The eight Ivy League universities were sued for price-fixing over their longstanding ban on athletic scholarships.
(Bloomberg) — The eight Ivy League universities were sued for price-fixing over their longstanding ban on athletic scholarships.
In a proposed class action filed Tuesday in federal court in Connecticut, a group of current and former Brown University student-athletes said the ban restrained competition among schools. They claimed the so-called Ivy League Agreement violated federal antitrust law.
“Out of the over 350 colleges and universities whose students participate in Division 1 athletics, only the University Defendants refuse to provide any athletic scholarships or other compensation/reimbursement for athletic services,” the suit says.
The Ivy League believes student-athletes should be treated the same as non student-athletes financially, and that both groups are entitled to receive need-based financial aid.
“The Ivy League athletics model is built upon the foundational principle that student-athletes should be representative of the wider student body, including the opportunity to receive need-based financial aid,” Ivy League Executive Director Robin Harris said in a statement. “In turn, choosing and embracing that principle then provides each Ivy League student-athlete a journey that balances a world-class academic experience with the opportunity to compete in Division I athletics and ultimately paves a path for lifelong success.”
The suit likens the ban on athletic scholarships to NCAA restrictions on education-related compensation for student-athletes that the US Supreme Court struck down in a 2021 decision. Since that ruling, a growing number of college athletes have signed corporate endorsement deals.
“Against the increased national recognition that college athletes are legally entitled to the fair market value of their athletic services and that schools and entities should compete for those services, the University Defendants continue to adhere to an anachronistic, unfair, and illegal horizontal agreement that severely restricts competition for Ivy League Athletes with respect to the most foundational element of competition: price,” the suit says.
The plaintiffs also claim that universities make a lot of money off their student-athletes. In 2022, the NCAA brought in about $625 million to Division I schools, most of which came from the annual March Madness basketball tournament, according to the suit.
The Ivy League and other elite universities were similarly sued last year for price-fixing when it comes to financial-aid packages. The US Justice Department in July filed a “statement of interest” in that case, saying that “an agreement on the methodology used to calculate need-based financial aid offers eliminates an important dimension of price competition among schools.”
The case is Choh v. Brown University, 23-cv-305, US District Court, District of Connecticut.
(Updates with statement from the Ivy League.)
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