Strictly Legal: Ivy League athletes bring class action lawsuit

Jack Greiner, partner of Faruki PLL

Just in time for March Madness, two Brown University basketball players have filed a lawsuit challenging the Ivy League’s policy to not award athletic scholarships as an antitrust violation. They are asking a Connecticut-based federal court to certify the action as a class action – which would open the case to any Ivy League athlete recruited since March of 2019.

Tamenang Choh played for Brown’s men’s basketball team from 2017 to 2022, and Grace Kirk has played for Brown’s women’s basketball team since 2020. They each were recruited to play a sport by at least one Ivy League school, and received full cost-of-attendance athletic scholarship offers from at least one other Division I college.

As a result of the Ivy League Agreement, however, Brown awarded them only need-based financial aid that did not cover either of their full costs of attendance—tuition, room, board, and incidental expenses— and paid them no other compensation or reimbursement for their athletic services to the school.

According to the complaint, the Ivy League Agreement not to award athletic scholarships is an illegal price-fixing agreement.  In the words of the complaint, “[i]t is a naked restraint of trade among horizontal competitors. The Ivy League Agreement has direct anticompetitive effects, raising the net price of education that Ivy League Athletes pay and suppressing compensation for the athletic services they provide to the [Ivy league schools]. Absent the Ivy League Agreement, these schools would determine unilaterally, and in competition with each other, how many athletic scholarships to provide, by sport, and in what amounts, and how much to compensate (either directly or through reimbursement of tuition, room, and board, or both) for athletic services.”

According to the complaint, Brown and the other Ivy League schools are subject to federal antitrust laws.  It notes, “the [Ivy League] Defendants operate as commercial enterprises, with each employing over 100 individuals in its athletic department or in positions relating to inter-collegiate athletic competition. The Council, the governing body of the Ivy League, coordinates the common rules, procedures, and initiatives among the University Defendants, including by setting the rules they must follow as part of the Ivy League athletic conference. The Council thus creates and enforces the rules the University Defendants agree to follow under the Ivy League Agreement.”

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It’s important to note here that a school’s decision not to award athletic scholarships isn’t the problem.  If any school – an Ivy or otherwise – decided on its own not to award athletic scholarships that would be one thing.  But it’s the concerted action among ostensible competitors that gives rise to the lawsuit.  If the complaint is right, there is a big financial incentive for the schools to enter this agreement – it makes their cost of athletics a lot cheaper, and it restricts competition.  That is precisely what antitrust laws try to prohibit.

The schools may argue that they have adopted the rule for altruistic reasons.  They may claim, for example, that they are seeking to balance the academic/athletic mix of its student body.  But the complaint is having none of it.  As it notes, “[d]efendants cannot reasonably claim to act with purely altruistic motives. Instead, seeking to maximize revenue (and prestige), the University Defendants monetize the athletic services that Ivy League Athletes provide, by participating in, and earning revenue from, intercollegiate athletic competitions, including ticket sales, television rights, merchandise sales, and increased donations from alumni. The Council negotiates and seeks to maximize revenue from broadcast rights for athletic competitions between teams from the University Defendants and distributes the revenues to the schools. The University Defendants also work assiduously to increase their multi-billion-dollar endowments, which have grown astronomically over the past three decades and which collectively exceed $170 billion.”

We’ll see what happens as the suit progresses, but the gauntlet has been thrown down.  This is taking March Madness to an entirely new level.

Jack Greiner is a partner at Faruki PLL law firm in Cincinnati. He represents Enquirer Media in First Amendment and media issues.

This article originally appeared on Cincinnati Enquirer: Strictly Legal: Ivy League athletes bring class action lawsuit