Planet Money - Amateur Hour at the Supreme Court

Episode Date: June 4, 2021

College athletes are considered amateur players. And amateurs don't make any money. But can they get more education paid for at least? | Subscribe to our weekly newsletter here.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

This is Planet Money from NPR. If you play a competitive sport in college, your experience is probably more athletic than academic. Valentino Daltoso plays football at UC Berkeley. I play offensive line. Jaden Grant plays at Oregon State. I play defensive back. Jaden and Valentino have played against each other many times. They're at different schools, but their football schedules are pretty similar.

Yeah, so a typical Tuesday, because that's usually the first day that we practice. Get up in the morning at about 6 a.m., be there for 6.30, either preventive rehab or rehab for energy. You know, something that you're just trying to keep rehabbed, so you're in there for treatment. And then you'll have meetings around 8 a.m. There's a position-specific meetings, special teams meetings. It makes you get breakfast before that and all that stuff. You go to class in between, you come back. You'll have about 10 minutes in between there and

practice. After that, hit the training room again for rehab and then have meetings later in that day. And then in the evening, just get what homework that you can done. Now, actually playing football, those Saturday games, that is like the dessert part of being a college athlete. The rest is kind of a grind, though. Mentally, physically, a lot of injuries, surgeries. Jaden's already had three surgeries. My freshman year, first year in there, I tore my labrum, so I was out for the season.

The next year following, I tore both my labrums. In my third year, spring ball, I ran into the steel fence at practice, fractured my vertebrae. But once again, once you get to those dessert moments, like the games on Saturdays, that's what makes you sit back and reflect and be like, it's all worth it. Are you going to enter the draft? Are you going to go pro? I guess I'll cross that bridge when I get there. But that's always been my goal and my dream. That's the dream.

And if you do want to go to the NFL, make it to the pros, you kind of have to play in college first. And that's not true for every sport. Yeah, like if you're a really good golfer, tennis player, you can go pro whenever you want, at age 14 even. Shout out Serena Williams. But if you want to go to the NFL, you have to play in college for at least three years. So there's basically no other path to the NFL. Yeah. And so it's almost like you kind of have like a monopoly there. If you want to get paid playing football, you have to put in your time here, put your body on the line here to maybe reap those rewards later on.

Did somebody say monopoly? Hello and welcome to Planet Money. I'm James Sneed. And I'm Sarah Gonzalez. Only 2% of college football players ever make it to the NFL to reap those rewards. And the NCAA, which has a monopoly on college football, has always limited what college players can get in exchange for playing ball. Players say the NCAA should allow colleges to compete for their talent by offering these new perks that are very specifically related to education.

The NCAA says that's a change that would ultimately lead to full salaries, which would kill amateur college sports forever. Today on the show, the argument has gone all the way to the Supreme Court, which will essentially decide what it means to be a student athlete. Plus, Monopoly's lesser-known cousin, monopsony. That is fun of a game. For years, the NCAA has called all the shots in Division I college football and men's and women's basketball.

They've decided what players can and cannot get to still be considered amateurs. And the whole idea behind amateurism is that you play for the love of the game, not for money. But recently, the courts have stepped in to allow a few changes, which, added up, are starting to look a little less amateur. Worried that the future of college sports is on the line, The NCAA is trying to pull off a Hail Mary. We will hear argument this morning in case 2512, National Collegiate Athletic Association versus Alston. This case started seven years ago with a player named Sean Alston.

