Antitrust, College Sports and the Ivy League

ANTITRUST, COLLEGE SPORTS AND THE IVY LEAGUE

A recent decision by Hon. Alvin Thompson in the District of Connecticut dismissed one of the more absurd antitrust cases ever filed, against all eight colleges in the Ivy League, alleging that they had entered into an unlawful conspiracy NOT to offer athletic scholarships, but instead to force their student-athletes actually to study. The decision exposes what a fraud “college” athletics has become.

For years and years, of course, the 350 Division I NCAA schools have offered athletic scholarships and other benefits to persons they call student-athletes but who really aren’t students at all. The two money sports, men’s football and basketball, supposedly supported the rest of the athletic factory. Now women’s basketball and maybe even volleyball are starting to come into their own from a revenue perspective. Calling these kids “students” is a bit of a misnomer. During their athletic season they can hardly cover a class schedule, and even the off-season is hard given training regimens. At best they are often channeled into easy courses that allow plenty of time for their real jobs which are sports. Not a lot of STEM majors or lab work. In fact, the money was so large that refusal to pay the “students” resulted in monopoly rents that were siphoned off by the coaches who were often paid more than their professional counterparts. Many such coaches were routinely the highest paid public state employee, by a long-shot. The president of Ohio State was once reported to say he hoped he wasn’t fired by the football coach.

The hypocrisy of the whole system has led, via the O’Bannon settlement, to NIL, or Name, Image, Likeness, deals being permitted. O’Bannon settled an antitrust suit against the NCAA alleging an unlawful conspiracy setting prices for college athletes at…zero. NCAA rules only allowed scholarships for fake “students” who received nothing for their athletic endeavors. But there was just too much money hanging around the entire system for that hypocrisy to continue. Now the kids can at least get some endorsement and licensing dollars.

So, what is the next thing the plaintiffs class action bar tried in this “arena”? I know, I have a good idea, they said. Let’s sue the Ivy League, alleging that their rule preventing athletic scholarships is itself an antitrust conspiracy. I mean, you’ve got to be kidding me. The one Division I sports league that wants to maintain true amateurism, and educating STUDENT-athletes, is violating the antitrust laws through promotion of these values? Fortunately Judge Thompson saw through the scam. He dismissed the case, Choh v. Brown University, et al., with prejudice.

All sports of course require rules, and cooperation, to offer up sports events and games. Those rules are generally not antitrust violations or conspiracies. But rules impacting pricing may be. The plaintiffs’ theory in the Ivy League case was a conspiracy not to pay athletic scholarships, which they said was a per se price fixing violation. Judge Thompson easily rejected that claim and applied a rule of reason instead. Using the rule of reason, he was just as easily able to conclude that the eight schools of the Ivy League were well within their rights and acting reasonably in rejecting the fraudulent model (my phrase, not his) that the rest of Division I “college” athletics has been bribed by TV money to become. He also concluded that the plaintiffs’ proposed market definition, the eight-school Ivy League, also failed, because each of the plaintiffs had made the choice to attend and play sports at schools that offered no athletic scholarship money, rather than seeking an athletic scholarship elsewhere. Nobody forced them to go to an Ivy League school. Indeed, one of the plaintiffs admitted she had been offered full-boat rides at other schools, but elected to attend an Ivy league institution instead.

Judge Thompson’s decision is well-written, and easy. Thank goodness for at least one rational decision in the world of “college” sports.

Several years ago, the Ivy League schools lost a different antitrust case, where they set a collective policy as to how financial aid awards should be calculated. Now THAT was a price-setting conspiracy. Not this time.

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