PAYING PLAYERS
NO AGENT RULE
Suppose Joey DeBernardis, who
chose to attend Penn State
despite being drafted in the 38th
Round by Florida, is drafted
again by Florida after his junior
year
• What can he do in negotiating
with the Marlins, while still
preserving his college eligibility?
Erie Co. Judge’s Ruling
• NCAA breached contract because rule is
contrary to public policy of Ohio
• NCAA breached contract because rule is
arbitrary and fails to achieve clear line of
demarcation between pros and amateurs
Agree? How does an arbitrary rule breach
Oliver’s contract rights?
Framework for player restraints
as set forth in Oklahoma
Regents case
1) NCAA restraints not per se illegal, although they involve
competing college programs, because extensive
arrangements among teams necessary for competition in
college football to exist
2) NCAA unreasonably restrains trade where result is prices
higher, output lower, and both unresponsive to consumer
demand
3) Under rule of reason, NCAA then has “heavy burden” to
justify restraint
4) Court accepts that competitive balance is a legitimate
goal, but challenged rule must be ‘tailored’ to accomplish
goal
5) rejects distinction, at least for commercial restraints,
between college and professional restraints based on
non-profit status or non-commercial goals
NO DRAFT RULE
• Banks majority: rule minor addition
to general rules and is “vital”
• Dissent: unreasonable agreement to
force player to choose between draft
and eligibility
Who is right?
If these rules are illegal, what about
academic progress requirements?
NO AGENT/ NO DRAFT
JUSTIFICATION
Although, as McCormack observes, NCAA doesn’t
have to “distill amateurism to its purest form,” in
light of all these exceptions, is Banks correct that
the no-draft/no-agent rules is “vital” to protect the
"unique product" of college athletics?
More generally, do the rampant violations of NCAA
rules, with no apparent commercial detriment,
demonstrate that consumers don't find
amateurism to be a element that gives college
football its distinctive popularity?
Mitten & Ross Regulatory
Solution
• Lots of problems with big-time
intercollegiate sports
– Misallocation of $ from academics to athletics
– Lack of real education for many football and
basketball players, although most won’t have
pro careers
– economic exploitation of elite players
Antitrust Law Regime Not Optimal
Solution
Cross subsidization of women’s and non-revenue sports
not a procompetitive economic justification, despite social
benefits
Remedy economic exploitation of a few elite players at the
expense of most others
Piecemeal antitrust analysis of specific NCAA rule or
application will not broadly resolve systemic problems
inherent in the production of intercollegiate athletics
Prohibits unreasonable conduct, but doesn’t require
reasonable conduct or socially optimal policies (e.g.,
ensuring football and basketball players receive
educational and other non-economic benefits)
Proposed Congressional Intercollegiate
Athletics Reform Legislation
1. Mandatory substantive requirements:
a) at least a 4-year athletic scholarship with limited
university termination rights;
b) medical care or health insurance for all sports-related
injuries + scholarship extensions for injuries; and
c) elimination of NCAA requirement that Division I
universities operate ≥ 14 sports
Proposed Congressional Intercollegiate
Athletics Reform Legislation
2. Creation of an independent intercollegiate athletics
oversight commission with the following features:
a) authorization to propose non-binding rules regulating intercollegiate
athletics originating of its own accord or with any intercollegiate
athletics stakeholder;
b) Congressionally required consideration along with adoption,
rejection, or modification of specific proposals; and
c) procedures providing transparency and access to all intercollegiate
athletics stakeholders, including student-athletes and members of the
public, akin to Administrative Procedure Act’s notice and comment
requirements for informal rule-making.
3. A grant of antitrust immunity to the NCAA, athletic conference, or
university for conduct taken in compliance with the Commission’s rules,
provided that any intercollegiate athletics stakeholder allegedly harmed
by one of these entity’s conduct in compliance with the subject rule(s)
may seek independent arbitral review to ensure the rule(s) have a
reasoned basis consistent with the public interest.
Commission Should Consider
Additional Regulations
• paying players up to 25th percentile of
student-body income from family or other
sources
• mandatory remedial assistance to at-risk
students
• add’l scholarships to returning students
• incentives to graduate
• pooled revenues as financial incentives to
schools with high graduation rates