In early December, Ohio attorney general Dave Yost fired off a zinger in a press release: “The ‘AA’ in NCAA might as well stand for ‘arbitrary and atrocious.’”
The comment was directed at what the politician believed was an unlawful transfer rule by the NCAA, which requires non-graduate, multi-time transfer athletes to sit out a season of competition before being eligible to play for their new schools. Yost argued the rule violated antitrust law, which prohibits business practices that can stifle a competitive market and limit earning potential.
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But in a broader sense, the comment was indicative of what the NCAA has become, particularly in the legal realm: an easy mark. All it does is lose.
The most notable example is the NCAA v. Alston case in 2021, in which a historically divided Supreme Court ruled unanimously against the NCAA, voting 9-0 to uphold a lower-level court decision stating the NCAA cannot limit education-related payments to student-athletes due to federal antitrust principles. This decision came in the wake of O’Bannon v. NCAA, which cleared a path for universities to provide “cost of attendance” stipends to student-athletes. Both cases sparked the NCAA to ultimately remove restrictions on college athletes collecting name, image and likeness (NIL) earnings in July 2021.
The NCAA has long governed over — and clung to — an amateurism model of competition. But as college sports, football in particular, have grown wildly lucrative in terms of television dollars and other media rights, that model has been increasingly condemned.
In the two years since Alston, a flurry of lawsuits and legal action have been mounted against the NCAA, serving as a backdrop to the memo NCAA president Charlie Baker released last month proposing the creation of a new subdivision within DI athletics that would allow the highest-resourced programs to directly compensate athletes through a trust fund and/or in-house NIL agreements.
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It was a shocking suggestion from the head of an organization that has fought so hard against that notion, but it reflects the stark reality college sports must reckon with. The NCAA represents roughly 1,100 member schools and half-a-million athletes across 90 sports in Divisions I, II and III. Alabama football has little in common with Carleton College, a private liberal arts school in Northfield, Minn., with an enrollment of roughly 2,000 students that is home to the NCAA 2023 DIII women’s cross country national champions.
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“We’re trying to be supportive as to a big tent approach but, as you saw yesterday with Charlie’s memo, there’s a new reality,” SEC commissioner Greg Sankey said last month.
The subdivision proposal has also been viewed by many as a necessary “conversation starter,” albeit one short on details and not-so-subtly brought forward as the NCAA holds out hope for an antitrust exemption from the federal government, all while legitimate legal challenges against it continue to compound.
“The whole reason we’re in this situation is because the NCAA has done such a poor job the past 20 years,” said one industry source who was granted anonymity to speak candidly. “They let it get out of control. And now we’re having to deal with it, and it puts all of college athletics at risk.”
Below are a handful of the most prominent suits and developments the NCAA is facing and the potential impact of each, along with insight into how Baker’s subdivision proposal has been received.
This list is not exhaustive.
The State of Ohio v. NCAA
The case: A coalition of attorneys general from seven states, led by Yost in Ohio, filed a federal lawsuit in December challenging the NCAA’s multi-time transfer rule. The complaint argued that any college athletes sitting out because of the rule should be granted immediate eligibility.
The impact: This is a very recent legal battle but has already enacted significant change, and it will have near-future reverberations. A federal judge agreed with the complaint and handed down a temporary restraining order on Dec. 13 enjoining the NCAA’s multi-time transfer rule and granting any impacted players immediate eligibility. The TRO was ultimately converted to a preliminary injunction that will remain in effect through at least the end of the NCAA 2023-24 athletic year.
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The most immediate impact was on previously ineligible men’s and women’s basketball transfers. The NCAA has also clarified that any multi-transfer fall athletes (including football players) who transfer to a new school prior to the end of the 2023-24 academic calendar will be immediately eligible for the 2024-25 fall season.
Asked how this suit fits into the NCAA’s other legal battles, Yost described it as a narrow approach to broader issues.
“(The NCAA) is an institution that has not changed quickly or been particularly nimble as the world around it has changed,” said Yost. “All of these things are part of an ongoing discussion that the NCAA ought to be having about what its core mission is, what are we trying to actually accomplish here, and how do we do that within the bounds of the law. Because right now they are not within the bounds of the law.”
