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Friday, April 26, 2013

A Short Treatise on Amateurism and Antitrust Law: Why the NCAA's 'No Pay' Rules Violate Section One of the Sherman Act

Posted by D. Daniel Sokol

Marc Edelman (Barry University) offers A Short Treatise on Amateurism and Antitrust Law: Why the NCAA's 'No Pay' Rules Violate Section One of the Sherman Act.

ABSTRACT: The National Collegiate Athletic Association (“NCAA”) oversees nearly every aspect of the $11 billion college sports industry. Its powers include scheduling championship events, determining eligibility rules, entering into commercial contracts, and punishing members that refuse to follow its authority. In recent years, some NCAA members have become increasingly wealthy – grossing annual revenues upwards of $100 million per year. However, the NCAA’s rules still deprive these members of the opportunity to share their wealth with student-athletes.

This article explains why the NCAA’s “no pay” rules violate Section One of the Sherman Act. Part I of this article introduces the NCAA, its Principle of Amateurism, and its traditional enforcement mechanisms. Part II provides a brief overview of Section One of the Sherman Act – the “comprehensive charter of economic liberty” in American trade. Part III provides a detailed explanation about why the NCAA ‘no pay’ rules constitute both an illegal form of wage fixing and an illegal group boycott. Part IV then explores eight lower-court decisions that incorrectly find the NCAA eligibility rules to be non-commercial and thus exempt from antitrust scrutiny. Meanwhile, Part V analyzes four additional lower-court decisions that misconstrue the NCAA eligibility rules to be pro-competitive under a Rule of Reason review. Finally, Part VI concludes that even if a court were to find that competitive balance is a reasonable basis for upholding certain “no pay” rules, such rules still should not come from the NCAA, but rather from the individual conference level.

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