Student Athletes Score Unanimous Win Over NCAA

the National Collegiate Athletic Association's grip over college sports. During oral arguments, Justice is Brett Kavanaugh, Clarence Thomas, and Samuel Alito questioned why the athletes weren't getting a bigger share of the billions of dollars schools collect from sports. I mean you said earlier, Uh, this would allow the players to receive six thousand dollars a year, as if that were some exorbitant amount when the TV contracts are in

the billions. Well it just, uh, the coaches salaries have ballooned and they're in the amateur ranks, as are the players. So the argument is they are recruited, their used up, and then they're cast aside without even a college degree. So they say, how can this be defended in the name of amateurism? Joining me is Audrey Anderson, head of the Higher education practice at bass baryan sims Audrey. Justice Gorstch wrote that the n C double A sought immunity

from the normal operation of the antitrust laws. Explain what he meant well. I think one of the things that's really interesting to me about this opinion is that Justice Gorsuch really upheld and relied on what the courts below had done. So he said, look, there was a really extensive trial record here, and the district court judge was really thorough and careful in the way that she approached it, and she applied the anti trust laws in just the right way. What he said was, Look, the ant double

A just didn't have the proof. I agree with some of their legal points here, but they lost on the proof at trial. They could not prove that their rules limiting what kind of compensation student athletes could earn really increased consumer demand for their product, which is what they had to do under the anti trust laws. So they lost on the facts, not on the law. Tell us

about anti trust law as it applies here. So what the m C double A really wanted here June was to get some kind of deferential review under the antitrust laws for amateurism. Rules of the m C double A and the Court was having none of it. Becore such said, look, we have this rule of reason analysis, which is what we use under the anti trust laws, and that's what's appropriate for the m C double A. They also get a rule of reason analysis, and it's a very fact

intensive analysis and it was appropriately applied here. During the oral arguments, several of the johnsices expressed concerns about blurring the distinction between amateur and professional athletics. Did you see any of that concern in the opinion. That's really interesting.

Justice Gorsuch started the opinion with the really old history from the eighteen hundreds and early nineteen hundreds about how dirty with money sports was at that point in time, which really created the m C double A. But I've heard the court at oral argument June be really concerned about what's our next case going to be, what's the next rule that they're going to try to stripe down? And our court's going to be embroiled forever knit picking

the m C double as rules. So there is no nod to that concern at all in the opinion, And in fact, Justice Kavanaughs concurrence is a bring it on kind of an enthusiastic all to arms almost against any other rules of the m C double A. I kind of a very unusual concurrency. Wonder you know what the m C double A ever did to Justice Havanaugh. But there's nothing in the opinion that makes you think that

they had any of those concerns. Butsoever, And I don't know what happened between oral argument and the opinion, except maybe that they kind of figured out that there was really no way to address that concern. That that's just a very messy aspect of our antitrust laws. That they are very fact based, that they are based on what the market looks like at any given point in time, and that parties that are able to bring forth appropriate

evidence are able to challenge those rules. And I guess to give Justice Kavanaugh a little more credit, this could also be seen as, come on, n double A, give your rules a real look and see whether you can't be more accommodating to the interests of your labor pool with this ruling. Does this open the door to more lawsuits by student athletes over the n C double as rules? It does. There already is another class action lawsuit, at

least one. There's probably several pending right now. Already, and yes, it definitely opens the door to more litigation like this and they will all be citing Justice Kavanaugh concurrent. So, under current n double A rules, scholarship funds to student athletes are capped at the cost of attending school, things like tuition and room and board. What can they get after this ruling? The injunction only applies to Division one football and men's and women's basketball because those were the

only students in the certified class. So as to those student athletes, schools can provide them education related benefits that are not cash in an unlimited amount. So more book, computer equipment, musical instruments, all related to their education in

an unlimited amount. As to something that is cash or cash equivalent, they can only give that in an academically related benefit in an amount of fifty dollars because that's the amount right now that the m C double A says that student athletes may be eligible for for athletically related awards. Also it includes study abroad internships, and schools can be very inventive in shaping these education related benefits. So are we talking tens of thousands of dollars or more?

Some student athletes may be able to get that amount of benefit, they could also get scholarships for graduate school. So yes, we are. But right now schools are putting out lots and lots of money for better athletic facilities, for coaching staff, for other things. They're competing on the basis of money that's going to other things that do not quite as directly benefit the student athletes. So competing on the basis of money is nothing new. They're doing

that right now. It just doesn't as directly benefit the student athletes. More than a dozen states have already passed laws that allow college athletes to be paid for the use of their name, image, and likeness, and on July first, seven of those laws are going to take effect. Where does that play into all this? You have to understand that this is separate from the case that was decided.

