The National Collegiate Athletic Association (NCAA) prohibits schools from providing financial aid to student-athletes beyond the costs of attending school and forbids student-athletes from receiving compensation related to their athletic ability (such as endorsement deals) from third parties. Student-athletes have challenged these severe restrictions on compensation as violations of antitrust law, which prohibits agreements that unreasonably restrain trade. These challenges have largely failed, and courts have upheld the NCAA’s restrictions as justified under the Rule of Reason because they provide two procompetitive benefits: (1) the preservation of amateurism in college sports, which increases consumer demand; and (2) the integration of academics and athletics, which improves the college experience for student-athletes. This Comment argues that courts have failed to properly scrutinize these justifications, and furthermore that such justifications should be rejected because extensive evidence shows the challenged compensation restrictions do not actually achieve their alleged benefits.
However, there is a third procompetitive justification, not fully explored to date, which justifies certain NCAA compensation restrictions, but would permit student-athletes to receive payments from third parties. This Comment proposes that in the context of higher education, where Congress has shown a commitment to the social welfare goals advanced by defendants, social welfare considerations may justify an agreement under antitrust law. In accord with social welfare goals endorsed by Congress in Title IX, NCAA rules that prohibit extra payments to football and men’s basketball players promote sexual equality in collegiate athletics by enabling schools to provide a wide breadth of athletic opportunities to both men and women. Thus, NCAA rules that limit schools’ provision of financial aid to the costs of attendance are justified. But, third-party payments to student-athletes do not affect a school’s ability to provide equality in athletics. Therefore, NCAA bans on third-party payments should not survive antitrust scrutiny, leaving student-athletes free to capitalize on their value in the market by, for example, endorsing products.