Essay:School sports and antitrust

In high school and college sports, powerful associations like the NCAA have rules that strictly control who may or may not compete. In New Jersey, there is an association of public and private schools called the New Jersey State Interscholastic Athletic Association that excludes all homeschoolers from sports competitions. Does this violate the Sherman Act?

An argument against applying the antitrust laws to a high school sports association is that an association can set neutral criteria for membership. The association is not engaged in an illegal boycott simply by excluding those who don't qualify for membership.

But a high school association is a trade association, and it canNOT lawfully base membership on agreement to a boycott.

It can be argued that at the college level, the NCAA can lawfully restrict inter-collegiate sports to those who are enrolled as full-time students at NCAA member colleges. Why can't high school sports leagues have a similar rule?

But there are obvious differences. Colleges are not funded by property taxes, for example. A student in a high school district is funding his local sports whether he attends the school or not. Also, the NCAA declares many types of students as ineligible, ranging from transfers to low SATs to other criteria. The NJ association has an exclusion that singles out homeschoolers.

Moreover, if the association thinks it can prove its case under "rule of reason," then let it provide the evidence. While colleges could easily point to abuse if there was not an enrollment requirement (e.g., non-students wanting to play for Notre Dame), high schools could not point to a problem of numerous homeschoolers trying to play on school teams.

It can be argued that in cities like Chicago, there used to be separate leagues for public and Catholic schools, culminating in a citywide public-Catholic championship game. No one doubted that each league could set its own membership criteria. I don't see why the analysis would change just because we have moved to a single, statewide sports league open to both public and private schools (but not home schools).

But it's discriminatory to accept one type of athlete (e.g., white, wealthy Catholics) while excluding another type of athlete (e.g., minority, less privileged Protestants).

It can be argued that antitrust laws are just not applicable to noncommercial, nonprofit activities like high school sports. To obtain "treble damages" one must prove economic damages before you can treble them. Three times zero is still zero.

But there are substantial damages in lost college scholarships. Try three times the cost of tuition for college, and the loss of wages upon graduation.

Finally, the Sherman Act applies only to interstate and foreign commerce, as permitted by the Constitution. High schools are not engaged in interstate commerce, so you're limited to state law and state courts.

But high schools don't have to be engaged in interstate commerce, but merely to affect it. And surely high schools do affect interstate commerce in the future of the students they exclude.

It can be argued that if the NCAA can get away with violating antitrust, then the high schools probably can also.

But the NCAA has lost some big antitrust cases. Here's one example: NCAA v. Bd. of Regents of the Univ. of Oklahoma, 468 US 85, 86 (1984) (holding that an output restriction on broadcasting college football was unlawful).

By the way, don't assume that public schools are behind the group boycott. Private schools may be bigger supporters of keeping the homeschoolers out, as private schools depend heavily on student athletes paying big bucks to play sports. In a test case I have in mind, the local public school was fine with the homeschooler playing on the team, but the association prevented it. I've heard of other examples of that also.

High schools are supported by property taxes, but how does that have any bearing on antitrust law?

It doesn't seem reasonable to exclude someone from a service that he's already paying for. This supports the homeschoolers in a "rule of reason" analysis.

The regulated activity still has to be commercial in nature.

School sports, even high school sports, is big business. Really, you have no idea how seriously people take high school sports, and how much money there is in it. Some of it is interstate. All recruitment is interstate. College scholarships turn entirely on high school sports, and many plush jobs revolve around school sports.

United States v. Morrison prohibited federal interference in purely local issues.

Dismissal of antitrust actions for lack of impact on interstate commerce are unheard of. I can't imagine losing on those grounds. In fact, I doubt that defendants would even argue for it.