The NCAA's Continuing Anti-Trust Problem

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For decades, the NCAA enforced its amateurism rules with an iron fist and to the detriment of college athletes. In O'Bannon v. NCAA (2015), former UCLA basketball player Ed O’Bannon challenged a system that allowed the NCAA and its partners to profit from athletes’ likenesses while the athletes themselves received nothing. Similarly, in NCAA v. Alston (2020), the NCAA went so far as to cap even education-related benefits, and schools risked penalties for exceeding those limits. These cases make it clear that the NCAA was not just setting guidelines; it was enforcing a uniform compensation ceiling across all member schools, eliminating any real competition in the market for college athlete labor.

That enforcement was not theoretical. It was aggressive and highly visible. When Reggie Bush received improper benefits, the University of Southern California Trojans football program was hit with a two-year postseason ban, scholarship reductions, and vacated wins. At Ohio State Buckeyes football, players were suspended simply for trading their own memorabilia for tattoos, and head coach Jim Tressel ultimately resigned. The University of Miami Hurricanes football program faced sanctions for benefits provided by a booster. What ties these examples together is how broadly the NCAA defined “impermissible compensation,” with even relatively minor or indirect benefits triggering serious consequences.

At its most extreme abuse of power, the NCAA imposed the so-called “death penalty” on the Southern Methodist University Mustangs football in 1987, shutting down the entire program for a season after it paid players. Taken together, these enforcement actions show a system that did more than regulate college sports—it actively deterred any effort by schools to compete through compensation and punished athletes for trying to realize the value of their own labor. In practical terms, the NCAA maintained a uniform system that suppressed athlete earnings and restricted market competition, which began to look much less like amateurism and much more like a coordinated restraint on trade under § 1 of the Sherman Act.

After NCAA v. Alston (2020), the NCAA merely adjusted enough to comply. It formally allowed education-related benefits like graduate scholarships, laptops, and academic incentives, as required by the  Court. But beyond that, the NCAA made it clear it wasn’t giving up on amateurism. Instead of opening the door to full compensation, it drew a line and tried to preserve as much of the old structure as possible.

Around the same time, the NCAA rolled out its interim NIL policy, finally allowing athletes to make money off their name, image, and likeness. On paper, that looked like a major shift. In reality, it was more of a controlled release. The NCAA was reacting not just to Alston, but also to state laws that were already forcing change. And even then, the NCAA kept guardrails in place—no “pay-for-play,” limits on how schools could be involved, and guidance that kept schools from openly competing for athletes through compensation.

Section 1 of the Sherman Antitrust Act prohibits contracts, combinations, or conspiracies that unreasonably restrain trade. Here, the NCAA’s current NIL framework still satisfies the threshold requirement of concerted action. NCAA member schools are separate economic actors competing in the market for Division I athlete labor, and when they collectively agree on limits such as prohibiting pay-for-play or restricting how schools can facilitate NIL deals, that constitutes a horizontal agreement, even though it is done through the rules of the NCAA. Under American Needle, Inc. v. National Football League (2010), that kind of coordination among competitors is subject to § 1 scrutiny.

Applying the rule of reason, the NCAA’s current restrictions produce clear anticompetitive effects. Schools are still prevented from directly compensating athletes or fully competing through NIL-based incentives by NCAA Rule 10.1, which suppresses compensation and removes a key dimension of competition in the labor market by limiting competitors from competing for athletic competition. Even though third-party NIL deals are now permitted, the NCAA’s coordinated limits on school involvement effectively cap athlete earnings. In practice, this looks like price-fixing: competitors agreeing not to compete on compensation. As recognized in, the NCAA’s compensation rules operate as restraints on trade in a labor market, not just benign eligibility rules.

If the NCAA’s NIL restrictions are found to violate § 1 of the Sherman Act, the most appropriate remedy is targeted injunctive relief prohibiting the NCAA from enforcing rules that restrict member schools from competing on athlete compensation. Consistent with Alston, courts should enjoin only those restraints that produce anticompetitive effects while preserving any remaining procompetitive aspects of college athletics. The court should issue declaratory relief confirming the illegality of the challenged restrictions. Although treble damages are available under the Clayton Antitrust Act for suppressed athlete compensation, such monetary relief is secondary to forward-looking injunctive relief designed to restore competitive conditions in the labor market.

The NCAA’s pro-competitive justifications are unlikely to survive antitrust scrutiny. While it continues to invoke amateurism and consumer demand, Alston makes clear that those arguments do not justify broad compensation restraints, especially where less restrictive alternatives exist. Accordingly, the NCAA’s current NIL regime remains vulnerable to challenge as an unreasonable restraint of trade under § 1 of the Sherman Act.

*The views expressed in this article do not represent the views of Santa Clara University.