By Dr. Robert J. Romano, JD, LLM, St. John’s University, Senior Writer
The colleges and universities that make up the Ivy League are some of the most prestigious in the world. Their reputation as elite educational institutions, however, is no barrier to claims that they have engaged in the unlawful practice of ‘price fixing’ in violation of Section 1 of the Sherman Act. That’s correct, on March 7, 2023, Tamenang Choh, a former Brown University basketball player, together with current player Grace Kirk, filed a one count complaint in the United States District Court for the District of Connecticut claiming that the eight Ivy League schools participate in a conspiracy in contravention of federal antitrust laws by not providing athletic scholarships to their Division 1 student-athletes.[1]
Since 1954, Ivy League universities have agreed that they would not offer student-athlete scholarships to its athletes with the original Ivy League Agreement stating as follows: “The members of the Group reaffirm their prohibition of athletic scholarships. Athletes shall be admitted as students and shall be awarded financial aid only on the basis of economic need.”[2] This position has been reasserted by the League on several occasions, first in 1977, again in 1979, and finally in 2017, when they collectively declared that “The principle of need as the basis for financial aid for student-athletes is a cornerstone of Ivy belief,”[3] and “All Ivy League institutions follow the common policy that any financial aid for student-athletes will be awarded and renewed on the sole basis of economic need with no differentiation in amount or kind based on athletic ability or participation.”[4]
Over this seventy-year period wherein the League was reasserting its commitment to the concept that student-athletes are ‘students first’ and should not be the benefactors of any financial benefits associated with an athletic scholarship, it was also engaging in commercial activities that resulted in substantial revenue being earned from ticket sales, broadcasting rights fees, and merchandises sales, to name a few. According to the lawsuit, this commercialization is evidenced in part by the fact that, in addition to the broadcasting rights fees earned from the League’s contract with ESPN, in 2016, Yale University entered into a ten-year branding rights agreement with Under Armour worth approximately $16.5 million, and in 2021 the University of Pennsylvania entered into a similar licensing arrangement with the apparel company, Nike.[5]
The lawsuit also highlights that as the commercialization within the Ivy League has become more substantial and lucrative over the past decades, the various restrictions imposed by the NCAA and its member intuitions, which the Ivy League is a part of, regarding college athletes’ compensation have been determined to be unfair and anticompetitive to those same athletes. The complaint references how the federal court rulings in both the O’Bannon and Altson cases were critical of the NCAA’s century long argument that compensation restrictions are necessary to separate amateurs from professionals, stating, “Businesses like the NCAA cannot avoid the consequences of price-fixing labor by incorporating price-fixed labor into the definition of the product”, continuing that “nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate . . . The NCAA is not above the law.[6]
In the end, the two athletes from Brown University claim that the Ivy League Agreement that precludes student-athletes from receiving athletic scholarships has caused them substantial injury because they ended up being responsible for the full tuition costs at one of the most expensive undergraduate institutions in the country. As stated, the ‘sticker’ price for tuition, room, board, and incidental expenses, the full cost of attendance, at an Ivy League institution exceeds $80,000 annually.[7] In addition, they are requesting that the court issue a “permanent injunction … enjoining defendants from abiding by the Ivy League Agreement or any equivalent horizontal agreement,” and asked that they, together with any other additional class members, be awarded “such other relief as the Court may deem just and proper.” In requesting such relief, the two student-athletes also underscore the point that the total financial endowments of all the Ivy League schools collectively, as of 2021, exceed $170 billion.
[1] Case 3:23-cv-00305 Document 1 Filed 03/07/2023.
[2] Ivy Manual at p. 39 (quoting the 1954 Ivey League Agreement).
[3] Id. at p. 5.
[4] Id. at p. 149.
[5] Case 3:23-cv-00305 Document 1 Filed 03/07/2023 at p. 32-33.
[6] NCAA vs. Alston, 141 S. CT 2141 at p. 2169, (2021).
[7] Case 3:23-cv-00305 Document 1 Filed 03/07/2023 at p. 6.
