Posted on March 30, 2023
The Ivy League’s Ban on Athletic Scholarships: An Honest Run at “Education Through Athletics”[1] or An Illegal Price-Fixing Agreement?
Jessica Kinnamon
Comments Editor
Jessica is a 3L from Hutchinson, Kansas. She attended Yale University as an undergraduate, where she earned a B.A. in Ethics, Politics & Economics. Jessica is the President of the Federalist Society, on Moot Court Council, and is a Lawyering Skills TA. After graduation, Jessica is clerking on the U.S. Court of Appeals for the Sixth Circuit and the U.S. Court of Appeals for the Fifth Circuit.
“Yale doesn’t hesitate. Barahman up ahead. One second. Fires up a shot from near half court, and got it! Roxy Barahman wins it [against Harvard] with a three for the Bulldogs. 65–62. And a mosh pit right on half-court as the crowd goes wild in New Haven.”[1]
For many, this sequence would be the realization of a life-long dream; for anyone, it is the defiance of all odds. About one percent of high school basketball players go on to play at the NCAA Division I level.[2] Recent Ivy League acceptance rates range from 3.4% to 6.2%.[3] And the likelihood of single-handedly breaking a full-court press to defeat Harvard in buzzer-beating fashion is, well, also quite low.[4]
Generations of Ivy League athletes just like Barahman have defied the odds to obtain world-renowned educations.[5] But nothing in life comes free––including an Ivy League education through athletics. A decades-old agreement between all eight Ivy League universities bans athletic scholarships and reimbursement for education-related expenses.[6] The Ivy League aims to treat its athletes as “full members of the student body, with no special privileges . . . .”[7] As such, Ivy League athletes may be awarded needs-based financial aid alone.[8]
As of March 7, 2023, the Ivy League’s ban on athletic scholarships and reimbursement faces a full-court press of its own. Current and former Brown University basketball players have filed a class action lawsuit against the Ivy League.[9] According to their complaint, the Ivy League is “in violation of Section 1 of the Sherman Act” by and through its ban––something the complaint calls an illegal “price-fixing agreement.”[10]
Section 1 of the Sherman Act “sets forth the basic antitrust prohibition against contracts, combinations, and conspiracies ‘in restraint of trade or commerce’” among states.[11] Violations of this section are either per se or “rule of reason” violations. Quintessentially anti-competitive agreements are per se violations and do not require courts to consider market effects or the defendant’s intentions.[12] But if a challenged agreement is not per se illegal, courts apply a “rule of reason” analysis.[13] The rule of reason analysis requires courts to determine whether the challenged agreement impacted the defendant’s market power and, if so, whether the anti-competitive effects on market power outweigh pro-competitive effects,[14] considering factors such as intent and motive.[15] A challenged agreement “unreasonably restricts trade” when pro-competitive effects are outweighed.[16] The Ivy League’s ban on athletic scholarships and reimbursement is, according to the putative class action, both per se illegal and a violation of the “rule of reason.”[17]
There is little doubt this putative class has merit––especially in light of recent Supreme Court decisions like NCAA v. Alston.[18] In Alston, the Court unanimously found the NCAA violated Section 1 of the Sherman Act when it limited the education-related benefits universities could provide their athletes.[19] The NCAA insisted its limitations were justified because “amateurism” was central to the product of collegiate athletics,[20] but the Supreme Court was unconvinced.[21] Justice Kavanaugh, in a concurring opinion, put the problem clearly: “Nowhere . . . in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate.”[22] The NCAA was not an exception.[23]
Putative class representatives now argue the Ivy League is not an exception either,[24] and for good reason. Athletic scholarships are education-related benefits because they cover tuition and other education-related expenses, like room and board. Athletic scholarships are also fundamental features of inter-program competition in collegiate athletics when they vary in quality and quantity between universities. Yet, the Ivy League wholly bans athletic scholarship and reimbursement on the grounds that its athletes be “full members of the student body, with no special privileges . . . .”[25] In other words, all eight Ivy League universities agree not to pay their athletes in athletic scholarships and reimbursement on the theory that Ivy League athletics is defined by not paying their athletes in athletic scholarships and reimbursement. Without citing “amateurism” in name, this logic seemingly mirrors the NCAA’s argument in Alston. For that reason, it may prove just as “circular and unpersuasive.”[26]
[1] Mission and Values, Princeton University, https://goprincetontigers.com/sports/2017/7/24/education-through-athletics (last visited Mar. 14, 2023).
[1] Ivy League Digital Network, Yale nails buzzer-beater to stun Harvard in wild finish, ESPN (Feb. 1, 2019), https://www.espn.com/video/clip/_/id/25907501; Mission and Values, Princeton University, https://goprincetontigers.com/sports/2017/7/24/education-through-athletics (last visited Mar. 14, 2023).
[2] Estimated probability of competing in college athletics, NCAA https://www.ncaa.org/sports/2015/3/2/estimated-probability-of-competing-in-college-athletics.aspx (last visited Mar. 14, 2023).
