(Editor’s Note: What follows is an edited transcript of a panel discussion that took place two weeks ago at the Sports Lawyers Association meeting in Chicago. Warren Zola, Executive Director of the Carroll School of Management, Boston College, moderated the discussion, which featured, among others Matt Mitten, Director of the National Sports Law Institute at Marquette University, Donald Remy, Chief Legal Officer for the NCAA, and Gary Roberts, former dean at the Indian University School of Law and the country’s foremost expert of antitrust issues as they relate to the sports industry. Other speakers were Tim Epstein, a partner with Smith Amundsen, and Marc Isenberg, an author of various sports law books.)
After a brief introduction, Zola asked Roberts to comment on current litigation.
Gary Roberts
“The O’Bannon case is a confusing muddle. I frankly don’t understand what the relevant market is. I have always thought that was a pretty weak antitrust case. The Keller and Hart cases, which were straight publicity rights cases, were much stronger on the law.
“The Alston and Jenkins are very straightforward. They are basically saying the NCAA rules are price fixing in the student athlete labor market. There’s not much doubt that the rules do fix the compensation, however you define that. They do put a cap on how much they can receive. Whether or not that is exempted from antitrust laws is another issue. “
Matt Mitten
“There’s a significant shift that is occurring. These are all eligibility restrictions, which for years the courts have said are not economic restraints, but are pro-competitive as a matter of law. The shift have been away from per se legal to recognizing, what I think is correct, that universities are engaged in economic competition among themselves for services of elite football and men’s basketball players. The courts, in the O’Bannon litigation, are saying you are going to have to prove that amateurism makes college sports a different brand from professional sports, and that that is what consumers want.
“ different models to look at.
‘The first is the amateur-education model, which defines most NCAA sports, except Division 1 football and men’s basketball. The NCAA says that participation should be motivated primarily by education, as well as the physical and mental benefits of participation. Football and basketball go well beyond that. A lot of them want to play professional, probably all of them.”
“The second is the commercial education model is more suitable to football and basketball. There’s nothing wrong with this. These sports have been a victim of their own success. This is problematic because of the unionization issue and/or the recent antitrust decisions that would force college sports to shift again.
“The third is the commercial professional model. There’s some real significant differences. The key thing is keeping the cross-subsidization, maintaining funding for these other sports. The best way is not through piece-meal antitrust litigation, but through a legislative proposal, which Professor (Steve) Ross and I have suggested. This would preserve the educational aspect of college sports, which makes it a different brand from professional sports. So it could merit an antitrust exemption.”
Roberts
“You used the term cross subsidization. An economist would call it a wealth transfer. It is basically money being generated by the student athlete and that money basically goes to large salaries for coaches and to fund a lot of minor sports that don’t generate revenue. As a side observation, the money is generated primary by young African-American males and being transferred to middle and upper class athletes, primarily females because of Title IX. I’m not against that. I wouldn’t have been a FAR for 25 years if I were. But there are some fundamental questions about what that model looks like. And if you are waiting on Congress to act on this and end up in the right place, that may be fantasy.”
Warren Zola
Are we spending too much time on unionization issue? What could happen?
Donald Remy
“The question you posed has both a legal and practical answer. From a legal standpoint, what could happen is you have a refusal to bargain with the union and the case proceeds through the courts. You could ultimately have a holding of the law as it has been applied.
“From a practical perspective, what happens? You have to look at some of the concerns that are being raised by student athletes and the membership about student athlete rights. At the same time you have these cases that might overlap with one another. So you have the membership trying to find the right balance, which allows student athletes to compete against other student athletes in a fair manner.”
Roberts
“But Donald at the margins you have a problem, because if anybody thinks the Kentucky basketball team is comprised of student athletes they are smoking something. I don’t think we have a had a sophomore on the Kentucky basketball team, much less a graduate. At the very fringes of collegiate athletics, you have these issues that make the athletes not look like students. Maybe you are talking about 1 percent, but there is a real perception that they are not students.”
Remy
“The percentage you mentioned is important. While I don’t know the statistics of the Kentucky men’s basketball team, I do know that there are 15 student athletes on that team and not all of them are going to the NBA. Many of them will spend four years there and get a degree. Those kids will have the education experience that is designed by the NCAA. And that is what we are trying to preserve. You can’t govern for that small segment of the population.”