I actually remember watching Sean Alston play in the Orange Bowl like 10 years ago. He played for West Virginia and they killed Clemson. Alston scored two touchdowns. He was a pretty good player, but he never went pro. And a couple years after Sean Alston graduated and stopped playing football, he brought a case against the NCAA about tuition and housing and how athletic scholarships didn't actually cover the true cost of college. Since then, Alston's case has evolved and a lot of things have happened. There have been many court cases about whether college athletes should get paid or whether they should be able to make money on the side off of their own name and image and likeness,

like because they're the star running back or whatever. But the case we're talking about today is not about whether a defensive lineman in college should be able to get his own sneaker deal, which would never actually happen because D-linemen don't get that kind of love. The case we are talking about today is about whether that D-lineman should be able to get a laptop for college or free grad school education things. In 2019, California's Ninth Circuit Court said, yeah, they should be able to get those things. They ruled that the NCAA has to allow colleges to offer players awards for academic achievements

and non-cash education-related compensation. That's what it's called. We'll get to what that is in a minute, but the NCAA has appealed the whole ruling all the way to the Supreme Court. Good morning, Mr. Chief Justice, and may it please the court. And let me just say, Supreme Court justices, they play at another level. What is it precisely that you are complaining about in this court? What's the line? What's the sentence? There is no nonsense on this court.

You try to run out the clock, the justices will shut you down. I'll explain its rationale in a minute, which allows... You'll explain it in less than a minute. I'll explain it in less than a minute. So brutal. Ruthless. So here is our less than one minute version of the backstory. This case is about competition.

The NCAA has very specific rules about what colleges can and cannot offer players. And for years, the rule has been colleges can offer players tuition, housing, books. But that's it. And whatever you got for tuition, housing and books definitely could not exceed the cost of attending school. So players could never like pocket any extra little money or anything like that. But the previous court said the NCAA and colleges can no longer get together to limit benefits related to education. They said that's anti-competitive. Now colleges do spend millions of dollars on the best coaches and fancy weight rooms and training facilities. So they do compete in this way.

But besides that, the NCAA hasn't really allowed colleges to compete for players in a way that would more directly benefit the player because every school can only offer tuition and housing and books, right? So the thinking is that if colleges could approach high school players with these new packages, like, hey, we'll pay for you to get a computer and we'll pay for you to go to grad school even, then maybe colleges would compete more fully. I think that was more than a minute. Anyways, the NCAA looks at all this and is like, whoa, whoa, whoa, whoa. This will totally change what it means to be a student athlete. Here's their big opening argument. For more than 100 years, the distinct character of college sports has been that it's played by students who are amateurs, which is to say that they are not paid for their play.

Seth Waxman is one of the lawyers for the NCAA, and the crux of their argument before the Supreme Court is that the real difference between professional athletes and college athletes is that college athletes are amateurs. And amateurs do not make money, they say, ever. They are not compensated. But at some point, Justice Amy Coney Barrett says, well, they do get free tuition and housing. We just heard that. So why don't you count that as pay? Why do you get to define what pay is? Well, producers get to define their product. They get to define the features of their product. The NCAA's product, in this case, is college football.

They're basically the only producers for the big powerhouse conferences. And for decades, the NCAA has been saying tuition and housing don't count as pay. And we get to decide these things. Our definition, which has been stable over decades, is that it is you're not being paid to play if you receive an allowance for the actual and necessary expenses of your education. Actual and necessary expenses. The NCAA says if a college wants to cover $30,000 a year for a player's tuition and $15,000 a year for a player's housing, that's not really money. That's just a necessary expense. But the NCAA says that if players start getting these new forms of education

related compensation, then that would be considered real money, not the fake tuition money that they already allow. And the first change the previous court approved does feel a little like real money. This is about academic awards. The previous court said if a college athlete does really well in class, not a game, class, then their college can give them awards. That's one of the things that the NCAA is appealing at the Supreme Court. We cannot restrain schools from awarding to every Division just for being on the team, $5,980 per year, God help us. $5,980 a year in academic awards. God help us. I mean, you're talking about $6,000 as if it's some exorbitant amount.

