Sports Economics on Trial: Alston v. NCAA

Abstract

The Supreme Court's decision in NCAA v. Alston already has had profound effects on the governance of college sports. Despite the narrow scope of the relief ordered in Alston, the opinion invites more challenges to NCAA rules that restrict compensation of athletes. Within months after Alston was decided, many athletes already are substantially better off financially, and the NCAA has delegated regulation of compensation of athletes to its conferences and divisions. Moreover, the case represents an intellectual victory for sports economics in that decades of research in the field formed the foundation for the Court's opinion.

Wages, Talent, and Demand for NCAA Sport After the Alston v. NCAA Antitrust Case

“…Given the changing landscape of collegiate sports and the accumulated effect of precedent from prior antitrust challenges against the NCAA , Alston v. NCAA is commonly viewed as not just another antitrust challenge directed at the NCAA but, rather, a “landmark” case and decision (Noll, 2022). In this paper, we examine the legally hypothesized wage repugnance effect in NCAA sports and its monumental implications for the U.S. amateur sport industry.…”

“…In Alston v. NCAA and other related antitrust cases, the Courts have considered whether wage restrictions generate procompetitive benefits in the output market. Of chief consideration to the Courts was whether wage restrictions increase output demand by preventing fans from experiencing a wage repugnance response (Noll, 2022). Therefore, we will evaluate the relationship between input market wage and output market demand for NCAA sports.…”

“…Since 1956, contributions to student-athletes have been limited by a legacy of wage restrictions at or, more recently, near the cost of attending school. Given the changing landscape of collegiate sports and the accumulated effect of precedent from prior antitrust challenges against the NCAA, Alston v. NCAA ( 2020) is commonly viewed as not just another antitrust challenge directed at the NCAA but, rather, a "landmark" case and decision Noll (2022). In summarizing the case, Noll states:…”

“…Since 1956, contributions to student-athletes have been limited by a legacy of wage restrictions at or, more recently, near the cost of attending school. Given the changing landscape of collegiate sports and the accumulated effect of precedent from prior antitrust challenges against the NCAA , Alston v. NCAA (2020) is commonly viewed as not just another antitrust challenge directed at the NCAA but, rather, a “landmark” case and decision Noll (2022). In summarizing the case, Noll states:On June 21, 2021, the U.S. Supreme Court, in a unanimous 9–0 vote, issued a landmark opinion in which it found that some of the National Collegiate Athletic Association’s (NCAA) rules limiting compensation of some college athletes violated antitrust law.…”

“…In Alston v. NCAA , the NCAA argued that wage restrictions for student-athletes generate procompetitive benefits. Noll (2022) states, “The NCAA claimed that its restrictions on compensation of athletes created nine procompetitive benefits: (1) increasing demand for college sports; (2) enhancing academic performance by athletes; (3) increasing educational output by preserving amateur sports as part of higher education; (4) expanding opportunities for college attendance among athletes; (5) promoting support for colleges from alumni, government, and others; (6) diversifying college student bodies; (7) allowing colleges to offer more sports (cross-subsidy); (8) promoting competitive balance among colleges and conferences; and (9) preserving competitive fairness among similarly situated colleges and athletes. The District Court’s summary judgment decision rejected all but the first two because defendants offered no evidence in support of them.” This article will focus on (1) increasing demand for college sport as the salient and primary procompetitive benefit considered.…”