Sunday, May 24, 2020

The NCAA wants an antitrust exemption from Congress so it can oversee name, image and likeness deals

See The NCAA’s Athlete Endorsement Plan Comes With a Long-Shot Demand by Laine Higgins and Louise Radnofsky of The WSJ.

This is related to last week's post NCAA Takes Another Court Hit on Athlete Compensation: The Ninth Circuit ruled that the organization’s restrictions violated federal antitrust law.

The NCAA still has rules against schools directly paying players. But players will be able to make money selling autographs, for example. One concern is that a player could go to an autograph show, and the organizers could pay them alot of money that is actually coming from their school. The NCAA wants to review such deals and limit what can get paid. But that sounds like an agreement among competitors to control prices.

Excerpts from the article:
"The NCAA has also said it would require athletes to disclose the terms of their endorsements deals via a clearinghouse that could be run by the NCAA, university compliance officials or a third party. Big East commissioner Val Ackerman, co-chair of the NCAA working group charged with creating the new plan, said the group hadn’t decided who might oversee the mechanism and whether it will be able to void a deal deemed excessive or corrupt.

“There was a desire to see what the market was saying so that if you did see something that was really extreme you would at least have a mechanism to take a look at that and pick out the red flags,” said Ackerman.

What recourse the NCAA would have to deal with those “red flags” is unclear. Ackerman suggested that the divisions could institute payment “gradations” that correspond to particular third-party income opportunities to make sure that “transactions are legitimate and don’t morph into payment that looks like disguised payment from the school to play college sports.” 

For instance, a volleyball player could make $500 for signing autographs at an event put on by a campus pizza shop, but perhaps not $500,000.

Antitrust experts say that introducing a clearinghouse with clearly defined compensation tiers could amount to price fixing, no matter if it is run by an independent entity or the NCAA."

"Ackerman’s working group suggested the NCAA Board of Governors solve its problem with a “safe harbor” exemption from antitrust law from Congress. Unfortunately for the NCAA, some of the lawmakers most interested in how it operates think that is a terrible idea.

“There is no way I would consider giving a blanket antitrust exemption in exchange for an incredibly limited compensation right for college athletes around name, image and likeness. It’s a non-starter,” said Sen. Chris Murphy, a Connecticut Democrat."

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