House v. NCAA
The case: A federal lawsuit brought by former Arizona State swimmer Grant House in 2020 that seeks damages dating back to 2016 for athletes who were not able to earn compensation from NIL. It also seeks revenues from the NCAA and conferences’ media rights deals. The case, which was granted class-action status for the damages portion in November, is being heard in the Northern District of California by judge Claudia Wilken, who previously ruled in the O’Bannon and Alston cases.
Potential impact: The case is scheduled to go to trial in January 2025 and could include as many as 14,000 current and former college athletes. By targeting the media rights deals, a ruling against the NCAA could force revenue sharing of multi-billion-dollar television contracts among the athletes as well, similar to what occurs in many professional sports leagues. High-end damage estimates range from $3 billion to $4 billion if the NCAA were to lose.
“If that were the case, the NCAA would probably have to declare bankruptcy,” said an industry source, who spoke on the condition of anonymity. “We’re talking about the end of the NCAA, potentially.”
Johnson v. NCAA
The case: A federal lawsuit that argues athletes should be classified as employees of the NCAA and the schools they attend under the Fair Labor Standards Act and are entitled to hourly wages. It was brought in 2019 by former Villanova football player Ralph “Trey” Johnson, who sued the NCAA and nearly two dozen universities.
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The NCAA won similar circuit-court rulings on this matter in 2016 and 2019, but when the NCAA requested this case be dismissed on the basis of those prior rulings, Johnson was granted an interlocutory appeal with the Third Circuit, which heard oral arguments in February. The plaintiffs are also seeking class-action status.
Potential impact: The 2021 Alston decision has framed the argument of considering college athletes as employees in a new light. A ruling in favor of Johnson by the Third Circuit is the type of ruling that could prompt an appeal from the NCAA to the Supreme Court. Any granting of employee status would probably take years to make its way through the judicial system, but it could result in wages, benefits and the ability for college athletes to collectively bargain.
The NCAA has also garnered additional criticism in this case for invoking the 1992 case Vanskike v. Peters in which a judge ruled that incarcerated inmates do not qualify as prison employees, citing the 13th Amendment’s assertion that slavery is illegal except as punishment for a crime.
Hubbard v. NCAA
The case: Yet another federal antitrust lawsuit, this one was filed against the NCAA and Power 5 conferences and seeks back pay of Alston payments (academic-related benefits). With former Oklahoma State running back Chuba Hubbard as a lead plaintiff and seeking class-action status, the complaint was filed in front of the same judge (Wilken) who ruled in the Alston and O’Bannon cases and with the same lawyers who represented the Alston plaintiffs and are representing the House plaintiffs.
Potential impact: This complaint is a direct follow-up to the Alston case and very similar to the House case in the sense that it seeks retroactive damages and back pay for a newly established precedent. In the House case, it’s NIL earnings; in Hubbard, it’s Alston payments. The case underscores what the NCAA is up against. A win for House or any number of these lawsuits against the NCAA could be the first of many.
Schroeder v. University of Oregon
The case: A lawsuit by female athletes against the University of Oregon for alleged Title IX violations. Thirty-two combined members of the Oregon women’s beach volleyball team and women’s club rowing team filed a complaint against the university “for depriving its female student-athletes of equal treatment.” The suit seeks class-action status, requests unspecified damages and to rectify unequal treatment.
Potential impact: This lawsuit is against Oregon, not the NCAA, but the subject matter will catch the NCAA’s attention. Questions regarding Title IX are sure to be at the center of any significant changes to the NCAA’s operating structure and were quickly pointed to as an area of concern in Baker’s subdivision proposal.
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The Schroeder suit is particularly critical of the differences in resources afforded the Oregon football team, which the complaint describes as “palatial locker rooms … state-of-the-art, personalized gear and equipment in seemingly endless quantities … professional-quality practice and competitive facilities … (and) their own theatre with seats upholstered in Ferrari leather,” among other perks. That’s juxtaposed with a women’s beach volleyball team that the complaint claims has to practice and compete in a public park that “lacks any stands for spectators, has bathrooms with no doors on the stalls, and is frequently littered with feces, drug paraphernalia, and other discarded items.”
