Supreme Court sides with student athletes over NCAA's limitations

Yahoo Finance’s Alexis Keenan reports the Supreme Court ruling against the NCAA in its athlete-compensation case.

Video transcript

ALEXIS CHRISTOFOROUS: Oh, hey there. I am back. Welcome back to "Yahoo Finance Live." The Supreme Court today ruled that strict NCAA limits on compensating college athletes violate US antitrust laws. It's a decision that could have far-reaching implications for the future of college sports. And Yahoo Finance's Alexis Keenan is here now to break this decision down for us. Alexis.

ALEXIS KEENAN: Hi, Alexis. So this is all over what's called amateurism rules and those harsh rules that the NCAA and other conferences like it put on student athletes to say, you can't take certain types of compensation in exchange for your participation in college sports. Now, the question here is really whether they can prohibit that compensation. And this unanimous decision from the Supreme Court, where all the justices said, no, the NCAA, you and other conferences, you cannot ban what is education-related compensation.

This affirms a Ninth Circuit Court decision that held the same way, essentially. And in this case, the NCAA was saying it should be exempt from the traditional antitrust analysis. The organization said that the non-compensation rules are really foundational to the organization. It preserves its real essence in that it's a amateur organization. Now, the former student athletes in this case, they argued that that rule violates a law against contracts that restrain trade or commerce. So the impact here from this case and this settled now decision is that the athletes can, student athletes at colleges, at universities, they now can accept limited benefits.

Those are things-- like, they could be for scholarships. Also, graduate scholarships they-- the Court said they can accept, also tutoring, also paid internships, post-eligibility periods. So that's really different. They can have things like school supplies, computers, cost of incidental things, things incidental to participation in the sports. That includes travel, and also travel expenses for family as well. Alexis.

KRISTIN MYERS: So, Alexis, I want to ask you about some of the things that the Supreme Court pointed out in their ruling. One of them pointing out some of the top jobs within the NCAA. Explain a little bit more about that.

ALEXIS KEENAN: Right. So while this is not really central to the Court's analysis and the decision they came up with here, the justices did point out that the people who run the NCAA are profiting in a far different way than the athletes that they're overseeing. So if we take a look at the salaries for-- you can see there on the screen-- the top conference commissioners, the Court said, they earn from $2 million to $5 million in salary annually. Also, they pointed out athletic directors tend to make around a million dollars.

Then they pointed to Division I football coaches, who we all know are compensated quite well, earning nearly as much as $11 million a year. Also, they pointed out that the NCAA's March Madness contract alone for their television rights is worth $1.1 billion annually. So certainly, that came into play. There was a lot of discussion about the compensation that is not going to the athletes, but is going to the folks that are running this organization and the other conferences as well.

ALEXIS CHRISTOFOROUS: All right, Alexis Keenan, thanks for breaking that down for us.