Name image and likeness laws are talking about what third parties, not the schools themselves, but third parties can pay to license the name, image, and likenesses of student athletes. You know, there's a lot of different ways this could happen, but

some of the easiest ones. You might think of our car dealership in the college town where a student athlete is pays for the name, image and likeness of the quarterback for the football team and uses that on their advertising, or a student athlete has a social media presence and somebody pays to put advertising on it. Those are both ways that a third party might pay for the name, image and likeness of a current student athlete. That's what

these laws are about. The only thing that stops student athletes from doing those kind of deals right now is that the N double A would say that they're ineligible to participate in N double A competition because if you get that kind of revenue right now under MC double

A rules, you're ineligible. The state laws say in our state university, you can't have a rule that, so the student athlete is ineligible to participate in athletic competitions because he or she gets money for their name, image and likeness. So I think that most universities will abide by the state law rather than the double A rules. Onto the Supreme Court decision, individual athletic conferences can still set limits

if they choose to. So what that means is that what the rules that have been found it violate the any trust laws are the rules that the double A set. So those apply to all student athletes. Now what the courts held the District Court in the Ninth Circuit. Now the Supreme Court says, look if an individual conference, you know, if the A C C or a smaller conference said, look in our conference, all the schools in our conference are going to agree that in our conference, students cannot

get these additional academic benefits. That does not violate the any trust laws because cause student athletes would still have a choice. If I want to take advantage of the extra academic benefits, I can choose a school that's not in that conference. If I'm going to that conference, I'm making a choice. I know that I won't get those extra academic benefits, but there's something else at the school

in that conference that I really want. The problem was the rule of being set at the n C Double A level, and there's no other league you can enter that competes with the n double A. So there's a lot left to be written to this story. June, you're pointing out all the n I L laws and what's the n C double A going to do with that? Well, there is a possibility probably won't be one of the Power five conferences, but some of the other conferences in

Division one very well? Could that rules that say the limits in our conference are different and any individual school can do whatever it wants just because they are allowed to provide study abroad all those other academic benefits doesn't mean they have to. They can, but they don't have to. So it just makes it there's more competition based on what the student athlete is going to get rather than

based on what the locker rooms look like. How would you sum up how does this decision change student athletics at this level? I mean, does this change it very much? Or is it all the other things that it's going to lead to. Well, I think this decision is important because it it does say to the n C double a um, really no, really, the anti trust laws apply to you. You can't get a jail get out of

jail free card. Based on this board of Regent's case from you don't get a get out of jail free cards saying that you're a joint venture and so things apply differently to you. You, like all other businesses in America, can't make agreements with your competitors that you're going to

pay your labor zero dollars. And that's really that that's really important, and that will end up, you know, accruding to the benefits of student athletes, because now some schools will choose to provide greater right now academic benefits to student athletes and some won't, and student athletes can make choices based on what they think is best for them.

After the oral arguments, do the unanimity of this decision surprise you, Yeah, I was a little surprised by the unanimity, although the court after oral argument seemed to be all kind of in the same place to me and that they were not buying the n C double a's arguments. But I also got the feeling that they were concerned about the point we've been talking about with in terms of does this open the door to unending litigation against the n C double A on the details of its rule.

And I think that once the court really looked at the arguments carefully, I think they kind of said, if that's the outcome, that is just what the antitrust laws do. Thanks Audrey. That's Audrey Anderson of Basparian SIMS President Joe biden OUs did Fannie Mae and Freddie Max regulator after a Supreme Court ruling opened the door and dealt a punishing blow to investors in their challenge to the government's collection of more than one billion dollars in profits from

the mortgage giants. In a unanimous ruling written by Justice Samuel Alito, that Justice has rejected the shareholder's argument that the Federal Housing Finance Agency had exceeded its authority in making the agreements that allow the federal government to collect more than three d billion dollars in profits from Fannie and Freddie. As Alito and Justice is Neil Gorsuch and Clarence Thomas remarked during closing arguments, it was a big

gask by the shareholders. The way in which the agency carries out its responsibility as conservator has a profound effect on the housing market and therefore a profound effect on ordinary people. Counsel, your remedial ask is a big one and and hard, hard frust to swallow. I know, But how would we unscramble the egg here? My guess is Jonathan Macy, a professor at Yale Law School. So what's your reaction to this decision? This is just a devastating blow to hedge funds and others who had really bet

on a different outcome. And you know, I think at this point it's going to be very hard to show damages for the little bit of the case that's left. Olders can't recover most of the overpayments. And so these big companies like you know, fair Home and Pershing Square, who took a big gamble on the Court's deciding that there was a takings of property here, really lost out. I'm a little bit surprised and disappointed by the ruling, but I can't say that it comes as a complete surprise.

