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Related: About this forumNCAA agrees to pay $208 million settlement in antitrust case
The NCAA and 11 major athletic conferences announced Friday night they have agreed to pay $208.7 million to settle a federal class-action lawsuit filed by former college athletes who claimed the value of their scholarships was illegally capped.
The settlement still must be approved by a judge and it does not close the antitrust case. The NCAA said in a statement the association and conferences "will continue to vigorously oppose the remaining portion of the lawsuit seeking pay for play."
The settlement will be fully funded by NCAA reserves, the association said. No school or conference will be required to contribute.
The original antitrust lawsuit was filed in 2014 by former West Virginia football player Shawne Alston. The case was later combined with other lawsuits and covers Division I men's and women's basketball players and FBS football players who competed from 2009-10 through 2016-17 and did not receive a cost-of-attendance stipend.
Read more: http://www.orlandosentinel.com/ct-ncaa-scholarship-value-lawsuit-spt-20170204-story.html
JonLP24
(29,322 posts)The most common type of cartel is an agreement among competitors not to sell their product below a fixed price that will generate monopoly profits for the parties to the agreement. But another type of cartel, termed monopsonistic (from the Greek words for one and purchasing of food) rather than monopolistic (one seller, versus one buyer in a monopsonized market), is an agreement among competitors not to pay more than a fixed price for a key input, such as labor. By agreeing to pay less, the cartel purchases less of the input (and perhaps of lower quality), because less is supplied at the lower price (and suppliers may lower quality to compensate, by reducing their costs, for the lower price they receive).
The National Collegiate Athletic Association behaves monopsonistically in forbidding its member colleges and universities to pay its athletes. Although cartels, including monopsonistic ones, are generally deemed to be illegal per se under American antitrust law, the NCAAs monopsonistic behavior has thus far not been successfully challenged. The justification that the NCAA offersthat collegiate athletes are students and would be corrupted by being salariedcoupled with the fact that the members of the NCAA, and the NCAA itself, are formally not-for-profit institutions, have had sufficient appeal to enable the association to continue to impose and enforce its rule against paying student athletes, and a number of subsidiary rules designed to prevent the cheating by cartel members that plagues most cartels.
As Becker points out, were it not for the monopsonistic rule against paying student athletes, these athletes would be paid; the monopsony transfers wealth from them to their employers, the colleges. A further consequence is that college teams are smaller and, more important, of lower quality than they would be if the student athletes were paid.
One might ask why colleges choose to collude on the student athlete dimension rather than on some other dimension, such as tuitionagreeing to minimum tuition levels, or maximum scholarships. The answer I think lies in my earlier pointthe justification (specious though it may be) that paying student athletes would corrupt the educational process, an argument that draws on a tradition of admiration for amateurism even in adult athletic competition, as in tennis until 1968. Efforts to fix the price for a college education would encounter sharper antitrust challengesand indeed the Ivy League schools were forced by antitrust litigation to drop their attempt to limit competition in scholarship aid, a form of price fixingin effect colluding on tuition discounts, which is what a scholarship is.
http://www.becker-posner-blog.com/2011/04/monopsony-in-college-athleticsposner.html