Over the past 50 years, the athletics, fitness and recreation industries have changed dramatically — often through legal action. Both at the federal and state levels, legislatures have passed laws and courts have made rulings that have attempted to increase opportunities for participants, while also making facilities safer and more accessible.
The list below is one person’s take on the most important legal cases that shaped the past half-century. It should be noted that while all the cases involve college and high school athletics, it does not mean that nothing important happened in professional sports, or in fitness and recreation, during the span of Athletic Business magazine’s existence. The reason cases involving professional sports were not included in my top five is because pro players had already won free agency, and the cases that followed have simply been trying to determine the scope of the collective bargaining agreement. In the recreation industry, since most of the cases involve state courts and state regulations, the national impact of such decisions is limited.
The cases presented here are listed in chronological order, not necessarily based on importance.
National Collegiate Athletic Association v. Board of Regents, 468 U.S. 85 (1984)
In the early 1980s, the NCAA controlled the number of times a school’s football games could be televised nationally and regionally, as well as the revenue the school received for each broadcast. The NCAA claimed that the goal of the plan was to reduce the adverse effects of live television upon football game attendance.
Unhappy over the limitation, universities belonging to the College Football Association negotiated a separate television contract with NBC that would have allowed a more liberal number of television appearances for each school and would have increased the revenues realized by CFA members. In response, the NCAA announced that it would take disciplinary action against any CFA member that complied with the CFA-NBC contract.
To gain control over their television rights, the schools sued the NCAA claiming that the controls it exercised over the televising of college football games violated Section 1 of the Sherman Antitrust Act. In ruling that the NCAA’s television plan constituted a restraint upon the operation of a free market in violation of the Sherman Act, the United States Supreme Court stripped the NCAA of a major funding source and returned it to the schools and conferences. As a result of the ruling, free market took hold in college football, and schools such as Notre Dame and Texas were able to enter their own television contracts, while conferences such as the Big Ten, SEC and ACC were able to create their own networks. Few factors have had greater impact on the finances of collegiate athletics — already driven by football — than this expansion of TV coverage.
In addition to stripping control over college football television rights from the NCAA, the case is significant in that it establishes that the NCAA is subject to antitrust laws.
NCAA v. Tarkanian, 488 U.S. 179 (1988)
In a case that is still reverberating today, the United States Supreme Court in NCAA v. Tarkanian was asked to determine whether the NCAA, a private unincorporated association, was a state actor for constitutional law purposes. The case started when the NCAA’s Committee on Infractions, after a lengthy investigation, found 38 NCAA rules violations, including 10 by the University of Nevada, Las Vegas head men’s basketball coach Jerry Tarkanian.
In challenging the NCAA’s ability to impose penalties against him, as a tenured public employee, Tarkanian sued in Nevada state court, alleging that he had been deprived of his due process rights. The Nevada Supreme Court agreed and ruled that the NCAA’s conduct constituted state action for jurisdictional and constitutional purposes.
On appeal to the United States Supreme Court, the court held that the NCAA was not a state actor for constitutional purposes. In particular, the court held that UNLV’s decision to adopt the NCAA’s rules did not transform the NCAA into a state actor, especially since UNLV retained the right to withdraw from the NCAA and to establish its own standards.
Prior to this case, the NCAA was considered a state actor and had to provide members and athletes with all the protections — such as due process and reasonable search and seizure — afforded under the U.S. Constitution. After NCAA v. Tarkanian, the NCAA was free to impose rules, such as drug testing of student-athletes, without concern over whether the rules violated the students’ constitutional rights.
Brentwood Academy v. Tennessee Secondary School Athletic Association, 531 U.S. 288 (2001)
The Tarkanian decision became even more important after the United States Supreme Court in Brentwood Academy v. Tennessee Secondary School Athletic Association ruled that state high school athletics associations could be considered state actors for constitutional purposes when applying their authority over member schools. Using the same state action analysis that was used in Tarkanian, the court held that the Tennessee association’s regulatory activity may and should be treated as state action owing to the pervasive entwinement of state school officials in the structure of the association.
In support of its decision, the court found that the nominally private character of the association is overborne by the pervasive entwinement of public institutions and public officials in its composition and workings. In addition, the court noted that there would be no recognizable association, legal or tangible, without the public-school officials, who do not merely control but overwhelmingly perform all but the purely ministerial acts by which the association exists and functions in practical terms. The case is significant in that it requires high school athletics associations to provide members with all constitutional protections required by law.
O’Bannon v. NCAA, 802 F.3d 1049 (9th Cir. 2015)
While not earth shattering when it was decided, O’Bannon v. NCAA is on the list because of the legal impact it has had — and continues to have — on college sports. While visiting a friend’s house, former UCLA basketball player Ed O’Bannon saw his image on the video game NCAA Basketball by EA Sports. O’Bannon and a group of current and former players sued the NCAA, EA Sports and the Collegiate Licensing Company for violating their image rights. The NCAA and the other parties eventually settled the image rights suit for $60 million, or $20 million each, with 29,200 athletes receiving individual payouts estimated to be $1,000 to $7,200, depending on factors such as the sport played and years of appearance in the games.
