NCAA’s restrictions on compensation ruled a violation of antitrust laws

The National Collegiate Athletic Association (NCAA) has stood by its amateur model, restricting student athletes from being compensated beyond the cost of attendance.

On June 21, 2021, the Supreme Court of the United States of America upheld a ruling that the NCAA was in violation of the Sherman Antitrust Act “by agreeing to restrict the compensation colleges and universities may offer student athletes who play for their teams."

Why is this ruling important to the future of collegiate athletics?

This ruling was specific to benefits such as laptop computers, tutoring services and graduate school scholarships that are education-related but go beyond the traditional cost of attendance. While the Supreme Court did not address compensation related to a student athlete’s name, image and likeness (NIL), several states have official NIL legislation set to take effect as soon as July 1, 2021. This decision may open the door to future antitrust challenges relating to the NCAA’s stance on a student athlete’s ability to profit from their NIL.

Although the NCAA has recognized the need to modernize, it has not yet released any new legislation on the topic of NIL in part due to the antitrust concerns presented in this case. Proposed rule changes are expected to permit athletes to earn money from endorsements both related to and separate from athletics and compensation for other opportunities, such as social media “influencer” activities, business ventures and personal appearances, provided there is no institutional involvement or the use of its trademark/logo and student athletes are not compensated for their athletic participation.

Baker Tilly can help

We can help your institution take a proactive approach to evaluate the current state of your policies, processes, internal controls and definitions related to athletics and NIL to identify opportunities that align with the new changes.

For more information, or to learn more about how Baker Tilly can help, contact our team.