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NCCA Lawsuit Marks the Beginning of March Madness Week

It is quite the week for the National Collegiate Athletic Association (“NCAA”): not only has the NCAA Tournament begun, but also an antitrust class action lawsuit was filed this past Monday.   Four athletes, represented by Jeffrey Kessler, are alleging that the NCAA and five of the major athletic conferences (the Big Ten, Big 12, Pacific 12, Southeastern, and Atlantic Coast) are acting as a “cartel” and not abiding by antitrust laws.  Among those four named plaintiffs are Rutgers University basketball player J.J. Moore, University of California football player Bill Tyndall, University of Texas-El Paso football player Kevin Perry, and Clemson University football player Martin Jenkins.

“What we are saying is that it is fundamentally unfair for there to be rules that prevent athletes who create all of this to receive nothing in return” Kessler said.

The NCAA compensation cap does not allow college athletes in Division 1 basketball and the top tier of college football to receive any compensation for the billion of dollars in revenues they help generate. Instead, the rules allows the players only to receive payment in the form of room and board, tuition, and books.  The NCAA restrictions are alleged to violate antitrust laws by having no legitimate pro-competitive justification.  As such, the plaintiffs seek monetary damages for their economic harm as well as a declaration that the NCAA’s practice violates federal antitrust laws.

According to Kessler, schools are making “billions of dollars in revenues each year through the hard work, sweat and sometimes broken bodies of top-tier college football and men’s basketball athletes.”  It is no secret that Universities generate insurmountable wealth by negotiating television contracts and sponsorships with sports conferences. The court filing estimated that Clemson’s athletic department “generated more than 70 million in revenue, the vast majority of which came from football.”

The NCAA’s position is that the athletes are compensated in the form of free education.  However, most athletes never walk the stage for their own graduation and many don’t even make it to the NBA or NFL.  A report from the University of South-Carolina found that student athlete graduation rates are well below the general student body.  In that respect, college athletes are never compensated for their labor.

We will continue to monitor this case and apprise you of any developments.

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