Another lawsuit filed by Jeffrey Kessler, a sports attorney, on behalf of some D

Question

Another lawsuit filed by Jeffrey Kessler, a sports attorney, on behalf of some Division I athletes in early 2014 challenges any cap on the compensation paid to college athletes. Mr. Kessler is quoted as saying that “…In no other business – and college sports is big business—would it ever be suggested that the people providing the essential services work for free. Only in big-time college sports is that line drawn.” The Kessler suit…”dispenses with the cost-of-attendance argument and does not ask for damages as a group. It simply states that no cap is legal in a free market and asks the judge to issue an injunction against the NCAA ending the practice. It contends that NCAA member universities are acting as a cartel by fixing the prices paid to athletes, who presumably would receive offers well in excess of tuition, room, board and books if not restricted by NCAA rules” Has Division I athletics, in particular, lost its status as amateur, or should it lose that status given the size of the revenues that it generates and the application of the Sherman Act? Explain. Another lawsuit filed by Jeffrey Kessler, a sports attorney, on behalf of some Division I athletes in early 2014 challenges any cap on the compensation paid to college athletes. Mr. Kessler is quoted as saying that “…In no other business – and college sports is big business—would it ever be suggested that the people providing the essential services work for free. Only in big-time college sports is that line drawn.” The Kessler suit…”dispenses with the cost-of-attendance argument and does not ask for damages as a group. It simply states that no cap is legal in a free market and asks the judge to issue an injunction against the NCAA ending the practice. It contends that NCAA member universities are acting as a cartel by fixing the prices paid to athletes, who presumably would receive offers well in excess of tuition, room, board and books if not restricted by NCAA rules” Has Division I athletics, in particular, lost its status as amateur, or should it lose that status given the size of the revenues that it generates and the application of the Sherman Act? Explain. Another lawsuit filed by Jeffrey Kessler, a sports attorney, on behalf of some Division I athletes in early 2014 challenges any cap on the compensation paid to college athletes. Mr. Kessler is quoted as saying that “…In no other business – and college sports is big business—would it ever be suggested that the people providing the essential services work for free. Only in big-time college sports is that line drawn.” The Kessler suit…”dispenses with the cost-of-attendance argument and does not ask for damages as a group. It simply states that no cap is legal in a free market and asks the judge to issue an injunction against the NCAA ending the practice. It contends that NCAA member universities are acting as a cartel by fixing the prices paid to athletes, who presumably would receive offers well in excess of tuition, room, board and books if not restricted by NCAA rules” Has Division I athletics, in particular, lost its status as amateur, or should it lose that status given the size of the revenues that it generates and the application of the Sherman Act? Explain.

Explanation / Answer

Division I athletics has not lost its status as amateur as of now but it should lose that status given the size of the revenues that it generates. Division I athletics is becoming one of the major businesses which generates a lot of revenue. So Division I athletics should no longer be treated as an amateur business, but it should be treated as a full fledged business generating revenues for sports organizations. So the athletes must also be paid handsomely for the services they provide to the sports organizations.

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