Antitrust Law Daily Wrap Up, TOP STORY—NCAA accused of fixing compensation for top college athletes, (Mar 17, 2014)

By Jeffrey May, J.D.

The National Collegiate Athletic Association (NCAA) and five major NCAA conferences that have agreed to apply NCAA restrictions have entered into a cartel to limit the compensation paid to college football and men’s basketball athletes for their services, according to a complaint filed today in the federal district court in New Jersey. The named plaintiffs in the suit are four current top-tier college football and men’s basketball players. They seek to represent a class of similarly situated players. The suit seeks injunctive relief and damages (Jenkins v. National Collegiate Athletic Assn., Case No. 3:14-cv-01678-FLW-LHG).

Under NCAA and conference rules, players may receive only tuition, required institutional fees, room and board, and required course-related books in exchange for their services as college football and men’s basketball players. These agreements to price fix players’ compensation and to boycott any institution or player who refuses to comply with the price fixing agreement, are per se illegal, according to the complaint. They also would be found unreasonable under rule of reason or quick-look analysis. The remuneration caps have no pro-competitive purpose and cannot be justified on any claimed basis that they promote competition, it was asserted.

The five "Power Conferences" named in the complaint are: the Atlantic Coast Conference, the Big Twelve Conference, Inc., the Big Ten Conference, the Pac-12 Conference, and the Southeastern Conference.

The complaint defines two markets impacted by the alleged conspiracy: (1) the market for NCAA Division I Football Bowl Subdivision (“FBS”) football player services (the “FBS Football Players Market”); and (2) the market for NCAA Division I men’s basketball player services (the “D-I Men’s Basketball Players Market”). Both markets are alleged to be national in scope.

The suit alleges that the NCAA has a history of violating federal antitrust law.

“Instead of permitting individual institutions to compete for the services of players who participate in their major college sports businesses, the NCAA and the power conferences act as a cartel in placing a cap on the athletes’ compensation,” said Jeffrey L. Kessler, a partner at Winston & Strawn , the firm that brought the suit. “These restrictions are a blatant violation of antitrust laws, have no legitimate pro-competitive justification, and it is finally time to bring them to an end.”

Attorneys: James S. Richter, Melissa Steedle Bogad, and Jeffrey L. Kessler (Winston & Strawn LLP) for Martin Jenkins.

Companies: National Collegiate Athletic Assn.

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