JURIST Guest Columnist Josephine R. Potuto discusses some of the controversies facing collegiate athletes today…

Are college athletes employees? Are college athletes entitled to be paid for competing on college teams? Should college athletes be able to market their names and likenesses? Should college athletes share in profits made when their schools, or the NCAA, markets their names and likenesses? Do colleges conspire through adoption of NCAA rules to engage in anti-competitive conduct? Is there a pro-competitive aspect to preserving a separate identity for college sports that clearly distinguishes them from professional sports such that NCAA rules do not violate the federal antitrust laws? These are questions raised by a spate of lawsuits brought against the NCAA by current and former student-athletes in football and basketball.

So far, the NCAA lost, and won, in a lawsuit brought by Ed O’Bannon seeking, among other things, a share of profits from an NCAA college football video game. The case brought a judicial decision that NCAA amateurism does not have a blanket pass under the federal antitrust laws (the loss) and a decision that the NCAA may cap payouts to athletes at the full cost of attending college (the win). So far, the NCAA lost, and won, in the effort to unionize brought by football players at Northwestern. The regional director of the National Labor Relations Board decided that the football players were employees of the university (the loss) and a unanimous NLRB decided to decline jurisdiction and dismiss the player petition to form a union (the win). An additional two cases, one brought by former West Virginia football player Shawne Alston and the other brought by former Clemson football player Martin Jenkins were consolidated to be heard by federal district judge Claudia Wilken, the trial judge in the O’Bannon case.

On February 3d the NCAA announced a $208.7 million settlement in the Alston part of the consolidated lawsuit. That settlement now waits approval from Judge Wilken.

Alston sued on behalf of a class of former and current men’s and women’s basketball scholarship athletes and football scholarship athletes at schools in the Football Bowl Subdivision (FBS) of Division I. Teams from FBS schools compete in bowl games, not in the NCAA Football Championship. Alston challenged a then-existing Division I rule that capped athletic scholarships at tuition, fees, room, board, and books. Alston sought the difference between such a capped scholarship and full cost of attendance for any year from 2010 forward in which he and other class members received a capped scholarship. Full cost of attendance covers the additional money students need to meet all their living expenses as well as travel home.

In 2015, the NCAA changed its rules so that FBS schools could offer scholarships to athletes that cover the full cost of attendance. It could be said that the Alston settlement simply extended to athletes from 2010 to 2105 a scholarship award that they would have received had the cap been eliminated sooner. There is one thing to remember, however. Eliminating an NCAA ban on cost of attendance scholarships does not mean that each FBS school must choose to give them, although the competitive recruiting environment makes that an exceedingly likely result. The Alston settlement, therefore, effectively provides cost of attendance scholarships to some athletes who might not have been awarded one.

The amount each athlete gets under the settlement depends on the number of years between 2010 and 2015 (s)he received what was then a full athletics scholarship. Because cost of attendance varies from school to school, the amount paid also depends on the school the athlete attended. It is expected that on average, the settlement will pay out $7,000 to each athlete in the class. What the Alston settlement (and the O’Bannon case before it) does not address is scholarship limits for athletes in other sports. The NCAA extended the opportunity for a full cost of attendance scholarship to athletes in head count sports like football and basketball, where each athlete on scholarship gets the full scholarship permitted under NCAA rules. Most NCAA sports are what the NCAA calls “equivalency” sports. NCAA rules in these sports limit the total amount of scholarship money that may be spent by a team and permit a coach to divide that money among team athletes in any way (s)he chooses. When the NCAA lifted its ban on full cost of attendance scholarships, it also raised team caps proportionately. The team cap was not enough to pay each athlete a full capped scholarship before the NCAA rule change. It continues to be not enough to pay each athlete a full cost of attendance scholarship.

Cost of attendance scholarships compensate athletes on a full ride for the full cost they bear to attend school. These scholarships are directly tied to educational expenses. The Alston settlement is grounded in educational values, therefore, and capped at the total amount of those expenses. Paying the full cost of educational expenses does not constitute pay for play any more than paying any lesser scholarship amount did. The result: making these awards permissible does not change the NCAA’s stance that college athletes are students, not employees, of their universities. The NCAA reinforced its stance by settling without conceding that it violated the antitrust laws by capping scholarships at tuition, fees, room, board, and books. The Alston settlement, therefore, is not a game-changer. Instead, the Alston settlement is a sensible, if costly, resolution, that clears the way for the Jenkins part of the lawsuit before Judge Wilken.

Jenkins claims that the antitrust laws forbid any NCAA limit on what schools may pay an athlete to attend and compete. In other words, athletes are entitled to receive whatever a free market for their services (or deep-pocket big boosters) provides. The Jenkins litigation is a full-bore court fight on the future of college sports. Jenkins believes that fundamental fairness dictates that athletes share in the revenue pie they produce. Colleges and the NCAA see such a result as creating a wild west for college recruiting, jeopardizing the ability of schools to offer athletic opportunities to athletes who compete in Olympic and other non-revenue sports, and, fundamentally, to eliminate the line of demarcation that separates college from professional sports. Jenkins, then, is the potential game-changer.

Josephine R. Potuto currently teaches Federal Jurisdiction, Constitutional Law, Sports Law, and Criminal Procedure. She is the Faculty Athletics Representative (FAR) for the University of Nebraska-Lincoln and is the president of the 1A Faculty Athletics Representatives. She represents the University on NCAA committees and is a member of the governance groups of the Big Ten Conference.

Suggested citation: Josephine R. Potuto, The Alston/NCAA Settlement, JURIST – Academic Commentary, March 8, 2017, http://jurist.org/forum/2017/03/Josephine-Potuto-alston-ncaa.php