United States: Federal Appeals Court Rejects Payments To College Athletes

Last Updated: October 8 2015
Article by Scott D. Schneider

This morning, the 9th Circuit Court of Appeals ruled that the NCAA is subject to antitrust laws and that its payment rules are too restrictive in attempting to maintain amateurism. However, in what can only be deemed a victory for the NCAA, the court also ruled that antitrust law requires only that the NCAA permit its schools to provide up to the cost of attendance to their student-athletes, and nothing beyond that (O'Bannon v. NCAA).

This case may very well end up in front of the U.S. Supreme Court, but for now, the NCAA has won this round in its simmering fight with former student-athletes.

The Lawsuit And Lower Court Decision

In 2009, Ed O'Bannon, a former star basketball player at UCLA, sued the National Collegiate Athletic Association (NCAA) for using his name and image in television broadcasts and video games. He was joined in this effort by a group of former student-athletes in the same boat. They initiated an antitrust challenge to the NCAA's amateurism rules that prevent athletes from being paid for participating in college sports. 

Their legal team conceded that players sign waivers allowing the NCAA to use their likenesses, but argued that players should be nevertheless entitled to a piece of the revenue because those contracts are worth billions of dollars, and because student-athletes have no choice but to sign the waivers if they want to take the field and play. 

The NCAA countered that college athletes are amateurs, and that anything amounting to pay-for-play would professionalize the players. It argued that such a scheme would transform college sports into something unrecognizable and hurt the college sports business model.

Following a lengthy trial in 2014, District Court Judge Claudia Wilken ruled that the NCAA's long-held practice of barring payments to athletes violated antitrust laws. She ordered that schools should be allowed to not only offer full cost-of-attendance scholarships to athletes, but also cover cost-of-living expenses that were not currently part of NCAA scholarships. Further, she ruled that colleges should be permitted to place as much as $5,000 into a trust for each athlete per year of eligibility. The NCAA appealed this ruling, leading to today's decision.

NCAA Loses A Battle, But Wins The War (For Now)

The NCAA made two substantive arguments on appeal. First, it contended that the Supreme Court's 1984 decision in NCAA v. Bd. of Regents of the Univ. of Oklahoma was binding precedent, holding that the NCAA's amateurism rules are valid as a matter of law. Second, it argued that these amateurism rules are not subject to antitrust law because they do not regulate commercial activity. The 9th Circuit rejected both arguments, and affirmed that the amateurism rules are reviewable pursuant to antitrust law.

This first part of the 9th Circuit's decision can be considered somewhat of a setback to the NCAA. The panel of judges concluded that, because the NCAA regulations are subject to antitrust scrutiny, they must be tested in the crucible of the "Rule of Reason." In conducting this review, the court concluded that the NCAA's rules have been more restrictive than necessary in order to maintain its tradition of amateurism in support of the college sports market. 

However, in reviewing the lower court's ruling, the 9th Circuit handed the NCAA a victory in the second part of the decision by concluding the District Court judge went too far in allowing cash payments to the student-athletes. The appeals court opinion made clear that "the difference between offering student-athletes education-related compensation and offering them cash sums untethered to educational expenses is not minor; it is a quantum leap." The 9th Circuit panel stated that once that line is crossed, they could not see a way for amateurism to remain intact, as there would be no defined stopping point. If such payments were allowed, they concluded, the NCAA would have surrendered its amateurism principles entirely and "transitioned from its particular brand of football to minor league status." 

Where Do We Go From Here?

The bottom line: NCAA rules which bar payments to student-athletes have survived for the time being. However, challenges still exist. There is a good chance that the O'Bannon plaintiffs seek review of today's decision before the U.S. Supreme Court, which could rule on the matter as early as next year.

Moreover, a broad antitrust lawsuit filed by noted sports lawyer Jeffrey Kessler is currently pending in a federal court in California. That case seeks to overturn the NCAA's amateurism rules and effectively create a free market for players to be paid in college football and basketball.

The court's fairly robust defense of amateurism principles is a good sign for the NCAA in how the 9th Circuit will ultimately address Kessler's challenge. On the other hand, the 9th Circuit was obviously mindful of the pending litigation, as today's O'Bannon decision was very careful to state that it was a limited decision confined to the particular challenge before it.

If you have any questions about this case, or how it may affect your business, please contact your Fisher & Phillips attorney or one of the attorneys in our Education Practice Group.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Scott D. Schneider
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.