Supreme Court rules against NCAA, opening door to significant increase in compensation for student athletes

Mississippi Rebels and Xavier Musketeers players run by the NCAA logo at mid-court.

By Ariane de Vogue and Chandelis Duster, CNN

(CNN) -- A unanimous Supreme Court said on Monday that student athletes could receive education-related payments, in a case that could reshape college sports by allowing more money from a billion-dollar industry to go to the players.

Justice Neil Gorsuch delivered the opinion of the court.

College sports raise billions of dollars from ticket sales, television contracts and merchandise, and supporters of the students say the players are being exploited and barred from the opportunity to monetize their talents. In 2016, for example, the NCAA negotiated an eight-year extension of its broadcasting rights to March Madness, worth $1.1 billion annually.

In a concurring opinion, Justice Brett Kavanaugh said the NCAA is essentially acting "above the law" in how it treats athletes.

"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," Kavanaugh wrote. "And under ordinary principles of antitrust law, it is not evident why college sports should be any different. The NCAA is not above the law."

The NCAA did not immediately respond to a request for comment.

As things stand, schools are allowed to provide tuition and fees, room and board, books and other expenses related to the cost of attendance. They are permitted to make payments for certain athletic participation awards, tutoring and study abroad expenses related to a course.

A district court preserved limits on compensation unrelated to education, but ruled that caps on some education-related benefits violate anti-trust laws. The ruling was largely upheld by the 9th US Circuit Court of Appeals, although the schools did not make immediate changes waiting for the legal process plays out.

"So, once more, if the NCAA believes certain criteria are needed to ensure that academic awards are legitimately related to education, it is presently free to propose such rules -- and individual conferences may adopt even stricter ones," Gorsuch wrote.

The lower court said that the NCAA must also permit student athletes to receive unlimited non-cash "education-related benefits" including post-eligibility internships. The students can also receive annual payments up to $6,000 if they maintain academic eligibility.

Seth Waxman, a lawyer for the NCAA, urged the court to reverse the lower court decision, arguing that it would cause money to flood into a few schools under the guise of "education related spending." He said it would allow, for instance, post-eligibility internships worth thousands of dollars further blurring the line between amateur and pro sports.

"These new allowances are akin to professional salaries," he said at oral arguments.

Jeffrey Kessler, a lawyer for Football Bowl Subdivision and Division 1 men's and women's basketball players behind the challenge, dismissed such concerns, telling the justices that the model of amateurism can be maintained even when providing more compensation to the students for education-related expenses.

He urged the justices to agree with the lower court in an opinion that he believed was carefully tailored, freeing the conferences and the schools to compete for student athletes by supporting their academic achievement.

This story has been updated with additional information.

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