminishing their market dominance'." Alston only chips away at amateurism but Kavanaugh's concurrence indicates that its total collapse may be as close as the next lawsuit. The NCAA business model, relying as it does on non-paid labor, would, as Kavanaugh writes, "...be flatly illegal in almost any other industry in America."  

Kavanaugh makes it clear that amateurism is on thin ice. I am not a lawyer but I think the Kavanaugh concurrence is important for two reasons: First, it is a signal to the NCAA that they have to change how they do business; amateurism cannot survive stricter antitrust interpretation. Second, it signals athletes that the Court is ready for a good athlete compensation case.

Why does this matter to anyone not associated with the NCAA or collegiate sport?

Athletes and their families experience sport in slices of time and context, so it's not very often that the full picture of how a sport is organized in the United States is understood by those who play it. In baseball, for example, the experience may begin in a summer T-Ball league, later a youngster might join Little League, then American Legion ball, high school, college, and maybe even the major leagues. None of these contexts are officially connected but it would be naive to think that major changes in one of them wouldn't affect others. 

For example, before the recent NIL action, if a high school athlete were to capitalize on their sport ability as a high school athlete by selling autographs, hosting clinics, or accepting endorsements then they would lose collegiate eligibility because they would be considered a professional athlete by the NCAA—for something that occurred before the athlete ever got to college. Such activity will no longer affect collegiate eligibility because NIL restrictions no longer exist. It may still matter to the high school federation, but that's another argument and another court case for another time.

The biggest question, and concern, is how will a loss of amateurism affect college non-revenue programs? One cannot sensibly believe that all sports are equal within a college athletic department. Right now revenue sports receive more benefits, better facilities, more coaches, better travel, and a host of other justifiable perks that their non-revenue counterparts don't get. If colleges soon have to pay athletes then how exactly will this be done? Revenue sports—football and basketball mostly—might have to pay players if teams actually generate revenue. This would leave less money available to operate non-revenue sports, which might lead to colleges offering fewer non-revenue sports. Title IX will also add a bit of drama to any pay-for-play scenario. Any major changes in Olympic sports at the collegiate level will have downstream effects and national governing bodies should brace for impact. 

Collegiate sport will look a lot different in a few years. Just two months ago NIL and non-cash benefits for athletes were unthinkable in college sport. Change can happen quickly and although we're not exactly in open territory yet, we're going to be there sooner than we may think.

A concurrence to a Supreme Court opinion is not binding. Justice Kavanaugh outlines some circumstances in his concurrence to Alston that were not part of the case. For his conclusions about how antitrust should be applied to the NCAA to become law would require a new case dealing with this issue, thus many believe that he was signaling the Court’s readiness to hear one.

1. As noted in the Alston opinion the NCAA’s definition of amateurism has changed over time. The opinion gives a succinct overview of the NCAA’s use of amateurism since the organization’s inception in 1905.