Judges to decide fate of lawsuits over NCAA athlete compensation
APR 22, 2014 2:42p ET
Two anti-trust lawsuits that seek to upend the NCAA's current rules capping compensation for athletes at the cost of a full-ride scholarship are headed for a hearing in federal court in Chicago, where a panel of judges will decide whether they should be combined.
One suit, filed in California, seeks to remove the current cap on "grant-in-aid" -- the term for a full-ride scholarship -- and instead allow players to be paid the "actual cost" of education and even contemplates a day when schools would compete on the open market for the services of players. The other, filed in New Jersey, seeks to abolish the current system and allow the free market to determine the value of players -- perhaps leading to a system where schools engage in bidding wars in attempts to sign the best players.
Both suits were filed against the NCAA and the five "power conferences" -- the Atlantic Coast Conference, the Big 12 Conference, the Big 10 Conference, the Pac-12 Conference and the Southeastern Conference.
And both are on hold now until the question of whether they should be combined is answered.
A hearing on that question is scheduled May 29 before the U.S. Judicial Panel on Multidistrict Litigation, which is scheduled to meet that day in Chicago.
Last December, the same panel consolidated 11 lawsuits filed against the NCAA over its handling of concussions into a single suit.
The anti-trust suits come at a time when a discussion is raging about whether college athletes should be paid something in excess of the cost of a scholarship.
The California suit was filed by Shawne Alston, a running back at West Virginia from 2009 to 2012. In it, his attorneys note that big-time college football, particularly in the Football Bowl Subdivision, generates "billions of dollars a year in revenue."
"Not a single dollar of that revenue, however, would exist if it were not for the efforts of the Football Bowl Subdivision football players themselves," the complaint alleged.
According to the suit, a full-ride scholarship -- which covers tuition, housing, meals and supplies such as books -- often falls several thousand dollars short of covering the actual cost of attending college. Players are left without money for gasoline, food and other expenses they incur, the suit alleged.
"While players scrimp, coaches and universities most certainly do not," the suit alleged. "The average salary for major college football coaches is over $2 million, with some coaches earning over seven million. The top football schools earn enormous amounts from football."
It points to the University of Texas, which had $109 million in football revenue in the 2011-2012 fiscal year and claimed that the school had a "profit" of $81.7 million after the cost of fielding a team was deducted.
Alston's suit seeks to abolish the current system and to pay damages to players who competed in the past four years in the power conferences. The suit seeks "actual damages" as established at trial, and then triple damages on top of that.
The New Jersey suit was filed on behalf of four athletes, and seeks to include all players in the Football Bowl Subdivision and in Division 1 men's basketball.
It was filed by Martin Jenkins, a cornerback for Clemson University; Johnathan Moore, a basketball player at Rutgers University; Kevin Perry, a former tight end at the University of Texas at El Paso; and William Tyndall, an offensive lineman at the University of California.
Like the other suit, it alleged that the current system is generating billions of dollars in revenues -- and it accuses the NCAA and the power conferences of entering into "what amounts to cartel agreements with the avowed purpose and effect of placing a ceiling on the compensation that may be paid to these athletes for their services."
"The plaintiffs -- four current top-tier college football and men's basketball players, along with the class members whom the players seek to represent -- are exploited by defendants and their member institutions under false claims of amateurism," the suit alleged. "The defendants and their member institutions have lost their way far down the road of commercialism, signing multi-billion dollar contracts wholly disconnected from the interests of 'student athletes,' who are barred from receiving the benefits of competitive markets for their services even though their services generate massive revenues."
That suits seeks to abolish existing NCAA rules limiting compensation to "grant-in-aid" and stopping the governing body of college sports and the power conferences from stopping any school from "negotiating, offering, or providing remuneration" to football and basketball players "in compensation for their services as athletes."
It also seeks triple damages.
Following the May 29 hearing, it is expected that the panel will take several weeks to rule on the question of combining the suits.
In the meantime, both suits are on hold -- the NCAA and the five conferences do not have to file their answers to the suits until 30 days after a decision by the panel.