Big Stakes Antitrust Trial: in Re National Collegiate Athletic Association Athletic Grant-in-aid Cap Antitrust Litigation

• Jurisdiction: United States,Federal
• Author: Edited by Aaron M. Sheanin
• Publication year: 2022
• Citation: Vol. 32 No. 1

BIG STAKES ANTITRUST TRIAL: IN RE NATIONAL COLLEGIATE ATHLETIC ASSOCIATION ATHLETIC GRANT-IN-AID CAP ANTITRUST LITIGATION

Edited by Aaron M. Sheanin¹

PANELISTS:

• For the Plaintiffs: Jeffrey L. Kessler, Winston & Strawn LLP; and Daniel A. Rascher, Ph.D., OSKR, LLC
• For the Defendants: Jeffrey A. Mishkin, Skadden, Arps, Slate, Meagher & Flom LLP
• Moderator: Aaron M. Sheanin, Robins Kaplan LLP

I. INTRODUCTION & OVERVIEW

In the landmark trial, Alston v. National Collegiate Athletic Association,² a class of NCAA Division I basketball and football players brought suit under the Sherman Act to challenge the NCAA rules limiting the level of financial aid and benefits that student athletes may receive.

Post-trial appeals resulted in a unanimous decision by the United States Supreme Court, affirming the class plaintiffs' victory.

Our panel discussed litigation strategies; the history of antitrust litigation against the NCAA; the emergence of state statutes allowing student athletes to earn money in connection with the licensing of their name, image and likeness; and what the future holds in store for antitrust and college athletics. Each of the panelists played a critical role in the Grant-in-Aid litigation.

Jeffrey L. Kessler is the Co-Executive Chairman of Winston & Strawn LLP and the Co-Chair of Winston's global antitrust and competition practice and sports law practice group. He served as co-lead trial counsel for the class in the Grant-in-Aid litigation. He has also represented classes of NBA, NFL, MLS, and USWNT players; the NFL, NBA, MLB, and NHL players associations; and many individual athletes.

Jeffrey Mishkin, Of Counsel at Skadden, Arps, Slate, Meagher & Flom LLP and the head of Skadden's sports practice for the last 21 years, represented the NCAA in the Grant-in-Aid litigation. Previously, he was the executive vice president and

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chief legal officer of the NBA, where he oversaw every aspect of the league's legal affairs. Since joining Skadden, Mr. Mishkin has represented the PGA Tour, the NFL, the NHL, MLB, the NCAA, and the United States Tennis Association.

Dr. Daniel Rascher, a partner at OSKR, LLC, is an economist specializing in antitrust and competition analysis in the sports industry. His clients have included organizations involved in the NBA, the NFL, MLB, the NHL, the NCAA, and other sports-related matters. Dr. Rascher provided trial testimony for the class plaintiffs in the Grant-in-Aid litigation. He served as a consultant in the White case and as the class expert in the O'Bannon case,³ which respectively challenged the NCAA's athletics-based scholarship and name, image, and likeness ("NIL") rules.

II. HISTORICAL & LEGAL CONTEXT

MR. SHEANIN: I'd like to start with the historical and legal context.

In 1984, the Supreme Court issued a decision in NCAA v. Board of Regents of the University of Oklahoma.⁴ That case involved the NCAA's rules restricting the ability of its member schools to televise football games.

The Supreme Court's decision stated that "[t]he NCAA plays a critical role in the maintenance of a revered tradition of amateurism in college sports," and that "the preservation of the student athlete in higher education adds richness and diversity to intercollegiate athletics and is entirely consistent with the goals of the Sherman Act."⁵

So how did we get from Board of Regents in 1984 to Alston in 2021, which successfully challenged the NCAA's defense that its rules preserved amateurism? I'd like to hear first from Jeffrey Mishkin.

MR. MISHKIN: Thank you, Aaron.

Good afternoon, everyone.

Once the Supreme Court had decided to hear the Alston case, one of the key legal issues was inevitably going to be how today's Supreme Court would read the decision of 37 years ago in Board of Regents.

Now we all understood and recognized that the issue in Board of Regents was not the legality of the NCAA's amateurism rules, but instead, that case had to do with limitations on telecasts of college football games. The Supreme Court, in 1984, found those restraints on telecasts to be a violation of the antitrust laws.

But in the course of that decision, the Supreme Court really went out of its way, in very clear language, to say that it would be procompetitive and lawful for the NCAA to have rules like a prohibition on "pay for play," that is, rules that maintain a distinction between amateur collegiate sports on the one hand and professional sports on the other.

