"New Antitrust Lawsuit Against NCAA Alleges Collusion On Value Of Athletic Scholarships"
The NCAA, already embroiled in a major antitrust lawsuit involving the use of athletes’ names, images, and likenesses, was slapped with another antitrust lawsuit Wednesday. This suit, a class-action seeking to represent former players in college football’s five biggest conferences, asserts that the NCAA, those conferences, and its member schools violated antitrust law by colluding to cap the amount of financial aid athletes could receive.
Former West Virginia University running back Shawne Alston filed the suit in the U.S. District Court in San Francisco.
The suit asserts that, as a result of collusion, the NCAA has restrictive rules that cap the amount of tuition a scholarship can cover below the actual cost of attending a university. A recent study found that the average scholarship leaves athletes with a $3,200 shortfall in covering the full cost of attendance, as many registration fees and other costs aren’t covered by the typical grant-in-aid agreement. Alston said in the complaint that he took out a $5,500 loan while at West Virginia to cover the cost of attendance beyond his scholarship.
The suit’s collusion claims rest on the fact that the five major conferences have attempted to institute a full cost-of-attendance stipend above the typical scholarship. Smaller Division I schools have prevented the proposal from gaining approval. That suggests, the suit says, that collusive agreements between schools (and aided by NCAA rules) have prevented schools from competing for players in a way that would lead to agreements that would at least cover the full cost-of-attendance.
Were it not for the NCAA and its member institutions’ collusive caps on scholarships, it states, schools would compete for players in a way that would lead to agreements that at least cover the full cost-of-attendance. In that sense, it says the current structure is anti-competitive and limits athletes from reaching agreements that would better benefit them. “Were the Defendant Conferences to act unilaterally,” the suit says, “each would raise the [grant-in-aid] cap above the current levels.”
“Our case contains a proposal that is designed to provide economic fairness,” lead attorney Steve Berman said in a release announcing the suit. “Numerous reasonable, less restrictive alternatives are available to Defendants’ current anti-competitive practices, including allowing incremental competition between Power Conference Defendants and against their co-conspirator conferences within FBS as to the financial aid terms that conference members will make available to college football players.”
The case seeks an injunction that would keep the defendants — the NCAA and the five major conferences — from continuing to enforce these rules. It also seeks damages for all players who have played in those five conferences since 2010.
The NCAA settled a similar lawsuit in 2008, when it agreed to set aside $10 million for athletes whose scholarships did not cover the full cost of attending their schools. The stipend that large schools have sought is largely a response to that lawsuit.
The suit is the latest legal challenge to the NCAA’s basic economic system. The organization has spent years fighting antitrust cases brought by former UCLA basketball star Ed O’Bannon and former Arizona State quarterback Sam Keller, and a federal judge recently pushed the former players and the NCAA into settlement talks in those cases. If no settlement is reached, the O’Bannon case could go to trial in June, and the NCAA has previously said it is willing to fight the suit all the way to the Supreme Court. Football players at Northwestern University are also attempting to form a players’ union, a move the NCAA opposes.