More “Pay” for College Athletes? Four former college athletes representing a class of more than 20,000 former college athletes sued the National Collegiate Athletic Association (NCAA) seeking to change NCAA limits on the amount of aid that student athletes can be granted. Under long-time NCAA rules, so-called full-ride scholarships were limited to tuition, books, room, and board. The athletes claimed they were denied approximately $2,500 annually because their universities were not allowed, under NCAA rules, to pay the “full cost of attendance,” a package that would include money for insurance, laundry, school supplies, telephone, travel, and so on, in addition to the “full ride.” The class action involved all those playing “major college football” (what was Division I-A and is now the Football Bowl Subdivision) and “major college basketball” (16 top conferences) since 2002. Total damages were estimated at several hundred million dollars. The lawsuit claimed that the NCAA rules constituted a “contract, combination, and conspiracy to fix the amount of financial assistance available to student athletes,” thus restraining trade in violation of section 1 of the Sherman Antitrust Act (explained below). The case was settled in 2008 when the NCAA agreed, among other things, to set aside $10 million over three years to be paid to qualified class members (estimated at 12,000) to reimburse them for bona fide, future educational expenses. Athletes could apply for up to $2,500 per year for three years. The settlement also offers athletes easier access to an existing NCAA pool of $218 million over the years 2008 to 2013 for legitimate educational expenses beyond the “full ride.” As you read this chapter, think about whether the NCAA limit on scholarship funds was, in fact, a violation of antitrust law, but for our immediate purposes, think about the athletes’ complaint as a matter of right and wrong; of fairness. [For more on this case, see www.studentathleteclassaction.com] Questions 1. Was it unfair to deny athletes the additional $2,500 or so that they could “earn” in the market for their services (playing “major college” football or basketball)? Detail the fairness argument for both the athletes and the NCAA. 2. Should college athletes be free to “sell” their services to the highest bidder among America’s colleges and universities? Explain. 3. Joseph Agnew and Patrick Courtney earned college football scholarships but were injured early in their college careers. Consistent with NCAA rules, both players were accorded one-year scholarships with the possibility of renewal. Neither Agnew nor Courtney received scholarship renewals following their injuries. Both players sued the NCAA claiming its rules forbidding multiyear scholarships and imposing caps on the number of scholarships given per team prevented them from securing scholarships that would have covered their full college experience. a. Explain why the two plaintiffs thought they had been wronged by the NCAA rules. b. Do you agree with the two plaintiffs? Explain. See Agnew v. National Collegiate Athletic Ass’n., 683 F.3d 328 (7th Cir. 2012). 4. Ed O’Bannon, former UCLA basketball star, has been leading a group of athletes suing the NCAA on antitrust grounds seeking a 50 percent share of NCAA television royalties from collegiate athletic contests along with a share of licensing fees from football and basketball video games. Do you think players should receive a share of those two income st reams? Explain. [EA Sports, creator of the video games, and Collegiate Licensing Company have settled claims that were raised against them in the O’Bannon lawsuit for a reported $40 million, which is expected to result in payments to players of a few hundred dollars each.]
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