The Supreme Court ruled unanimously that current financial rules violate anti-trust regulations. There has been increasing scrutiny on the college system, run by the National Collegiate Athletic Association (NCAA), due to the vast amounts of money it generates in comparison to the minimal financial benefits given to its athletes. However, this ruling which is an amalgamation of numerous cases brought forward by current and former athletes, has ruled that colleges can no longer ban modest financial packages to students and suggested colleges were colluding to effectively reduce the money available for student athletes.
Top coaches and directors at major US universities often earn seven figure salaries with the universities themselves making huge sums from broadcasting and merchandise sales. The athletes merely receive a full scholarship with a room and basic equipment. When these athletes are bringing in such vast sums of money and seeing very little of it questions are bound to be raised over the ethics of this business model. The Supreme Court case was not on college athletes being paid wages as such but was centered on the NCAA restrictions on “education-related benefits” which include computers, internships and other perks. It was adjudicated that these restrictions violated antitrust laws.
This ruling could increase the power and pull of major and richer universities as they will be able to provide better financial packages to students. These institutions tend to already have an advantage due to money invested in facilities and coaching, but greater financial benefits would widen the gap even further. There are also questions over how this extra expenditure will be spent across the 24 competitive college sports teams. Of these only two (men’s basketball and men’s American football) bring in large revenues and in effect subsidize the other teams. Although over half of NCAA students are white, most of the star players in men’s American football and basketball are black which raises over how these funds should be distributed. A study of the economics of college sports concluded that affluent white students were benefitting financially from the performance of poorer black students. Although the ruling is welcome, educational benefits alone will not help these students as much as using their names and likeness will with their high profiles likely to hold significant earning potential.