The Economics Of Amateurism: Breaking Down The Latest Lawsuit Against The NCAA

Posted by Forbes

The Economics Of Amateurism: Breaking Down The Latest Lawsuit Against The NCAA

By Thomas Baker

In what could prove to be a battle of economic experts, the NCAA is back in court and must once again defend its amateurism regulations from its own student-athletes. The current case is In Re: Grant-in-Aid Cap Antitrust Litigation and was initiated in the United States District Court for the Northern District of California by former NCAA student-athletes Shawne Alston and Justine Hartman.

The plaintiffs seek a declaratory judgment from the court that the NCAA’s rules that limit their compensation to the cost-of-attendance for their respective institutions violate the Sherman Antitrust Act. To do this, they will have to overcome a presumption that the NCAA’s amateurism rules are needed to maintain consumer demand in college sports. This is where the economic experts come into play and for the plaintiffs to prevail the court will have to place more credibility in their witnesses than the NCAA’s experts. The plaintiffs bring to the case two economists in Dr. Roger Noll and Dr. Daniel Rascher. To counter, the NCAA has retained their own accomplished economists in Dr. James Heckman and Dr. Kennith Elzinga.

Legal Background

Before the economic arguments from each side are broken down, a brief discussion of the relevant aspects of antitrust law and how they apply to this case is necessary. The Sherman Antitrust Act is a consumer welfare provision that exists to


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