Federal Judge Overturns NCAA|Restrictions on Athletes’ Income

"Dr. Emmert himself noted that much of the popularity of the NCAA's annual men's basketball tournament stems from the fact that schools from all over the country participate 'so the fan base has an opportunity to cheer for someone from their region of the country," Wilken wrote. She added: "This evidence demonstrates that the NCAA's restrictions on student-athlete pay is not the driving force behind consumer interest in FBS football and Division I basketball. Thus, while consumer preferences might justify certain limited restraints on student-athlete compensation, they do not justify the rigid restrictions challenged in this case."

Wilken also found the NCAA's compensation restrictions do not promote competitive balance, as the NCAA argued at trial.

"The academic consensus on this issue is not surprising given that many of the NCAA's other rules and practices suggest that the association is unconcerned with achieving competitive balance. Several witnesses testified that the restrictions on student-athlete compensation lead many schools simply to spend larger portions of their athletic budgets on coaching, recruiting, and training facilities.

Wilken wrote at length on the issue, noting that a head football coach for a major conference can make more than $1.5 million a year.

"The fact that high-revenue schools are able to spend freely in these other areas cancels out whatever leveling effect the restrictions on student-athlete pay might otherwise have. The NCAA does not do anything to rein in spending by the high-revenue schools or minimize existing disparities in revenue and recruiting," the judge wrote.

Wilken said that the NCAA does nothing to interfere with advantaged universities' lavish spending.

"This same sentiment underlies the NCAA's unequal revenue distribution formula, which rewards the schools and conferences that already have the largest athletic budgets. Revenues generated from the NCAA's annual Division I men's basketball tournament are distributed to the conferences based on how their member schools performed in the tournament in recent years. As a result, the major conferences - and the highest revenue schools - typically receive the greatest payouts, which hinders, rather than promotes, competitive balance."

The judge disagreed with the NCAA's contention that its anti-compensation rules are necessary to promote the integration of academics and athletics, and that paying student-athletes large sums could "create a wedge" between the student athletes and other students on campus.

"It is not clear that any of the potential problems identified by the NCAA's witnesses would be unique to student-athletes," Wilken wrote, citing testimony from Emmert that wealthy students raise the same problems.

"It is also not clear why paying student-athletes would be any more problematic for campus relations than paying other students who provide services to the university, such as members of the student government or school newspaper," Wilken added.

Attorneys for both sides were unavailable for comment.

NCAA Chief Legal Officer Donald Remy issued a statement late Friday saying, "We disagree with the court's decision that NCAA rules violate antitrust laws. We note that the court's decision sets limits on compensation, but are reviewing the full decision and will provide further comment later."

The NCAA said it would appeal.

As for relief, Wilken's opinion says she favors a stipend for college athletes, as well as a share of the licensing revenue to be held in trust until they graduate.

Wilken rejected the plaintiffs' proposal that college athletes should be paid for endorsements, saying it could lead to commercial exploitation of student athletes.

The injunction prohibits the NCAA from preventing its member schools from "offering to deposit a limited share of licensing revenue in trust for their FBS football and Division I basketball recruits, payable when they leave school or their eligibility expires."

It adds: "To ensure that the NCAA may achieve its goal of integrating academics and athletics, the injunction will not preclude the NCAA from enforcing its existing rules - or enacting new rules - to prevent student athletes from using the money held in trust for their benefit to obtain other financial benefits while they are still in school."

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