A Prelude to Jenkins v. NCAA: Amateurism, Antitrust Law, and the Role of Consumer Demand in a Proper Rule of Reason Analysis
18 Pages Posted: 12 Oct 2017 Last revised: 7 May 2018
Date Written: 2017
On September 30, 2015, the United States Court of Appeals for the Ninth Circuit held in O’Bannon v. National Collegiate Athletic Association that the National Collegiate Athletic Association (“NCAA”) violated Section 1 of the Sherman Act by prohibiting member colleges from offering their athletes compensation equal to the full cost of their college attendance. Nevertheless, the O’Bannon decision failed to enjoin the NCAA from maintaining its rules that prevent colleges from paying their athletes directly in cash or with additional in-kind benefits.
At present, the antitrust status of the NCAA’s “no pay” rules again are the subject of legal challenge in Jenkins v. National Collegiate Athletic Association—a lawsuit that seeks to further overturn the NCAA’s amateurism rules that “plac[e] a ceiling on the compensation that may be paid to [college] athletes for their services.” Although the NCAA has claimed that “pay-for-play arrangements would transform the intercollegiate sports model into a minor league in which the virtues of college sports . . . would disappear,” advocates on behalf of players’ rights recognize that, even absent pay, the operation of college football and men’s basketball already “has the feel of a professional economic machine.”
This Article serves as a prelude to the litigation in Jenkins. Part I of this Article provides a brief overview of the current economics of NCAA Division I men’s basketball and NCAA Football Bowl Subdivision (“FBS”) football. Part II explores the underlying antitrust challenges to the NCAA’s “no pay” rules in both O’Bannon and Jenkins. Finally, Part III explains how the issue of consumer demand applies to the expected antitrust analysis in Jenkins, and why a strong consumer demand survey would help the plaintiffs to prevail in Jenkins.
Keywords: antitrust, Sherman Act, NCAA, National Collegiate Athletic Association, Jenkins, O'Bannon, athlete pay, wage fixing, collusion, pay for play, consumer harm, consumer demand, Rule of Reason
JEL Classification: I2, I23, I24, I28, K2, K22, K31, Z2, Z22, Z28, Z1, L12, L13, L4, L44, K1, K21
Suggested Citation: Suggested Citation