UPDATE: Antitrust Lawsuits Against the NCAA Regarding Scholarships Are Advancing Through Court.

A federal judge decided not to consolidate two cases alleging the NCAA’s previous ban on multiyear scholarships and limits on football scholarships are illegal. By way of background, as of 2012, the NCAA gives colleges and universities the option to offer multiyear scholarships to all athletes. This amended a previous rule instilled in 1973, which only allowed for one year renewable scholarships.imagesFormer Gardner-Webb University quarterback, John Rock, filed a lawsuit against the NCAA in 2012 claiming these rules concerning the duration and limits of football scholarships are in violation of both state and federal antitrust laws. On August 28, 2014, a similar lawsuit was filed on behalf of former Colorado State kicker, Durrell Chamorro.

In an attempt to consolidate the Rock and Chamorro cases, the NCAA objected because the Chamorro matter “suffers from certain legal defects not present in the Rock complaint.” U.S. District Judge Jane Magnus-Stinson agreed with the NCAA and ruled the cases would not be consolidated.

Magnus-Stinson wrote that there are “material” differences between the Rock and Chamorro cases, noting that Chamorro pleads two classes and Rock pleads one class. Chamorro’s attempted class requires players to have received a “full scholarship, grant or tuition discount,” and Rock’s attempted class does not require receiving a full scholarship.

Interestingly from a legal point of view is that the Chamorro complaint, in an attempt to prove its antitrust claim, argues that the NCAA cannot use amateurism or competitive balance as procompetitive justifications for limiting the number of football scholarships. If competitive balance is determined to be a legitimate justification, Chamorro’s lawsuit offered five less-restrictive alternatives:

  • The NCAA could require revenue sharing among schools.
  • The NCAA could replace its current roster restrictions with new ones that actually increase competitive balance.
  • The NCAA could impose limits on facility spending, instead of permitting major schools to spend “tens of millions of dollars on facilities that lesser schools cannot hope to imitate.”
  • The NCAA could impose limits on recruiting budgets.
  • The NCAA could impose restrictions on alumni donations to the athletics department.

This case is in its infancy, but the legal arguments in the area of antitrust are getting interesting.

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