[3] 2026 Ivy League Admissions Statistics, Ivy Coach, https://www.ivycoach.com/2026-ivy-league-admissions-statistics/ (last visited Mar. 14, 2023) (noting that Cornell University, University of Pennsylvania, and Princeton University have not yet published relevant data).
[4] To be sure, it was not the opponent that made this Hollywood ending particularly unlikely. This is a challenging play in any circumstance. That is why Barahman’s shot landed at number two on SportsCenter’s Top 10 Plays of the Week in February 2019. Read more about the awe of Barahman’s shot at https://yaledailynews.com/blog/2019/02/06/mister-just-roxy-being-roxy/.
[5] The motto of Princeton University’s athletic department is “Education Through Athletics and Competitive Excellence.” Mission and Values, Princeton University, https://goprincetontigers.com/sports/2017/7/24/education-through-athletics (last visited Mar. 14, 2023). Other Ivy League athletic departments have similar mission statements. See, e.g., Harvard Athletics Mission Statement, Harvard University Athletics, https://gocrimson.com/sports/2020/5/5/mission-statement.aspx (last visited Mar. 23, 2023); Yale Mission Statement, Yale University, https://yalebulldogs.com/sports/2019/6/25/information-mission.aspx (last visited Mar. 14, 2023); Department of Athletics and Physical Education Mission Statement, Cornell University, https://cornellbigred.com/sports/2007/7/11/MissionStatement.aspx (last visited Mar. 14, 2023).
[6] Ivy League Agreement, Dartmouth University, https://admissions.dartmouth.edu/glossary-term/ivy-league-agreement (last visited Mar. 16, 2023).
[7] NCAA Rules: A Guide for Ivy Alumni and Friends of Athletics, The Ivy League, https://ivyleague.com/sports/2017/7/28/information-compliance-index.aspx (last visited Mar. 15, 2023).
[8] Ivy League Agreement, Dartmouth University, https://admissions.dartmouth.edu/glossary-term/ivy-league-agreement (last visited Mar. 16, 2023).
[9] Class Action Complaint, Choh v. Brown University, No. 3:23-CV-00305 (D. Conn. Mar. 7, 2023).
[10] Id. at 6.
[11] U.S. Dep’t of Just. & Fed. Trade Comm’n, Antitrust Enforcement Guidelines for International Operations 2.1 (1995), https://www.justice.gov/atr/antitrust-enforcement-guidelines-international-operations (quoting 15 U.S.C. § 1).
[12] For example, a horizonal price-fixing agreement is a quintessentially anti-competitive agreement and would constitute a per se violation. United States v. Trenton Potteries Co., 273 U.S. 392, 399 (1927); United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 223 (1940).
[13] See NCAA v. Alston, 141 S. Ct. 2141, 2155 (2021) (applying the “rule of reason” analysis to the NCAA’s limitation on education-related compensation rather than discerning anti-competitive effects in the “twinkling of an eye”).
[14] See Herbert Hovenkamp, The Rule of Reason, 70 Fla. L. Rev. 81, 131–36 (2018) (explaining that courts across the country approach the “rule of reason” as a “‘balancing’ of procompetitive and anticompetitive effects.”); but see Michael A. Carrier, The Rule of Reason: Bridging the Disconnect, 1999 BYU L. Rev. 1265, 1364 (1999) (noting that the balancing of pro- and anti-competitive effects occurred in only 4% of anti-trust cases where the “rule of reason” applied).
[15] See Bd. of Trade of City of Chicago v. United States, 246 U.S. 231, 238 (1918) (listing many relevant facts courts should consider in determining whether a challenged agreement “merely regulates and perhaps thereby promotes competition” or “destroy[s] competition”).
[16] 15 U.S.C. § 1; Nat’l Soc. of Pro Engineers v. United States, 435 U.S. 679, 696 (1978).
[17] Class Action Complaint at 7–8, 32–48, 49–55, Choh v. Brown University, No. 3:23-CV-00305 (D. Conn. Mar. 7, 2023).
[18] Alston, 141 S. Ct. 2141 (2021).
[19] Id. at 2151–52, 2166.
[20] Id. at 2152, 2159.
[21] Id. at 2159.
[22] Id. at 2169 (Kavanaugh, J., concurring)
[23] Id. at 2166.
[24] Class Action Complaint at 9–10, 29, 55, Choh v. Brown University, No. 3:23-CV-00305 (D. Conn. Mar. 7, 2023).
[25] NCAA Rules: A Guide for Ivy Alumni and Friends of Athletics, The Ivy League, https://ivyleague.com/sports/2017/7/28/information-compliance-index.aspx (last visited Mar. 15, 2023).
[26] Alston, 141 S. Ct. at 2167 (Kavanaugh, J., concurring) (finding the NCAA’s argument on amateurism “circular and unpersuasive”).
