Update on White v. NCAA

Robin Acton and Richard Gazarik of the Pittsburgh Tribune-Review have an interesting article on a class action lawsuit filed on behalf of over 20,000 current and former Division 1-A football and major Division 1 basketball players from 144 schools against the NCAA ("NCAA: United Steel Worker Union is trying to Make Athletes 'Paid Employees,' 3/11/2006). In White v. NCAA, the plaintiffs allege that the NCAA violated Section 1 of the Sherman Act, which prohibits illegal restraints of trade, by precluding member colleges from offering athletic scholarships up to the "full cost of attendance" (meaning all of the actual costs of attending college). Presently, scholarships may cover tuition, room, board and required books but not incidentals, such as phone bills, laundry, school supplies, and travel expenses--expenses that the plaintiffs claim are collectively worth between $2,500 and $3,500 a year per student.

The lawsuit also seeks elimination of earning caps for NCAA players, better health care coverage, higher death benefits, and legal assurance that athletic scholarships--which under NCAA bylaws are renewable each year at the discretion of coaches and injured athletes routinely lose them--become guaranteed for four years. If successful, White v. NCAA could require the NCAA to pay more than $100 million in damages, which would be trebled under antitrust law to over $300 million. The plaintiffs are represented by Attorney Marc Seltzer (pictured to left) of Susman Godfrey in Los Angeles, while the law firm Bingham McCutchen is representing the NCAA. I analyzed this lawsuit last February in a post entitled Incidental Matters: Antitrust Class Action Filed Against NCAA.

Acton and Gazarik interview a number of prominent experts for their story, including Professors Richard Southall of the University of Memphis, Stephen Ross of the Penn State Institute for Sports Law, Policy and Research, and Rodney Fort of Washington State University.

Here are some excerpts:

Richard Southall, assistant professor of sports and leisure commerce at the University of Memphis, said highly paid coaches exercise too much control over the players who are struggling financially while making millions for their schools. "Either it's a free market, or it's not," Southall said. "The NCAA says it can't constrain coaches, but yet it can constrain athletes. It's very hypocritical."

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"If you're a really poor kid, you can get a full grant-in-aid and additional money from Pell grants. If you're not desperately poor and not wealthy enough for your parents to send you an extra couple hundred dollars a week, you still fall short," said Stephen Ross, director of the Penn State Institute for Sports Law, Policy and Research. Ross said a star athlete can generate as much as $1 million annually by attracting fans. In a free market, he said, that athlete could be worth a salary of $100,000 per year.

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Rodney Fort, a sports economics professor at Washington State University, said studies show that playing Division 1 football or basketball is a full-time job. He said scholarship athletes, who fit the description of an employee in IRS guidelines, can lose their "jobs" without guarantees.

For more from the article, click here.