How the grant-in-aid cap lawsuit ruling could radically alter college football

A recent lawsuit could open the door for radical changes to pay scales for college football players. Who is the biggest winner after the ruling?

A landmark court ruling on the limits of what institutions of higher learning can offer student-athletes in the form of remuneration could have some radical impacts on the sport in the upcoming years. There is a real question about what such a ruling could mean for all parties concerned, not just the players who would receive a greater proportion of the value generated by their labor but also schools, conferences, and the NCAA.

We have talked at length about opening up labor opportunities for football players in other recent editions of Sunday Morning Quarterback. A big reason why this lawsuit was initiated is the simple fact that we have the receipts showing the money is definitely there to pay student-athletes who put in full-time hours to generate revenue for the athletic department. But such a ruling could have downstream effects on things like coaching salaries, which continue to escalate as a result of serving as the only current labor costs for football teams.

This is as true when removing the discussion from the realm of the individual and looking at payment from an institutional standpoint. The lawsuit and the recent ruling could precipitate a massive revision of NCAA divisions that further divides the historical powerhouses of the sport from the less-wealthy schools currently occupying a contested space at the FBS level. The judgment could also open the door for another wave of realignment that would further remove the sport from its traditional geographic contexts.

So, while we have talked about this subject tangentially, the recent ruling puts everything into a new perspective that ties it all together. With that in mind, let’s use this week’s column to look at the lawsuit and how it could impact the sport moving forward.

First, we need to get a clear understanding of the lawsuit and the ruling.

The lawsuit, initiated through a 10-day bench trial in September 2018, was a class-action motion brought against the NCAA and major conferences that claimed limits on grant-in-aid payments to student-athletes constituted an antitrust action. The assertion of the plaintiffs was that the NCAA used its monopoly power to artificially restrict the benefits provided to young laborers producing massive sums of money for their schools.

The 104-page ruling that U.S. District Judge Claudia Wilken released publicly on Friday definitively articulates the position that the NCAA rules around compensating athletes violate antitrust law. No longer will the NCAA be able to serve as the dampener that determines a uniform set of restrictions on what student-athletes can receive in exchange for their participation in sports. Could it potentially lead to a revolution in the operation of college football’s most elite levels?

Steve Berman, one of the managing partners at the law firm that represented the former athletes in the class-action suit, was enthusiastic after the ruling. ““We have proven to the court that the NCAA’s weak justifications for this unfair system are based on a self-serving mythology that does not match the facts. Today’s ruling will change college sports as we know it, forever.”

Yes, college sports will be changing. But how they will change is a much more pertinent inquiry to pursue than just noting whether they will change. After all, the history of college football and of the NCAA is one of continual processes of reinterpretation, renegotiation, and change.

How will this impact the NCAA moving forward?

The biggest shift that this ruling will have for the sport of college football is that it will reconstitute the function of the NCAA. In the ruling, Judge Wilken granted an injunction sought by the class that prevents the NCAA from enforcing any limitations on compensation for student-athletes by schools or conferences in consideration for their athletic services that are related in any way to education-related expenses.

Outside of the purview of the NCAA, limitations on what constitutes acceptable grant-in-aid will no longer be determined at the discretion of the umbrella organization. Instead, these decisions are going to be decentralized and opened up to afford the opportunity to negotiate within conferences as to what their market can bear.

Worth noting is that this ruling did not alter established precedent on defining amateurism as it stood following the landmark Ed O’Bannon-led lawsuit from four years earlier. As such, there is still leeway for restricting cash payments to players that are “untethered from education-related expenses” in a way that would present a direct challenge to amateurism.

Because amateurism as defined by the NCAA remains in effect, the ruling does also keep open the opportunity for the NCAA’s enforcement arm to continue pursuing those types of under-the-table payments that regularly come up in cases such as the recent ruling against Adidas executives who funneled money to basketball recruits to play for Adidas-sponsored universities.

The NCAA technically lost the lawsuit. But while its enforcement in some areas will be forced to become less draconian and absolutist, Judge Wilken left broad latitude for the organization to remain relevant as an umbrella organization overseeing intercollegiate athletics.

How much benefit will this really provide for student-athletes?

While the former intercollegiate athletes who brought the class-action lawsuit technically won the case, it is harder to definitively articulate just how much they will really benefit from this ruling. Because compensation is still tethered to covering only education-related expenses, how much it benefits students who play sports will come down to the interpretation of what constitutes an education-related expense.

Nothing will change in terms of what student-athletes already received under the now-defunct NCAA rules. Tuition, room, and board will still be covered as before. But now there will be greater latitude for conferences to determine what else can be labeled as an education-related expense.

Greater funding for books, computers, and other course-related expenses will now be on the table. Funding for study-abroad opportunities is now possible. In terms of centering the focus back on the student aspect of being a student-athlete, it provides an opening for rethinking what institutions can do for the students who serve as their most public representatives on a national stage.

What remains in place, though, is the NCAA’s ability to restrict the ability for students to cash in on their own likenesses in ways that are not related to educational expenses. And depending on how conferences negotiate what constitutes education-related expenses, students could in reality see what ends up being limited gains.

How will this impact conferences moving forward?

In the end, the biggest beneficiaries of this ruling are going to be those conferences that are already positioned as the most powerful confederations in college football and which will only consolidate their power further in this new landscape. Without the NCAA mandating specifics about what schools can give to student-athletes, it now falls to each conference to make those decisions among their own members.

Barring collusion between conferences, a situation that would send this right back to court, there are bound to be disparities in what different leagues allow their members to offer prospects. Because Power Five teams produce on average more than six times the surplus value per player than is produced by Group of Five teams, for instance, it is likely that Power Five members will negotiate within their conference to offer even more incentive for recruits.

This also means that locking in favorable conference affiliation is only going to become more critical in the future for university athletic departments. While it might seem like Notre Dame finds itself in a favorable position, beholden only to its own interests on the recruiting trail, the Fighting Irish are also left with less surplus value per player to spread around than teams like Alabama.

Final thoughts

In the new landscape created by Judge Wilken’s ruling, conferences are the new stars of the show. Players are likely going to get more of the same, rather than getting any substantive movement toward regular payments for their labor. Schools will find ways to work around whatever definitions are ultimately determined by each conference.

Ultimately, the NCAA was both the big loser and the big winner in this case. They lost the lawsuit proper, but they gained the advantage of seeing amateurism itself go unchallenged. The NCAA is currently on the ropes thanks to this ruling, but it will likely emerge stronger in the long run as a result of the perpetuation of amateur rules.

It might not be the change you wanted to see in college football. But it is change nonetheless.