Skip to content
Link copied to clipboard

Can the Ivy League continue to ban athletic scholarships? A Supreme Court ruling has some wondering.

Two Penn grads, both attorneys, wrote to the league connecting the ban on scholarships to a denial of education-related benefits.

Could Penn fill the Palestra and be a national hoops power with athletic scholarships?
Could Penn fill the Palestra and be a national hoops power with athletic scholarships?Read moreCHARLES FOX / Staff Photographer

A letter sent this week to the presidents of the eight Ivy League schools and assorted others within the Ivy leadership structure is intended as a bit of a hand grenade.

Signed by a pair of attorneys, Alan Cotler and Robert Litan, both 1972 University of Pennsylvania graduates, the letter comes on top of an eight-page memo the pair wrote that calls into question whether the Ivy League will be able to continue to ban athletic scholarships.

In Ivy athletic circles, that’s about as explosive a long-term topic as you can find.

Their letter, mind you, is a polite grenade, starting out, “We respectfully write to you concerning the recent United States Supreme Court decision in NCAA v. Alston and how it affects the Ivy League’s long-standing policy of providing financial aid based on need only.”

» READ MORE: NCAA has rigged its own game

These two then cut to the chase, suggesting that this policy would violate antitrust law except a section of the Higher Education Act passed by Congress in 1994 secures the right of the Ivies to have current financial-aid policies in place.

“The exemption expires at the end of September 2022, a year from now,” their letter notes, ominously.

Their overall starting point was the June Supreme Court decision, when the high court upheld a district court ruling that the NCAA can’t enforce certain rules limiting the education-related benefits such as postgraduate scholarships or other resources that colleges offer athletes as long as those are educational benefits.”

These men wonder how the Ivy League denying undergraduate athletic scholarships to all isn’t a similar denial of benefits.

Whether you agree with their assertions, you can’t question their credentials. Litan, also an economist by trade, has previously directed economic research at the Brookings Institution, among other places, and was appointed principal deputy assistant Attorney General in 1993, at the beginning of the Clinton Administration, working for the assistant Attorney General for antitrust.

“I walk into the job, August of 1993, the first or second thing I was instructed to do was [handle] this case,” Litan said over the phone about a case involving the Ivy League and MIT financial-aid policies, a suit started by the preceding Bush Administration, eventually settled by the Ivy schools, who agreed not to share information about financial-aid awards to specific students or their formulae for computing financial aid.

Cotler, a longtime trial attorney unafraid to mix it up, was a Penn basketball player back during some glory days five decades back for the Quakers. Cotler has long believed that Penn has everything in place to be a national power in the sport. He started this quest from that place.

“I don’t think the Penn people fully understand the potential Penn has,” Cotler said in a phone interview, making it clear that that he is talking about the higher levels of the administration, above the athletic department.

There was a big hangup, Cotler kept getting told … those scholarships. Every other Division I league currently has them.

Their memo is meant to be a legal analysis, looking at the Alston case, why it was defined narrowly by the plaintiffs, who had no interest, for instance, in how it could be applied to the Ivy League, which has traditionally not offered athletic scholarships because it has not offered merit scholarships of any kind.

» READ MORE: Basketball players (and movie hopefuls) try out as extras for Adam Sandler’s new film | Mike Jensen

“If one (especially a non-lawyer) reads the opinion too quickly, it may appear that the Court’s holding gives the Ivies a pass,” the memo stated. “In summarizing the trial court’s decision, the Supreme Court noted that the lower court’s injunction allowed ‘individual conferences (and the schools that constitute them) to impose tighter restrictions if they wish.’ At first blush, one could infer that statement to allow the Ivy League, for example, to limit the ‘education-related compensation or benefits’ its schools can offer even though the NCAA (or two or more conferences agreeing) cannot do so without violating the antitrust laws. But that outcome does not make sense: the NCAA cannot impede competition …. but the Ivy League can?”

In looking at the issue, they also know the explosive concurrence by Justice Brett Kavanaugh, who wrote, “Those traditions alone cannot justify the NCAA’s decision to build a massive money-raising enterprise on the backs of student-athletes who are not fully compensated.”

» READ MORE: Live hoops recruiting is back, as important as ever | Mike Jensen

Whether the Ivy League makes much money on athletics is a subject for debate, but there is no question that the only D1 league that doesn’t offer scholarships also is the D1 league with the largest collective endowments. There is a moral argument, not just a legal or economic one, to be made about whether that juxtaposition can stand when Ivy schools are solidly competing for national championships in many sports. (And a counterargument that the system is working just fine for all these institutions, and that Ivy schools have been a national leader in providing financial aid.)

“Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate,’’ Kavanaugh wrote. “And under ordinary principles of antitrust law, it is not evident why college sports should be any different.”

Penn law professor Herbert Hovenkamp, speaking for himself, not his school or the Ivy League, said, “It’s one man’s opinion. I think people have over-weighed the concurrence. Because any of the other justices could have signed on to it but didn’t.”

» READ MORE: A new ($$$) era of college sports starts now | Mike Jensen

Asked how this may play out, Hovenkamp, an antitrust expert, said, “My guess is they’ll go after a renewal of the [antitrust] exemption. If they can get the exemption renewed, that would probably be the best outcome for them. … I am reasonably sure the Ivies will start lobbying Congress for an extension.”

League by league

But has the political landscape changed? Rising tuition makes this even more of an anti-elitist issue. Do the Ivies need political protection? Don’t Ivy athletes work as hard as those at Power 5 schools?

A professor of law and economics at Cornell, George Hay, isn’t sure the Ivy League is on such tenuous ground if you’re just looking at the league as a sports league — taking overall merit aid out of the antitrust equation — noting that the Alston decision allowed for sports leagues to have their own rules.

“I think the Kavanaugh position is an interesting one,” Hay said. “But I don’t think it’s ready for prime time yet. I think individual leagues have much stronger ground even under Alston.”

There’s another side of the story, Hay noted.

“Athletes are actually doing quite well at the Ivies,’’ Hay said. “Not many are wealthy. When they meet full need … they’re essentially getting a free ride.”

Not to mention, it can be argued, an Ivy League admissions slot has value in itself, now more than ever.

For a sport such as basketball, how many prospective recruits are unwilling to start the admissions process if they need to prove financial need? One former Ivy assistant said a primary reason he left the job was because he grew tired of asking recruits how much their parents made for a living. Coaches in the league will tell you the potential field of recruits is cut by financial factors as much as by admissions standards.

This isn’t a new debate among Ivy long-timers. Even an email exchange between Penn grads, a self-selected group of basketball addicts, often gets quickly to the topic at hand. Cotler might question whether Ivy “power people” understand the power of athletics, whether they look down on athletes. A Penn season-ticketholder checks in with a story from the late ‘80s, how former Quakers head coach Dick Harter said back then that if Penn would give him three scholarships a year, he’d give them a top ten program “with better students than they’re now recruiting.”

The debate tends to mention schools such as Stanford, how offering athletic scholarships hasn’t seemed to dent the academic mission out there.

Change won’t come easy

What can’t be debated is that adding athletic scholarships would change the calculus of athletics in departments that lean toward a wide offering of sports, with plenty of those sports bringing in tuition dollars.

When Penn’s athletic department, the overall administration, and the Ivy League itself was asked for comment this week, the response came back … crickets. The status quo has worked pretty well for the Ivy League. Any change on scholarships, you could expect it to be a forced change.

“If the Ivies had to compete for students, as do other schools do now through merit scholarships of many different kinds, and by offering athletic scholarships for sports in which individual schools wanted to excel, the Ivy schools’ endowments are more than ample to allow them to do so while continuing to provide full need-based aid to all,” Cotler and Litan wrote in the memo.

They went on: “As a matter of law, any effort to claim that Ivies deserve what amounts to a judicially created antitrust exemption based on earlier case law is now totally at odds with the reasoning of the Supreme Court’s Alston ruling, which effectively rebuts the view that colleges deserve an antitrust exemption.”

They wrote that Ivy schools “pretend” they can fully compete with schools they consider their academic brethren.

“There have been many top-flight high school basketball players for whom an Ivy school was their first choice, but because they could owe as much $40,000 or more after four years, they and their families felt they could not afford to turn down a full scholarship at a non-Ivy school,” Cotler and Litan wrote.

Their last words in the letter to Ivy presidents, athletic director and board chairs: “We are loyal alumni who fully appreciate what Penn and the Ivy League have done for us in our careers and personal lives. We spent the time and made the effort in preparing the memorandum not for ourselves but for the benefit of current and future students. We believe that only by complying with the antitrust laws, as just reinforced by the Supreme Court, the Ivy League will be respecting the individual legal rights of all Ivy students. At the same time, the Ivies will be attracting even more talented and accomplished individuals in the future who will enhance the Ivy League experience, not to mention the Ivy League’s brand and reputation. The course we recommend is a ‘win-win’ for everyone.”

Make no mistake, those words, however polite, are intended to be incendiary, an attempt to start a fastbreak past the status quo.

“I’ve always felt, and others have as well, Penn hasn’t taken its full potential all the way,” Cotler said. “Basketball takes schools to another level.”