Why did the court find the structure of the f a f A unconstitutional? Well there, I know this has come up many many times. He came up also with the Consumer Financial Protection Bureau. The question is whether you can install as of these agencies in a manner in which you can't remove them. And the Justice has said, we're going to just basically fix the statute and make it so you can remove the head of the agency, which cures any constitutional defect and allows the agency to continue.

And so Mark Collabria, who is the f hf A director and wanted to release you know, Fannie and Freddie from government control, he could now be fired and up he was immediately fired by Biden. So what does replacing Callabria mean for Fatnie and Freddy and the mortgage market. It was huge for Fannie and Freddie. The mortgage market in a nutshell because it means that we're not going to privatize these agencies, which is what Trump wanted to do,

and they'll remain under the auspices of the government. It will be that the mortgage markets will be a little bit more insulated from market forces. That should mean, you know, the lower interest rates will continue because the extent that it makes a practical difference, the government controlled agency, particularly in a Biden administration, will be much more in favor of you know, loose money housing policy and keeping interest

rates low. Let's talk now about the part of the opinion that dealt with the suite that was created under the agreement. Tell us about that. Basically, the ideal was that to the extent that interest rates moved, entities were now making gigantic profits, that the shareholders were not allowed to benefit from the increase in revenue was because there were these sweep accounts that swept all the money into

the U. S. Treasury. They basically said that that was fine, that the Federal Housing Finance Agency did not exceed its authority under federal law when it implemented that sweep account.

Over time, the sweep account was huge. They swept over a hundred billion dollars in profits from you know, Fannie May and Freddie Mack, and it would have been a huge balloon to shareholders if that money had to be returned, And that was really the core of the lawsuit from the standpoint of these investors and why this decision was

such a crushing blow to them. The justices are sending the case back to the lower court, but on this really narrow issue explained that for us, basically there's no improper interference by government in the management of the business.

So it means that the investors will have a chance to show that they were harmed by the fact that the agency was unconstitutional because of a lack of presidential control over f h f A directors who basically approved implemented the policy that was at the heart of the case, which was this sweep policy. So do you think they'll

be able to prove that. It seems like a tenuous connection, and I think it will be extremely I mean, I think the premise of your question is really important, which is a lot of this will come down to the burden of proof, and it will be very difficult, I think, to show. And I think the directors will strenuously argue that they weren't influenced at all by the lack of presidential control. I think that's a real long shot. I take it you think that justices should have come out

a different way. You know, it's a difficult thing, is an emotional matter, June. Frankly, I was hoping that it would come out the other way. In fact, I think that what the government did was terrible stream you know, interjection of the government into what should be you know, a private enterprise kind of situation and taking money for the government at the expense of the shareholders who had put their capital at risk, is you know, something you really don't want to see in a country governed by

the rule of law. On the other hand, as a practical matter, you know, we're living in a time of tremendous profitibly get government spending and government budget deficits, and from that perspective, it's hard to find them that the justices would make the government fork over such a huge amount of money. And you know, increasing the government budget deficit by even more. Is this another nod to the

you know, the idea of the unitary executive. Well, this is certainly, uh, this is certainly a nod to the idea that, uh, there there's something meaningful about the separation of powers and that there are willings in which it's appropriate to construct regulatory agencies in their ways in which it's not. And it is a little bit of a help to the unitary executive. But but uh, but I

out of fault it on that ground. I mean, I do think that that you know, we have we we live in a democracy, and when the administrations change change, it ought to be possible to change the heads of these administrative agencies. I mean, do you buy the idea that, um, the president having the power to fire someone changes the way they act. Oh yeah, definitely. If people want to keep their jobs and the administration changes, I don't have

to change their behavior. Will put it definitely, Biden in the light the l Mark Collabora was operating the agency. He's gonna find and put in somebody who's going to operate the agency in the ways he finds congenial. So it's not often a question of will the people in the jobs chase their behavior, it's will the people in the jobs be the same people or will they get will they change with the administration. And we have a huge philosophical ideological changes we saw in the last election,

you know, the shift from Trump to Biden. You're always going to see people that can work, collaborate, following by the wayside and installing people who are going to be more congenial to the political and economic views of the administration that won the election. So, now, does this decision have any um impact outside of the f h F A context. Not really. This is a very special kind

of bureaucracy. I mean, here's the It isn't a broader you know, so on the sweet side of it, there's really not much of a presidential of value um On the ind hand, in terms of you know, it's just a uh, you know, it's just another case that says that, you know, a certain minister of agency structures like Fannie May and Freddie mac are not going to be you know, don't pass constitutional muster. And we see the same kind of arguments made up with respect to sec administrative judges

or the Consumer Financial Protection Bureau. The same you know, issues have arisen with respect to their constitutionality of those arrangements. Thanks for being on the Boomberg Law Show, John, that's if, Sir Jonathan Macy of Yale Law School. I'm June Grazzo and you're listening to Bloomberg