That was Justice Brett Kavanaugh. And the lawyer for the students, Jeffrey Kessler, he tells the court, no, actually, you cannot get this award just for being on a team. He says it's for things like your GPA. With all due respect to my colleague, it has to be for academic achievement. And the conferences, for example, could individually say it has to be a 3.0 or you have to make progress to get your degree or other things. It's not just for being on a team. The lawyer for the students told justices the NCAA already allows players to get $5,980

in athletic awards. If you win a bowl game, if you're the MVP, if you have some other achievement, they allow you to get $5,980. So the previous court told the NCAA, if you already allow players to make this in athletic awards, you can't stop them from getting it in academic awards. The court said, then you can't, NCAA, use your monopsony power in a labor market to prevent the schools and conferences from giving as much, not more,

as much as they already allow. Monopsony power. Lawyer for the students just threw a penalty flag on the play. Okay, monopsony is when there's only one buyer. Its better-known cousin, Monopoly, is when there's only one seller. The NCAA is both. They're the only ones selling the product of collegeopoly, is when there's only one seller. The NCAA is both. They are the only ones selling the product of college football, and they're the only ones buying the labor of college athletes.

Now, workers don't usually think of themselves as selling anything. But we are. We are selling our labor. And when there's only one buyer of labor, workers have no bargaining power. Think of Monopsony as a town with one employer, a gummy bear factory. If there's only one factory in town, everyone has to work there. There's no other factory to turn to. You have to accept whatever the gummy bear factory offers.

And the players are arguing that they're stuck in the gummy bear factory. They have to sell their labor to the NCAA. There's worse places to be stuck. It's like a gummy bear factory with like a lot of getting hit in your head repeatedly. Gummy bears with concussions? Yeah, it's a gummy bear factory with concussions. There's another way to think about what's going on here.

And that's that schools that are naturally competitors as to athletes have all gotten together in an organization, an organization that has undisputed market power, and they use that power to fix athletic salaries at extremely low levels, far lower than what the market would set if it were allowed to operate. This time Justice Elena Kagan throws a flag. Looks like we've got a cartel in the field. Those are pretty good whistles, Sarah.

A little short. Too short. Blow the whistle. Now, here are the other money-related issues, little threats that the NCAA thinks will blow up the whole amateur system. Think of them as fitting into three categories. One of the threats is about, let's call it school supplies. It's about whether colleges can pay for an athlete's laptop or science equipment if they're a chemistry major or their saxophone if they're in a music class.

This one is short, pretty straightforward. The previous court said, yep, colleges can offer players that. The NCAA is appealing. The next issue is about grad school and vocational schools. This one is mostly about opportunities for players in case football doesn't work out for them. Remember, 98% of college football players don't make it to the pros. And college football players actually have lower college graduation rates than your average student. So some of these players put in all this work on the field and don't even walk away with a degree. The idea behind this one is that colleges could now approach high school athletes and say,

listen, if you play for us and then never make it to the NFL, we'll pay for you to go to grad school, law school even, at any school you want. This is what we can offer you to try to get you to want to play for us and make us a ton of money. The previous court said the NCAA can't stop colleges from offering this. And if you're one of the college athletes who don't graduate, colleges can offer them an opportunity to do something else, like, I don't know, become a mechanic after their football careers are over. The lawyers for the students told the justices they should uphold the decision. The vocational schools we're talking about is if you don't graduate, as many of these athletes don't, that maybe they can go to a blue-collar vocational school and at least have a career.

The NCAA won't allow that. The NCAA is appealing this grad school vocational school ruling. And the last money-related threat that they're appealing is about education-related internships. The previous court said the NCAA can't limit internships, including internships post-football, meaning even if they're no longer playing football. Again, the NCAA is against this. The NCAA's lawyer says, if we aren't able to place limits on these internships, companies are going to do things

like pay the former star quarterback an outrageous salary, which will blur the line even more between professional paid athletes and student athletes. And once that starts happening, where's it going to end? The next lawsuit says we want treble damages because we weren't given unlimited postgraduate internships. And then there's another lawsuit that says, well, why does it have to be just postgraduate internships? Thank you. To be honest, the NCAA's lawyer kind of took a beating. All of the justices across ideology were pretty much on the same page about everything except this, the possibility of endless litigation. Many of the justices told the lawyer for the students,

