Earlier this summer, the Supreme Court unanimously affirmed the lower court’s decision in Alston v. NCAA that restrictions on additional education-related benefits to student athletes did in fact violate antitrust law. The day following that decision, the NCAA opted not to challenge Name, Image and Likeness laws that were scheduled to take effect in select states. Within days, student athletes began exercising their newfound rights to monetize their name and influence, and college athletic departments scrambled to enact policies to govern this new world.
Harvard Law Today asked sports law expert Peter Carfagna, lecturer on law and faculty supervisor of the Sports Law Clinical Program at Harvard Law School, to break down what this ruling means for the future of the NCAA.
Harvard Law Today: The Supreme Court’s decision in Alston v. NCAA was unanimous. What factors may have set this case apart from the more common split decision that often reflects the more liberal/conservative leanings of the justices?
The main takeaway from the unanimous decision was that antitrust laws apply to the NCAA just like any other association or organization
Peter Carfagna: I think the main takeaway from the unanimous decision was that antitrust laws apply to the NCAA just like any other association or organization. The NCAA can’t expect to get any special treatment or exemption from federal law. That was loud and clear. They were telling the NCAA that [NCAA v.] Board of Regents [of the University of Oklahoma] and its dicta does not give you any sort of immunity or allow you to get a different kind of scrutiny other than traditional rule of reason.
HLT: You mentioned Board of Regents. Can you speak to how that landmark 1984 decision relates to this ruling and to the impact that it has had on college athletics in the intervening decades?
Carfagna: Counsel for the NCAA have, for years and years, been relying on the dicta from that case. Justice Gorsuch in his unanimous opinion said that was dicta and you can’t rely on it — period, full stop. That dicta is no longer a precedent that the NCAA can rely on at all to protect its amateurism model. There’s no quick look, there’s no, ‘oh, we’re exempt from antitrust scrutiny’, all of which the NCAA had been using the Board of Regents to argue. The NCAA lost that case, as a television monopolization case. The dicta that’s in there is only that it’s not a holding and therefore, going forward, all rules will be subject to rule of reason scrutiny, which is very bad news for the NCAA.
HLT: The Alston case did not directly address payments to college athletes or any sort of revenue sharing or Name, Image and Likeness rights [NIL]. However, it did open the door to all these possibilities and new NIL policies were quickly enacted following the ruling. Was the Supreme Court deliberately choosing to hear this case to send a message to the NCAA about where they stand on more explicit changes to the amateurism model?
Carfagna: This case was separate from the NIL changes that followed, but the strong message that was sent here, especially through Justice Kavanaugh’s concurrence, was the NCAA is not above the law. He goes way out of his way to say if this were any other industry, any other association, everything they’re doing would be found to be a violation — basically inviting additional litigation.
Right on the heels of that, there were several states that were going to go ahead and allow NIL for their student athletes. The option, pre-Alston, would have been for the NCAA to file a huge omnibus comprehensive stay order, a preliminary injunction, or a temporary restraining order. This strategy would have been to claim that this is a commerce clause issue. It must be dealt with at the federal level, and there must be a federal certainty on what Florida can do versus what California can do and when, and why, and how, and so forth. After Alston, especially this concurrence from Kavanagh, the NCAA just backed down completely. They were not going to enforce their NIL prohibitions, saying it’s up to its member schools to decide what that means to them.
I think they read the tea leaves. They now don’t have Board of Regents dicta to rely on and they’ve got the stinging criticism from Justice Kavanaugh basically saying, ‘all your rules, if they came before us, would be subject to this level of scrutiny’. I can’t read their minds, but they’d be foolish to think that if they did a full court press and tried to stop these state NIL laws after Alston, they’d be forced to think if it came to the federal level, Alston would certainly control it. Then, they would be found to be in violation of the antitrust laws.
Instead, all they did was to say, ‘We are not going to prohibit these state-level NIL laws. We’re not going to enforce our rules. We leave that to you, the schools and to the conferences.’
HLT: How much leeway do NCAA member schools have in terms of enacting their own NIL policies? It seems very ambiguous right now.
Carfagna: Exactly, yes. And you see, some of the aberrational things that are already occurring. That sort of thing is springing up all over the country, with all sorts of backdoor ways of essentially paying for play, but calling it NIL. We’re teetering on the brink of pay-for-play for sure.
HLT: Do you anticipate vast differences between member institutions or a more uniform approach? How are schools adapting to such a dramatic shift in the NCAA model?
Carfagna: Wild, wild west is a good way of describing it. Every big school has their programs for helping student athletes monetize their brands. Their name, image, and likeness opportunities are becoming a huge recruiting tool. It’s tumbling like that. Conferences, and then schools within each conference, are tailor-making their own NIL policies to fit what they believe to be the most important purpose of their athletic programs. The only thing that’s going to corral this is going to be each institution taking very seriously the very vague guidelines the NCAA has put out and interpreting them to focus on the educational benefits or financial benefits for their students.
HLT: Do you foresee this eroding any of the power the NCAA has in other areas? Are we shifting to a model that gives more power to the student athletes themselves?
Student athletes are playing a very hot hand right now in terms of monetizing their name image and likeness
Carfagna: It’s a huge shift. Some of these student athletes are going to make big money while they’re still playing for their university. Trevor Lawrence could have been a six-figure-plus earner last year, while he was playing for Clemson. There’s still a lawsuit pending that will seek damages for amounts that prior student athletes were not allowed to monetize. The horse is out of the barn here. Student athletes are playing a very hot hand right now in terms of monetizing their name image and likeness. You’ll have to watch this space very closely because it’s changing by the day.
HLT: How much assistance can a university offer to its students and how should they be advising student athletes?
Carfagna: The school can provide an education. They can explain, ‘here’s the law, here’s what a representation agreement should look like, here’s what a license agreement ought to look like in a perfect world’, but they’re not going to weigh in on whether it’s a good, bad, or indifferent agent or deal. They just can’t. That would be a liability. There are a lot of third-party entities that have sprung up just for this purpose, and they are working with the schools to help them assist their students with these NIL agreements and ensure that the schools themselves can’t be held liable.
The good policies are saying, ‘we will help you, we will establish best practices. We won’t judge deals, but we’ll tell you what a standard exemplary deal would look like for a product endorsement, for a license agreement, what a social media post contract generally should look like and what rights you should reserve’. Either the school, or if they bring in a third party, can and should educate on all that. It’s going to work well for the student athlete, and I think it makes the NCAA irrelevant in this area.