The NCAA lost in court. But did the Pac-12, Stanford and athletes win?

Aug. 7, 2021, 5:16 p.m.

The Supreme Court recently ruled that the National Collegiate Athletic Association (NCAA) may not limit education-related benefits for athletes, dealing a heavy blow to the powerful administrative body. After years of litigation and multiple landmark suits from collegiate athletics, the June blockbuster case NCAA v. Alston rejected the notion that college sports deserved exemptions from antitrust law. 

The decision challenges the NCAA’s chokehold over student-athletes, according to experts on the subject. Without stringent restrictions on educational benefits, recruiting elite athletes could cost even more money. As Stanford balances an already limited budget, the potential for increased spending on educational benefits could stretch the University’s purse. The scope of the ruling also leaves Stanford in limbo; while the Supreme Court decision only lifted regulations for basketball and football, the University’s commitment to equity could demand increased funding for each of their 36 varsity sports. 

For more insight, The Daily spoke to three Stanford professors familiar with the subject and the ruling’s impact on The Farm. 

Significance of Alston

This ruling signals a significant shift in how courts interact with the NCAA, according to emeritus law professor William Gould IV.

“Gone is the idea that educational benefits will be exclusively interpreted narrowly,” said Gould, a specialist in labor and discrimination law. “And I think gone is the idea that [the NCAA is] immune from attempts by the athletes to get other forms of compensation in the future.”

Despite the Supreme Court’s rejection of the NCAA  argument — that amateur sports deserve an exemption from antitrust law — the organization must have expected a win in Alston, added professor of economics emeritus Roger Noll, an expert in sports regulations and antitrust law. 

“The fact that they didn’t plan for it and had no response to it indicates that they really thought they were going to win,” Noll said. “There’s no other conceivable explanation for why they would have not planned at all for losing.”

The NCAA will have to prepare for future losses, however. Gould said that the precedent set in this case could prompt future litigation against the monopoly. By rebuking the idea that the NCAA deserves special treatment under antitrust law, the Court left the door open to larger “pay-to-play” compensation based on an athlete’s schedule, number of games, length of season or hours competed. 

The Alston ruling specified that individual conferences have the leeway to compile distinct policies and restrictions, but any new regulations from the NCAA will have to be approved by a lower court. With no national policies, intense competition and bidding wars between conferences could ensue, both Noll and Gould said. 

“Conferences are going to develop different rules,” Noll said. “And there’s going to be competition between conferences for athletes based upon the package of stuff that they offer.”

Pressure on the PAC-12

Civil and environmental engineering professor and faculty athletics representative Jeffrey Koseff M.S. ’78 Ph.D. ’83 is involved in the negotiation and discussions that will take place within the Pac-12 as a response to the ruling. While he emphasized that no consensus had been reached, he said that decisions about implementing the ruling have proven difficult.

“This is not going to be an easy decision, just getting to uniformity within the Pac-12 itself, because there’s going to be a range of views that are going to be influenced by market, by location, by demographic and by the state in which you operate,” Koseff said. 

Priorities and constraints differ tremendously within the conference. Various universities will concede to stringent state laws; many schools will face tight budgets, and public pressure could impact each university’s position. And the size of athletic programs fluctuates significantly among the different schools; while the University of California, Berkeley supports 30 varsity teams, and the University of Colorado has just 17. 

Despite these disparate obligations, the Pac-12 will need to decide upon uniform regulations and answer multiple outstanding questions. 

“How do you decide who to give them to and how to give them?” Koseff asked. “Is it a reward for academic performance? Is it just a straight-up benefit for being part of a team? How much? Where does the money come from?”

According to Koseff, Stanford will continue to pursue the guiding tenet that student athletes should be treated, to the fullest extent possible, like other students. This goal, he said, is held by all schools in the Pac-12, and will always be reflected in their policies. 

“If we start with that, we have a basis for making decisions,” Koseff said. “At the end of the day, the decisions are not about the real fundamental issues; the decisions are more about the details of the execution.

However, given the complexity and weight of the issue at hand, Koseff doesn’t expect an answer from the Pac-12 until the end of the summer — and even then, the conference will likely offer guidelines rather than a detailed policy. 

Implications for Stanford

At Stanford, athletic budgets are smaller than those of most powerhouses, especially those in ultra-competitive conferences like the Big 10 and the Southeastern Conference (SEC).  In the 2019-20 academic year, the University of Alabama spent $52 million more than Stanford on athletics, despite offering just 17 sports. Other “super-schools” — University of Oklahoma, Michigan and Ohio State — commit far more to their athletic budgets than Stanford. And the University of Texas, this year’s Director’s Cup winner, dedicates a whopping $191 million into collegiate athletics annually.

Thus, even if the Pac-12 were to adopt looser restrictions on educational benefits, Stanford’s budget may prevent it from competing with other dominant athletic programs, said Noll. 

Looking into the future, offering education-related benefits could have mixed consequences for Stanford’s recruiting, Noll said. In the realm of traditional academic-related internships, the renowned academics, an established alumni network and a prime location in the heart of Silicon Valley gives Stanford an upper hand. 

“Can you imagine being in a better place in the universe than Silicon Valley to have academic-related internships?” Noll said. “Silicon Valley is full of companies run by Stanford alumni who are going to love to have related internships with diverse students.”

But “academic-related” is an ambiguous term, the NCAA warned, and overly competitive conferences could easily interpret the rule to allow for faux-education benefits with only vaguely academic purposes. For example, schools could provide a $10,000 computer for a computer science class or a $50,000 moog synthesizer for music, which athletes could then resell on Ebay for a hefty cash sum, Noll said. 

Stanford could suffer from this broad definition of “academic-related,” especially given its relatively slim athletic budget. 

“It’s certainly possible that schools that have lots of financial resources in athletics will do the things we don’t want to, and don’t have the financial resources to do, in the athletics program,” Noll said. 

For now, no binding decision has been made on the future of education-related benefits within the Pac-12 or at Stanford. And in the years to come, the NCAA could continue to cede power to student athletes, whether voluntarily or because of legal action, forcing further negotiation at the conference level. 

“I would hope Stanford is looking very carefully at how much they’re going to be following the suggestions and dictates of the NCAA on a number of matters in the future,” Gould said. “[The NCAA] came out of this just with egg on their face all over.”

High School contributor for the Daily Summer Workshop

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