if we side with you and against the NCAA, the system could all spiral. I think we need to think about what the next case would look like if we rule in your favor in this case. That's Justice Kavanaugh. What you've heard before from some of my colleagues, a kind of floodgates argument, like what's next? It's just going to go up and up and up. And pretty soon, it will just be a regular labor market. And that's Justice Kagan again. Now, there is a valid argument here. These perks could lead to more perks that could eventually become real

salaries. And regardless of how you feel about salaries, salaries could change the nature of college sports. After the break, does anybody care? All right, to be clear, colleges don't have to offer any of these new education-related perks. The previous court just said they can no longer all get together to collude with the NCAA and agree not to offer any of these perks. But not all schools will be able to offer these perks. There are 1,100 schools in the NCAA, and according to the NCAA, only about 25 of them make money off their athletic departments. Justice Clarence Thomas asked a lawyer for the NCAA, only about 25 of them make money off their athletic departments. Justice Clarence Thomas asked the lawyer for the students, don't the new perks create an unfair advantage?

For those schools that have more modest circumstances, it would seem that they would begin to, the bigger schools would begin to cherry pick. The lawyer for the students goes, well, those modest schools don't compete with the big schools now. Some of them spend millions of dollars on their football programs, like $700,000 a year on the salary of the weight coach, like on the salary of the guy who coaches players how to lift weights. That's more than what a lot of college presidents make. The NCAA didn't really address this at the Supreme Court. What they kept arguing was that the

previous court's ruling would completely change college sports. Players wouldn't be playing for the love of the game anymore. They would be playing for the perks. And if that happens, the NCAA says consumers, the people who live and breathe for the purity of money-free college football, would be totally turned off. They say those consumers will no longer want to watch their product. But Justice Kagan pointed out that the lower court actually looked at this, at whether paying college athletes would make consumers stop watching. It basically took a lot of evidence as to that question, as to whether the lack of pay- play was anything that consumers wanted. And what it found

was that consumers didn't really care about that. Your expert failed to show anything to the contrary. Essentially, you're saying that the differentiating feature is the lack of pay to play, but the evidence in this trial suggested exactly the opposite. The Supreme Court is expected to make a decision in June or July. Thank you, counsel. The case is submitted. Whether or not you see college football as a bastion of pure sport that needs defending from the perversions of the free market, college football is already a multi-billion dollar industry built on the labor of its players. They are enormously valuable. The NCAA has tried for decades to hold back the

influence of money on its players, but even if the Supreme Court chooses to side with the NCAA, that money is still going to flow. And student players like Valentino Daltoso with the crazy schedule, he says there is nothing amateur about what he does. It is a job. Kind of, I mean, in every sense of, you know, the time demand, the pressure, you know, to perform. It's a high stakes job. And really, I don't see any reason why we shouldn't be paid.

Valentino says a bunch of people are making money and getting paid already. Everyone else around us is paid. ESPN putting on games, conferences, you know, making money, you know, coaches' salaries, administrators, you know, all this stuff. Valentino says the only ones not getting money-ish things? The players. Valentino won't benefit from the court's decision. This is his last year playing college football.

He and Jaden did end up getting their degrees. They're in grad school, actually, but they both got an extra year to play college football because of the pandemic. If you want us to do more sports stories, pitch us, pitch us. Batter up. Does that work?

Get it? And if you have questions for us, now is a great time to ask us and let us solve your economic mysteries. Maybe it's something specific to your town or your work or your life, and we can help you. So get in touch with us. You can email us at planetmoneyatnpr.org. That's planetmoneyatnpr.org. We're also on Instagram, Facebook, Twitter, TikTok, all the places. We're at Planet Money. Today's show was produced by Alexi Horowitz-Gazi, edited by Brian Erstadt. Our supervising producer is Alex Goldmark. I'm James Sneed.

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