Pay for Play: Will Student Athletes Receive Hundreds of Millions of Backpay in Antitrust Suit?

0

On June 15, 2020, two Division I college athletes, Sedona Prince and Grant House, filed a lawsuit against the National Collegiate Athletic Association (“NCAA”) and five Division I athletic conferences, alleging that the defendants engaged in anticompetitive practices and conspired to limit NCAA athletes’ opportunities for profit.[1] The plaintiffs alleged that the NCAA rules and conference rules fixed the amount that student athletes could be paid for use of their name, image, and likeness (“NIL”) to zero dollars and cut them out of the market entirely.[2]

The NCAA did not allow any student athletes to profit off of their NIL until July 1, 2021.[3] Prior to that date, NCAA student athletes were not able to do anything to monetize their NIL.[4] Essentially, the NCAA had been taking advantage of student athletes by using their NIL for profit and prohibiting student athletes themselves from sharing in that benefit.[5]

The lawsuit filed by Prince and House has three causes of action.[6] First, the plaintiffs allege that the defendants violated Section 1 of the Sherman Act by placing an unreasonable restraint on trade in the relevant market by artificially depressing, fixing, maintaining, and/or stabilizing the prices that student athletes are paid to zero dollars.[7] Next, the plaintiffs allege that the defendants also violated Section 1 of the Sherman Act via group boycott/refusal to deal by requiring all student athletes to relinquish their rights to their own NILs and by leveraging eligibility rules as a threat of a boycott to force compliance.[8] Third, the plaintiffs allege that the defendants had been unjustly enriched by their conduct.[9]

After the plaintiffs filed their complaint, the defendants filed a motion to dismiss, but the District Court denied it.[10] This led to a proposed trial date of September 2024.[11] Most recently, on Friday, October 21, 2022, the plaintiffs filed a motion for class certification.[12] The plaintiffs are seeking to establish four classes.[13] The first consists of all Division I athletes who competed from the date of the complaint through the case’s judgement (likely September 2024).[14] The other three classes seek monetary damages, and they are broken up by sport.[15] There is a proposed football and men’s basketball class, women’s basketball class, and other sports class.[16]

Since the lawsuit was initially filed, NCAA student athletes gained the right to engage in NIL activities on July 1, 2021.[17] This means that student athletes can make money for endorsements, sponsorships, or advertisements.[18] However, the implications of the lawsuit from House and Prince go beyond these rights that student athletes now have. House, Prince, and their proposed class are seeking back payment for missed opportunities to capitalize on their NIL due to the NCAA’s anticompetitive practices.[19] If the proposed classes are certified, former and current NCAA student athletes have a chance to potentially recover hundreds of million dollars.[20] The lawsuit also attacks “the NCAA’s restriction on use of NIL as a recruiting tool,” indicating that there are potentially larger implications in the suit.[21]

While there have been previous antitrust lawsuits against the NCAA (O’Bannon and Alston), they resulted in allowing member schools to award student athletes full-tuition scholarships and other educational benefits, such as technology and tutoring.[22] None have resulted in requiring schools and the NCAA to award back-pay to athletes.[23] If the class is certified and the plaintiffs win in this lawsuit, the NCAA amateurism model could change entirely.[24] While the lawsuit seeks back payment for restrictions on NIL deals, it also contends that student athletes could, in the future, seek to recover percentages of schools’ television broadcast revenues.[25] Is there a future world in which NCAA student athletes truly get paid to play?


[1] House v. NCAA: Another Name, Image, and Likeness Antitrust Lawsuit, Barlow Garsek & Simon, LLP (June 16, 2020), https://bgsfirm.com/house-v-ncaa-another-name-image-and-likeness-antitrust-lawsui/; Complaint, Grant House v. Nat’l Collegiate Athletic Ass’n (N.D.C.A. 2020)(No. 4:20-cv-03919), https://lead1association.com/wp-content/uploads/2020/06/2020-06-15-house-ncaa-nil-class-action-lawsuit-hagens-berman.pdf [hereinafter Complaint].

[2] House v. NCAA: Another Name, Image, and Likeness Antitrust Lawsuit, Barlow Garsek & Simon, LLP (June 16, 2020), https://bgsfirm.com/house-v-ncaa-another-name-image-and-likeness-antitrust-lawsui/.

[3] NCAA Name, Image, Likeness Rule, NCSA College Recruiting, https://www.ncsasports.org/name-image-likeness#:~:text=Effective%20July%201%2C%202021%2C%20the,NIL%20rules%20have%20been%20established.

[4] Id.

[5] See id.

[6] See Complaint, supra note 1, at 83-87.

[7] Id. at 83.

[8] Id. at 85-87.

[9] Id. at 87.

[10] House v. NCAA: District Court Denies Motion to Dismiss, Barlow Garsek & Simon, LLP (July 29, 2021), https://bgsfirm.com/house-v-ncaa-district-court-denies-motion-to-dismiss/.

[11] Riley Overend, Grant House Seeking Class Status in Lawsuit for Lost NIL Pay, Swim Swam (Oct. 25, 2022), https://swimswam.com/grant-house-seeking-class-status-in-lawsuit-for-lost-nil-pay/#:~:text=The%20House%20v.,scope%20of%20athletes’%20publicity%20rights.

[12] Drew T. Toner, NIL Plaintiffs Seek Class Certification in Antitrust Lawsuit, Duane Morris Sports L. (Oct. 24, 2022), https://www.lexology.com/library/detail.aspx?g=54ed8384-41b6-4c6a-a934-23d6bd7f39be.

[13] Overend, supra note 11.

[14] Id.

[15] Id.

[16] Id.

[17] Michelle Brutlag Hosick, NCAA Adopts Interim Name, Image and Likeness Policy, Nat’l Collegiate Athletic Ass’n (June 30, 2021, 4:20 PM), https://www.ncaa.org/news/2021/6/30/ncaa-adopts-interim-name-image-and-likeness-policy.aspx.

[18] See Student-Athlete Compensation, Nat’l Conf. State Legislatures (May 16, 2022), https://www.ncsl.org/research/education/student-athlete-compensation.aspx#:~:text=A%20growing%20number%20of%20states,events%20such%20as%20autograph%20signings.

[19] See Complaint, supra note 1, at 87.

[20] Id.

[21] Chase Goodbread, Pay for College Athletes could be on the Horizon: Will the NCAA Crumble?, Tuscaloosa News (May 12, 2022, 1:28 PM), https://www.tuscaloosanews.com/story/sports/college/football/2022/05/12/house-vs-ncaa-case-could-far-more-impactful-than-nil/9714185002/.

[22] Judith Araujo & J. Nicci Warr, A Dollar and a Dream: Student-Athlete Compensation in the Aftermath of U.S. Supreme Court’s Alston Decision, JD Supra (Oct. 7, 2021), https://www.jdsupra.com/legalnews/a-dollar-and-a-dream-student-athlete-2056263/; see generally O’Bannon v. NCAA, 802 F.3d 1049 (9th Cir. 2015); NCAA v. Alston, 141 S.Ct. 2141 (2021).

[23] Id.

[24] See Goodbread, supra note 22.

[25] Id.

Share.

About Author

Comments are closed.

Fordham Journal of Corporate & Financial Law