And that would be procompetitive because maintaining a distinction between professional sports and collegiate sports created a different product and gave consumers choice, both of which are well-recognized procompetitive justifications.

Now again, we all understood that was not the holding of Board of Regents, but at least several circuits following Board of Regents, and in particular the Seventh Circuit—a pretty good antitrust court—took that language quite literally. As recently as 2018 in the Deppe case,⁶ the Seventh Circuit held that if an NCAA rule was intended to maintain a distinction between collegiate sports and professional sports, then that rule was presumptively lawful and any antitrust challenge to such a rule should be summarily rejected and dismissed at the motion-to-dismiss stage.

So it appears to us that the Seventh Circuit cases were based largely, if not entirely, on the understanding that Board of Regents was applying a "quick look"—that is, an antitrust shortcut to uphold the legality of NCAA eligibility rules without the

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need for a full rule-of-reason trial. That essentially is what we asked the Supreme Court to hold in Alston: that Board of Regents meant that a challenge to an NCAA rule that was designed to preserve the distinction between collegiate and professional sports—such as the "no pay-for-play" rule—could and should be dismissed on a quick look.

But as you all know, today's Supreme Court was not buying it. Justice Gorsuch, writing for a unanimous court, said that the NCAA's amateurism rules were not at issue in Board of Regents. That was true. And he said that what the Court in that case had to say about the NCAA's amateurism rules was said only in passing; it was not intended to, and did not, bind future courts in any way.

In any event—and I think most importantly—Justice Gorsuch said the nature of college sports, and the market and the economics of college sports, have changed substantially since 1984. Based on the realities of today, the Court said that the NCAA was not entitled to a quick look or any other antitrust shortcut, and would have to defend any of its rules in any case brought under the antitrust laws. There would have to be a full rule-of-reason analysis and a trial.

And that, in summary form, is how we get from Board of Regents to where we are today.

MR. SHEANIN: Thanks, Jeff.

So about a year ago I recall Jeffrey Kessler saying in a panel that he didn't think Alston was worthy of Supreme Court review. You may have slightly different views on that at this point. So I want to give you the opportunity to air them and see if you have any additional thoughts on how we got here from Board of Regents to Alston.

MR. KESSLER: Thank you, and welcome everyone.

I thought Jeff's summary of what happened in Alston is entirely accurate, so I'm not going to add a word to what Jeff has said about that.

I think he accurately described why the nine members of the Supreme Court concluded that the NCAA could not read Board of Regents any longer as creating some type of shortcut, or some type of special treatment. Instead, all that Board of Regents meant was that in dealing with these amateurism restrictions, the full-blown rule of reason would be applied. We had a full-blown rule-of-reason trial and they lost, and the Supreme Court said that the judge properly conducted that trial without legal error—which is what the Ninth Circuit found—and therefore the verdict would be affirmed.

In terms of the question as to our opposing cert., we did. Our position was that what the Ninth Circuit had decided was exactly right, which is that the full-blown rule of reason should be applied and that this was really a fact-based determination by a trial court, and therefore it did not present the type of fundamental legal issues that would ordinarily require cert. review.

We made that argument because our goal was to preserve the victory the players had won. Obviously if cert. was denied, that victory would have been preserved and we would have gone on to argue that the Ninth Circuit was correct.

In retrospect, you know, we always look back in history. Obviously from a players' standpoint, we're delighted the Supreme Court granted cert. because, as a result of the Supreme Court so strongly affirming the Ninth Circuit's decision and making it so clear that Board of Regents could not be read as creating some type of presumption of legality, that argument could no longer be made by the NCAA in any circuit.

So it's no longer possible for the NCAA to say, well, the Ninth Circuit got it wrong but the Seventh Circuit got it right. The Supreme Court, in effect, resolved that argument in favor of the players, and I believe that's had profoundly positive consequences for the players right now on a whole host of issues.

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On both sides you could apply the old adage that sometimes you wish for something and it turns out you would have preferred the other. I'm happy cert. was granted. I suspect the NCAA would have preferred that cert. not be granted, if it knew what the outcome was going to be in advance.

III. THE CHANGING ECONOMIC LANDSCAPE

MR. SHEANIN: Jeffrey Kessler, you mentioned a whole host of outcomes that you think are favorable to players, and I do want to get into them in a little bit.

Jeffrey Mishkin mentioned that Justice Gorsuch discussed the changing nature of the market for college sports and the economics of it. So Dan, I'd like you to weigh in on the discussion here.

How has the economic landscape for college athletics changed over the last 37 years...