A Prelude to Jenkins v. NCAA: Amateurism, Antitrust Law, and the Role of Consumer Demand in a Proper Rule of Reason Analysis

• Author: Marc Edelman
• Position: Professor Marc Edelman (Marc@MarcEdelman.com) is a tenured Professor of Law at the Zicklin School of Business, Baruch College, City University of New York. He is also a summer adjunct professor at Fordham University School of Law and a columnist for Forbes SportsMoney. Professor Edelman advises numerous businesses on legal issues related to...
• Pages: 227-244

A Prelude to Jenkins v. NCAA: Amateurism, Antitrust

Law, and the Role of Consumer Demand in a Proper

Rule of Reason Analysis

Marc Edelman

TABLE OF CONTENTS

Introduction .................................................................................. 228

I. The Current Landscape of Big-Time College Sports ................... 229

II. Challenging NCAA “No Pay” Rules Under the Sherman Act ..... 231

A. An Introduction to Section 1 of the Sherman Act.................. 231

1. Antitrust Basics ............................................................... 231

2. Applying Section 1 of the Sherman Act to the

NCAA’s No Pay Rules .................................................... 233

B. O’Bannon v. National Collegiate Athletic Association ......... 234

1. Case Overview ................................................................ 235

2. Bench Trial and District Court Decision ......................... 236

3. Appellate Court Decision ................................................ 237

C. Jenkins v. NCAA .................................................................... 238

1. Case Overview ................................................................ 239

2. Why Jenkins May Prove a Game Changer for

College Athletes’ Rights ................................................. 241

III. What It Would Take for College Athletes Truly to Prevail

in Jenkins v. NCAA ....................................................................... 242

Conclusion .................................................................................... 244

Copyright 2017, by MARC EDELMAN.

 Professor Marc Edelman (Marc@MarcEdelman.com) is a tenured

Professor of Law at t he Zicklin School of Business, Baruch College, City

University of New York. He is also a summer adjunct professor at Ford ham

University School of Law and a columnist for Forbes SportsMoney. Professor

Edelman advises numerous businesses on legal issues related to antitrust, gaming,

intellectual property, and sports law.

228 LOUISIANA LAW REVIEW [Vol. 78

INTRODUCTION

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.1 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.2

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.”3 Although the NCAA has claimed that

1. O’Bannon v. NCAA, 802 F.3d 1049, 1079 (9th Cir. 2015) (“Today, we

reaffirm that NCAA regulations are subject to antitrust scrutiny and must be tested

in the crucible of the Rule of Reason.”). Although the NCAA had long purported

in its public relations materials and media that it allowed colleges to provide

athletes with scholarships to cover the cost of their education, until the O’Bannon

ruling, the NCAA’s maximum scholarship levels maintained a several thousand dollar

per year shortfall between the maximum amount of athletic scholarship money

permissible under NCAA rules and the true cost of a student-athlete attending college.

See Free Ride Still Costs Athletes, ESPN (Oct. 26, 2010), http://www.espn.com

/college-sports/news/story?id=5728653 [https://perma.cc/VK2A-PMDQ]; see also

Study: College Athletes Worth Six Figures Live Below the Poverty Line, DREXEL

NOW (Sept. 13, 2011), http://drexel.edu/now/archive/2011/September/Study-Col

lege-Athletes-Worth-Six-Figures-Live-Below-Federal-Poverty-Line (explaining that

a study entitled “The Price of Poverty in Big Time College Sport” shows that the

average scholarship shortfall per college athlete during the 2010–2011 school year

was $3,222 per athlete) [https://perma.cc/TY3Y-5UB6]; Ed Payne, Report: College

Scholarship Athletes are Living in P overty, CNN (Sept. 13, 2011), http://edi

tion.cnn.com/2011/SPORT/09/13/full.scholarships (also citing to the annual average

student-athlete out of pocket expense of $3,222 per year) [https://perma.cc/BD2U-

5ACE]. Although this amount is defined as a “full grant-in-aid,” it does not include

money to cover the costs of all meals, travel to and home from college, basic living

expenses, or even books marked as recommended reading by the student-athletes’

professors; see also Complaint at 3, Jenkins v. NCAA, No. 14-cv-01678 (D.N.J. Mar.

17, 2014) (“[U]nder NCAA and Power Conference Rules, players may receive only

tuition, required institutional fees, room and board, and required course-related

books in exchange for their services.”).

2. O’Ban non, 802 F.3d at 1076.

3. Complaint, supra note 1, at 1–2; see also O’Bannon v. NCAA, 7 F. Supp. 3d

955, 974–75 (N.D.Cal. 2014) (“The amateurism provision in the NCAA’s current