Guest Post -- NCAA Academic Requirements: A Lesson for Antitrust Analysis of Amateurism

Guest Post -- NCAA Academic Requirements: A Lesson for Antitrust Analysis of Amateurism
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The following is a guest post by Sherman Clark, Kirkland & Ellis Professor of Law at the University of Michigan:

NCAA Academic Requirements: A Lesson for Antitrust Analysis of Amateurism 

Sherman J. Clark 

Here is hypothetical but I think illuminating question. If courts determine that it violates antitrust law for NCAA schools to collude in refusing to pay players, might it also violate antitrust law for schools to collude in requiring players to be full-time students? It  might seem obvious that academic eligibility and academic progress requirements do not implicate antitrust law; but it seemed equally obvious a generation ago that amateurism requirements do not implicate antitrust law.  It seemed obvious; but it was wrong.  The logic from Board of Regents to Law to O’Bannon was inexorable. And it does not stop there.

Let me be clear. Courts are not likely to hold that NCAA academic eligibility and academic progress regulations violate the Sherman Act—not any time soon, at least. Rather, my point is that such a ruling would actually make some sense—and would in some sense follow logically from a conclusion that collusive amateurism requirements are illegal. In this light, thinking about why the courts would probably not find eligibility requirements illegal can help us think about the amateurism cases.

One might be tempted to dismiss this comparison out of hand on the grounds that eligibility rules are fundamentally different from amateurism requirements; and that such rules do not amount to price fixing. But price fixing is not the only thing that violates the Sherman Act.  Any restraint of trade that has a substantial impact on competition is illegal if its anti-competitive effects outweigh its pro-competitive benefits.

So, next one might  assert that academic eligibility requirements do not have any substantial anticompetitive effect. But they do. They exclude completely from that labor market anyone is not able to be a full-time student. If all the coffee shops in the United States were to agree to hire only full-time college students, that would be anticompetitive, and thus a violation of the Sherman Act.

Here one might say that college sports are different. Exactly. Being a college student has nothing inherently to do with working as a barista, but it has everything to do with playing college sports. What makes college sports what they are is that they are played by student athletes. And that is the point. Colleges are allowed to collude in this market in a way that would be illegal in other labor markets because the nature of the labor is essential to the nature of the product in a way that is not true in other markets.  Where a restraint is necessary to define a product, it is not illegal.

But is it necessary that players be full-time students? Bear with me here. Would it really alter the nature of the product to let part-time night students play. Granted, if teams were made up of players who are not students at all, even in name, that might well alter the nature and appeal of the game. But it would probably not make a measurable difference to the character or appeal of college sports if the current academic progress requirements were relaxed a bit.

So does that make it illegal for the NCAA to refuse to relax these restraints? Of course not. Courts are not going to get in the business of drawing lines about how much relaxation of the academic progress requirements would ultimately alter the nature of the game too much. There would be no principled place to draw the line.  And besides, such regulations must be seen not in isolation, but in conjunction with other rules, which together define the endeavor—and thus the product. 

In the same way, it will probably make little difference to the nature and appeal of college basketball or football if players are paid a $3,500 stipend, or even $20,000.  But at some point it might.  And how are the courts to draw the line? Of course, courts could simply draw a line by fiat; but the line will be arbitrary and the cases unpredictable. There is no coherent stopping point short of a full free market.  In such a market, stars would be paid large amounts and most other players much less—perhaps less even than what their scholarships are now worth.  And that might well alter the nature and appeal of the game.

Or it might not.  I am trying to highlight a problem here, not solve it. The essential problem is that it will be difficult or impossible for the NCAA ever to show that any one particular thing about who plays college sports is by itself essential.  The risk, therefore, is that the courts will declare aspects of NCAA regulation—one by one—to be inessential in defining the product, and thus illegal restraints of trade.

It is helpful to remind ourselves that there is no law of nature that says people will pay billions to watch semi-pro level sports. No one watches the NBDL. There is some combination of tradition and mystique that makes college football and basketball different and appealing. We should try figure out what that is—and what if any role amateurism plays in it—before we dismantle it one seemingly-inessential element at a time.

If we continue to proceed step by step, asking whether this or that particular restraint is necessary, we may well end reminiscing about the old days when college sports were a big deal—and wondering which was the straw that broke the camel’s back.  And those who started out trying to make sure players get a piece of the pie may find that there is a much smaller pie to divide up. 

Sherman J. Clark is the Kirkland and Ellis Professor of Law at the University of Michigan Law School.