Oregon football is a major revenue driver for the school in a way beach volleyball and other varsity sports are not, which is the case at most Division I universities. How a judge rules could signal what a broader Title IX legal battle could look like for the NCAA.
Carter v. NCAA
The case: Another federal antitrust lawsuit that was filed in December, it argues that rules prohibiting college athletes from receiving “pay for play” violate antitrust law. The complaint, with Duke football player Dewayne Carter as the lead plaintiff, is also against the NCAA and the Power 5 conferences, and was also filed in the Northern District of California and represented by the same lawyers in the Alston, House and Hubbard cases.
Potential impact: This suit was filed as a direct response to Baker’s subdivision proposal, which raised the possibility of direct compensation for athletes through athletic departments. Add it to the pile of legal and compensatory fronts these suits have covered against the NCAA: NIL, employee status, Alston payments and pay for play.
Baker’s subdivision proposal
What is it?: Baker’s letter last month to all Division I members proposed the formation of the new subdivision where schools would compensate athletes through an “enhanced educational trust fund” and/or NIL agreements, which would be moved in-house and controlled by the athletic departments. In the current system, many efforts are outsourced to third-party organizations known as collectives.
Baker’s proposal suggested an uncapped investment of at least $30,000 per year per athlete for at least half of the schools’ eligible athletes, which would have to remain compliant with Title IX requirements. Trust funds would not be limited to educational spending in the same way Alston payments are.
According to the proposal, DI programs would continue to compete against one another for NCAA championships except football, where the FBS championship is governed by the College Football Playoff.
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Potential impact: Baker’s proposal caught many in college sports by surprise and drew nonplussed reactions. With the NCAA convention scheduled for mid-January, floating it a month prior made sense, but the response made clear it wasn’t something that had been vetted or crowd-sourced ahead of time. The proposal won’t be officially discussed or voted on at the convention.
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“(The proposal) got people stirred up, but that’s about it,” said another industry source. “It feels like (Baker) releasing that was sort of meaningless, because whether or not it would ‘work’ is dependent on the details.”
The details of the subdivision, as many have pointed out, were vague and open-ended. The $30,000 trust minimum was a suggestion, but the proposal didn’t specify whether only the minimum would be beholden to Title IX or if any additional amount would have the same requirements. What about NIL payments, which aren’t currently beholden to Title IX? Does that change if NIL moves in-house? And what is the justification for referring to them as “NIL payments” within this new structure? Would trust funds be made immediately available to athletes, or would the funds be held until an athlete ends or exhausts his/her eligibility, as Congressional members have suggested in the past?
“My sense is (Baker) left it open to interpretation,” said a Group of 5 athletic director, granted anonymity so they could speak candidly, who also pointed out that the proposal wouldn’t have to be adopted and enacted in its entirety, either, and that something like bringing NIL operations in-house could happen well before trusts or a true subdivision separation.
Whatever form it might take, it’s no coincidence that the proposal comes in the shadow of the numerous legal battles. The more complimentary explanation is for an organization criticized for being too obstinate and reactionary under former president Mark Emmert, Baker was being proactive, offering a solution until one was forced upon it. The more cynical reading is that the proposal was a strategically prepared salad of congressional buzzwords aimed at eliciting an antitrust exemption, something Baker and the NCAA have openly stumped for.
In lieu of the NCAA receiving that designation, which the G5 AD said “feels like a reach,” many expect Congress or the courts to compel any sweeping changes within college sports before an official subdivision works its way through the proper channels.
“It’s going to come down to what the federal government does,” said the second industry source.
(Illustration: Eamonn Dalton / The Athletic; Top photos: Tom Williams / CQ-Roll Call, Inc. via Getty Images, David Madison / Getty Images, Ken Murray and Joe Robbins / Icon Sportswire via Getty Images)