How the NCAA Could Join MLB in an Extremely Exclusive Club

Guest Post by Derek Helling

As the sports world awaits the ruling of Judge Claudia Wilken in Alston v. NCAA, her ruling is likely merely the overture for this drama. Her opinion is almost guaranteed to be appealed to the US 9th Circuit Court of Appeals regardless of what it entails.

In the 9th is where the possibility lies for a ruling that could entrench the parameters of college athletics and put the NCAA on equal footing with one of the most powerful entities in the US as far as antitrust law is concerned, Major League Baseball. To understand this possible course of events, it’s necessary to understand the precedent which could be drawn upon.

How MLB’s Antitrust Exemption was Created

In 1922, the US Supreme Court ruled that MLB is not subject to the Sherman Antitrust Act. The reasoning, originally crafted by Judge Kenesaw Mountain Landis at the district level, was that baseball was merely a game and not involved in interstate commerce. Because the nature of the sport was recreational and not commercial, the court decreed, the Sherman Act could not be applied. MLB’s antitrust exemption has been strengthened on several occasions since, although the Curt Flood Act of 1994 did provide some restriction to it. As an interesting aside, Landis was rewarded for crafting MLB’s exemption with the title of the first commissioner of MLB.

Those facts are relevant to Alston because some very similar language has appeared in recent court decisions regarding the NCAA. One decision comes from the same court that will hear the appeal of Wilken’s decision in Alston and the other is the 7th Circuit Court.

Appeals courts from different circuits are free to offer differing opinions on similar matters. It isn’t uncommon for appeals courts to evaluate the opinions of sister courts in their own rulings, however. The 7th Circuit recently issued an opinion in Deppe v. NCAA which contained some language that could prove influential.

Deppe v. NCAA Highlights Pertinent Language

Deppe was a 2018 case challenging the NCAA’s year-in-residence rule on antitrust grounds. Peter Deppe played American football at Northern Illinois University and sought to transfer to the University of Iowa after NIU made a coaching change with the new coach deciding not to offer Deppe a scholarship. Iowa’s scholarship offer was contingent upon Deppe being able to take the field immediately, but the NCAA’s year-in-residence rule required Deppe to attend Iowa for a year prior to him being eligible to punt for the Hawkeyes.

In its ruling, the 7th referenced a Supreme Court case, NCAA v. Board of Regents. NCAA v. Board of Regents arose when in the early 1980s, the NCAA negotiated a TV rights deal with ABC and CBS for American football games and attempted to sanction member institutions who negotiated their own broadcast deal with NBC. Despite determining that the NCAA was in violation of the first section of the Sherman Act in this instance, the Supreme Court did include in its opinion that in all other aspects the NCAA, “needs ample latitude to preserve the amateur traditions of college athletics.”

The 7th drew upon this ample latitude to preserve the product of college sports ideology in its opinion in Deppe, determining the NCAA’s transfer rules promote competition between its member institutions. While the opinion made no mention of exempting the NCAA from the Sherman Act in order to provide that ample latitude to preserve amateurism, it could be said that it was not yet necessary to make that determination in Deppe.

Ample Latitude was Seen Previously

The language highlighted was echoed nearly identically by the 9th, the same court which will hear an appeal of Wilken’s ruling in Alston, in 2015’s O’Bannon v. NCAA. If it’s not uncommon for circuit courts to consider the opinions of their sisters in their decisions, it’s even more common for circuit courts to reference their own previous opinions.

In O’Bannon, the 9th also referred to Regents in its decision, identically stating that the NCAA needed to be given ample latitude to preserve amateurism. The 9th also found many of the NCAA’s bylaws to be pro-competitive, citing opinions from sister circuits. For those reasons, the 9th reversed Wilken’s injunction allowing NCAA-member institutions to compensate their athletes with cash up to $5,000. Again, the 9th did not discuss the possibility of exempting the NCAA from the Sherman Act altogether in O’Bannon, but it again could be argued that the stakes had not yet risen to that level.

Alston Might Force the Issue

Alston could be seen as that escalation of the stakes. Whereas O’Bannon challenged NCAA bylaws regarding compensation for the usage of athletes’ images, likenesses and names and Deppe challenged transfer rules, Alston is going for the jugular of direct compensation restrictions. The potential reward comes with risk for the plaintiffs.

If the 9th takes the same misguided approach to college athletics as courts in the early 20th century took toward baseball, regarding college athletics as nothing more than extracurricular activity for a special group of college students and not a commercial product, it could easily arrive at a similar conclusion that providing the NCAA with the ample latitude it needs to preserve that amateur quality requires an exemption from the Sherman Act.

The respect that several courts seem to have for their understanding of amateurism, however misguided it may be, and the issues at stake in Alston could create the perfect storm necessary to provide an exemption from the Sherman Act for the NCAA. In this way, Alston could actually backfire as far as the plaintiff’s interest goes by entrenching the current definition of amateurism for the foreseeable future, barring an act of Congress. This result may be largely unprecedented, but not wholly impossible.