NCAA could take big hit in scholarship anti-trust trial
Posted: Tuesday March 27, 2007 12:14PM; Updated: Tuesday March 27, 2007 11:54PM
Has the NCAA illegally fixed the price of an athletic scholarship below the cost of a college education? Or, is the NCAA trying to protect amateurism and competitive balance for its member schools?
A jury in Los Angeles will answer these questions in a trial that will begin on June 12. The jury's answer could be expensive for the NCAA. Very expensive.
Lawyers representing all Division I football and basketball players (there are 11,500 of them) claim that the athletes are shortchanged an average of $2,500 a year because of an arbitrary NCAA limit on scholarships.
If they're right, the athletes are entitled under anti-trust laws to triple damages, a potential liability for the NCAA of more than $86 million for a single year. If the trial includes four years of scholarships, as the players' lawyers suggest, the damage multiplies to $344 million. The NCAA's annual budget is $465 million.
The class action lawsuit is based on an NCAA rule that specifies what may be included in a "grant-in-aid," the NCAA's term for a full-ride scholarship. The GIA does not include school supplies, recommended text books, laundry expenses, health and disability insurance, travel expenses and incidental expenses. Studies of GIA economics have shown that the shortfall averages $2,500 per athlete.
NCAA officials claim the GIA must be limited in order to produce a balance of competition among Division I schools and to protect amateurism.
"For us to produce fair and interesting competition for consumers and fans, we must have a level playing field," said Elsa Cole, the NCAA's top lawyer. "If we eliminate the limit on GIAs, the playing field will not be level. The wealthier schools will be able to recruit and to accumulate all of the better players. The poorer schools would be dropping sports or cutting back on sports because they could not pay the increased GIA."
Cole also defended the GIA cap as a method for ensuring amateurism. "We do not want to pay any more than the cost of education," she said, "because we do not want to make our student-athletes professionals."
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