## Facts

- Current and former Division I FBS football and Division I men’s and women’s basketball student-athletes challenged NCAA and Division I conference rules limiting athlete compensation and benefits.
- NCAA bylaws capped athletics-based financial aid at cost of attendance and generally prohibited additional compensation except for specifically authorized benefits.
- The challenged restrictions included limits on education-related benefits and limits on certain cash or cash-equivalent awards for academic achievement.
- Plaintiffs alleged the NCAA and conferences operated as the only viable purchasers of elite Division I football and basketball athletic services, jointly depressing compensation below competitive levels.
- The case proceeded as consolidated multidistrict litigation; after summary judgment on agreement/restraint/interstate commerce elements, the court held a bench trial on Rule of Reason issues and remedy.

## Issues

1. Whether NCAA and conference compensation limits caused substantial anticompetitive effects in a relevant labor market for Division I football and basketball player services.
2. Whether preserving “amateurism” and consumer demand for college sports justified the challenged compensation limits.
3. Whether substantially less restrictive alternatives could achieve any legitimate objectives, and what permanent injunctive relief was appropriate.

## Decision

- The court found the NCAA’s restrictions on education-related benefits and certain academic-achievement awards violated Sherman Act § 1 under the Rule of Reason.
- The court concluded the rules functioned as a horizontal agreement among schools and conferences to cap athlete compensation, causing anticompetitive harm by depressing benefits below competitive levels.
- The court accepted preservation of consumer demand linked to amateurism as a cognizable procompetitive justification, but held the NCAA failed to show that caps on education-related benefits were reasonably necessary to that goal.
- The court rejected eliminating all compensation limits and allowed the NCAA to continue capping athletics scholarships at cost of attendance and to continue restricting compensation unrelated to education, including pay-for-play.
- The court entered a permanent injunction barring the NCAA from limiting non-cash education-related benefits schools may provide and permitting limited cash or cash-equivalent academic-achievement awards up to a defined cap, while allowing reasonable definitional and enforcement rules to prevent abuse.

## Legal Principles

- Horizontal agreements among competitors that cap compensation can violate Sherman Act § 1 when, under the Rule of Reason, they produce substantial anticompetitive effects in a properly defined market.
- Under the Rule of Reason, once plaintiffs show anticompetitive effects, defendants must prove procompetitive justifications, and the restraint must be reasonably necessary to achieve those objectives.
- Preserving consumer demand for a distinct college-sports product tied to amateurism can qualify as a procompetitive justification, but it does not immunize all compensation restraints.
- If less restrictive alternatives can serve legitimate objectives comparably while reducing anticompetitive harm, continued enforcement of broader restraints is unlawful.
- Injunctive relief may prohibit specific anticompetitive caps while preserving narrower limits and permitting enforcement rules that define permissible benefits and deter circumvention.

## Conclusion

The court held that NCAA and conference caps on education-related benefits and certain academic awards unlawfully restrained trade, enjoined those limits, and left intact the cost-of-attendance scholarship cap and restrictions on compensation unrelated to education, including pay-for-play.


In re Nat’l Collegiate Athletic Ass’n Athletic Grant-In-Aid Cap Antitrust Litig., 375 F. Supp. 3d 1058 (N.D. Cal. 2019)