Antitrust Class Action Alleges NCAA, Power Five Conferences Illegally Suppress Athlete Compensation

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A proposed class action claims the Power Five conferences have conspired with the National Collegiate Athletic Association (NCAA) to unlawfully suppress compensation paid to college athletes.

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The 31-page antitrust lawsuit says that by following the NCAA’s allegedly anti-competitive bylaws—which prohibit member schools and conferences from sharing revenue with athletes—the Southeastern Conference (SEC), Pac-12 Conference, Big Ten Conference, Big 12 Conference and Atlantic Coast Conference (ACC) have prioritized profits over player welfare.

The suit alleges that the defendants, who generate billions from television contracts and broadcasts of NCAA games, effectively run a price-fixing “cartel” that exploits the primary source of their enormous income—college football and basketball players.

“Defendants, via the NCAA rules that the schools and conferences have adopted, have forbidden the sharing of television or other revenue with the very people who deserve it the most,” the case argues. “Meanwhile the NCAA’s president made nearly $3 million last year.”

According to the complaint, college athletes would receive a significant portion of the revenue generated by their efforts were it not for the NCAA’s bylaws, which the filing claims unlawfully prohibit paying players in order to restrict competition in the labor market.

“Because of [the defendants’] horizontal restraint on compensation, [the plaintiff] and class members are being robbed of significant sums of money that they deserve,” the lawsuit contends. “The amount of money paid to [the plaintiff] and class members in the form of scholarships and similar education-related benefits is miniscule compared to the television and other revenue coming in, and the percentage pales in comparison to the percentage of revenue paid to athletes in leagues that lack such a restraint.”

The NCAA’s rules require member schools’ players to maintain “amateur status” when participating in Division I athletics, the suit explains. Per the case, an athlete can lose this status by receiving “pay in any form” for their labor, including salary payments, gratuity, cash awards and shares of television or other revenues.

Though the NCAA recently began to allow athletes to be compensated for their names, images and likenesses (NIL), the governing body still penalizes violations of its “amateurism” bylaw, the complaint shares. A player who violates this rule loses the opportunity to participate in NCAA events, while a non-compliant member school likewise faces disciplinary action, such as suspension or termination from the association, the filing relays.

Moreover, other member schools are barred from competing in athletic events with those that have violated NCAA bylaws, the lawsuit claims, adding that this practice is a “quintessential way of enforcing a cartel’s rules: through an agreement to boycott an entity that fails to follow the rules.”

As the suit tells it, the defendants have seen exponential revenue growth in recent years thanks, in large part, to television rights agreements with broadcasters.

“Combined, the Power Five Conferences have signed contracts that will pay them more than $20 billion to broadcast their games on television,” the case shares, stating that television revenues have increased by approximately 90 percent.

However, the complaint argues that “thousands of football and basketball athletes at the conferences’ schools provide the labor that fuels these multi-billion dollar deals.”

“It is the athletes that the viewer tunes in to watch,” the filing contests. “Yet the athletes are not being paid their fair share of this multi-billion dollar revenue, or any of the other revenue, even though they—the athletes—through their labor, are the most significant driver of that revenue.”

Rather than giving players a share of the immense profits, college athletics programs have, instead, drastically increased spending on coaching salaries, new staff and the development of sports facilities, the lawsuit contends.

In a competitive market, players would receive compensation that fluctuated with market forces, the suit says. Absent the defendants’ anti-competitive restraints on athletes’ pay, these players would also see their compensation increase as competition and revenues soar, the case claims.

“The wage suppression has gone on for decades, and it is time for it to come to an end,” the complaint charges.

The lawsuit looks to represent anyone who, during the applicable statute of limitations period, worked as a full-athletic-scholarship athlete in football, men’s basketball or women’s basketball at an NCAA Division I school that is a member of one of the Power Five conferences, or at the University of Notre Dame—an independent school in football that has a Football Bowl Subdivision (FBS) team.

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