However, instead of just ending as an image rights case, the case morphed into a lawsuit challenging the NCAA’s compensation rules under antitrust law. O’Bannon and the other plaintiffs claimed that the NCAA placed a salary cap on student-athletes in the form of a scholarship in violation of Section 1 of the Sherman Antitrust Act. While the District Court held that the NCAA was not exempt from antitrust law, it ruled that the NCAA’s ban on paying athletes was reasonable. However, it found that the schools could place $5,000 a year in a trust, to compensate for the use of their images, payable to the athletes when they left school.
On appeal, the Ninth Circuit Court, applying the Rule of Reason test, concluded that the NCAA rule prohibiting payments to athletes, even if said payments were put into a trust, was a reasonable restraint that did not violate antitrust law. What was not reasonable, and did violate the antitrust law, was any restraint that restricted schools from providing athletes with scholarships up to the full cost of attendance beyond tuition, books, and room and board, the Ninthe Circuit held.
O’Bannon is important in that the case forced the NCAA and its member schools to increase the benefits and compensation provided to scholarship athletes. It also left little doubt that the NCAA was not exempt from antitrust law. The case is also significant because after the Ninth Circuit’s decision, California introduced the Fair Pay to Play Act that would prohibit the NCAA from punishing college athletes for profiting off their image rights.
NCAA v. Alston, 594 U.S., 141 S. Ct. 2141 (2021)
After the success of O’Bannon, it was not surprising that another group of current and former college athletes filed a class action against the NCAA. The athletes challenged the NCAA rules and policies that limited the compensation that they could receive from their colleges and universities in exchange for their athletic services, claiming that the NCAA’s restraints violated Section 1 of the Sherman Antitrust Act.
The NCAA claimed that the limits on athlete compensation and benefits were necessary and have a procompetitive effect on college sports for two reasons. First, it argued that the limits help increase output in college sports and maintain a competitive balance among teams. Second, the NCAA claimed that the rules help preserve amateurism, which increases consumer choice by providing a unique product — amateur college sports — distinct from professional sports.
In applying the Rule of Reason analysis to the NCAA’s restraints, the district court and the Ninth Circuit held that even though the NCAA had complete monopsony power, only the NCAA’s rules limiting education-related benefits to athletes violated antitrust laws. Any NCAA rules aimed at ensuring student-athletes do not receive compensation unrelated to education, the court concluded, were reasonable and helped preserve college sports.
On appeal to the Supreme Court, the high court found that the lower courts’ ruling was appropriate since it only enjoined restraints on education-related benefits — such as those limiting scholarships for graduate school, payments for tutoring, and the like. In addition, the Supreme Court found that relaxing these restrictions would not blur the distinction between college and professional sports and thus impair consumer demand for college sports.
More damning than the Supreme Court’s majority decision, however, was the concurring opinion by Justice Brett Kavanaugh, who found that the “NCAA has long restricted the compensation and benefits that student-athletes may receive … and that the Court’s decision marks an important and overdue course correction.” In addition, Justice Kavanaugh wrote that “no other business in America could 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.” Therefore, Justice Kavanaugh wrote, the NCAA’s business model of using unpaid student-athletes to generate billions of dollars in revenue for colleges raises fundamental questions under the antitrust laws.
The Supreme Court’s decision is significant because it, and the pending state laws that would allow athletes to profit off their image rights, forced the NCAA to abandon its’ long-held position against athletes profiting off their Name, Image and Likeness (NIL) rights.
Bonus Case: House v. NCAA settlement (2025)
Although settled before reaching a court decision, no review of the most significant cases of the past 50 years could be complete without at least mentioning the House v. NCAA settlement. In House, a group of former and current college athletes filed an antitrust lawsuit seeking compensation for lost image rights and a share of athletics department and television revenue.
Prior to trial, the NCAA reached a settlement in which it agreed to: provide $2.776 billion to current and former student-athletes for past lost compensation, paid over 10 years; allow up to $22.5 million in revenue sharing per school during the 2025-26 academic year (the amount will increase yearly based on revenue); changes to roster limits and scholarship numbers; and the creation of the College Sports Commission, which was established to review NIL deals of $600 or more (the minimum amount was upped to $2,500 this past April) to ensure that they are for valid business purposes and not pay for play.
While the settlement may have ended some litigation, it also left several questions unanswered and did not put an end to lawsuits against the NCAA, almost guaranteeing future legal challenges. For example, the settlement does not address whether revenue sharing is subject to Title IX requirements. It is significant, however, in that for the first time colleges have entered into an agreement to share revenue with those who generate it — the athletes.
The one constant: change
While people may disagree with the above list of cases, there are two points that no one can dispute. First, over the past 50 years, the athletics, fitness and recreation industries have undergone significant changes. Second, the next 50 years will see even greater changes in these industries, and Athletic Business will continue to keep its readers informed on their impact.
Two Acts of Federal Legislation
Over the past 50 years, two laws have also had a significant impact on the sports and recreation industries.
The first is Title IX of the Educational Amendment Act of 1972, which was obviously already in existence at the time Athletic Business published its first issue in 1977. The reason for inclusion, however, is because it was not until after 1977 that the courts and Congress settled on the correct interpretation of the law. In particular, prior to 1977, there were questions as to whether the law covered the entire educational institution or just those programs within the institution that received federal funds. It was not until Congress passed the Civil Rights Restoration Act of 1988 that it became clear that Congress intended Title IX to be applied to the entire institution, if any program in the institution received federal funding. As a result, it became clear to the courts that high school and college athletics programs needed to comply with the law’s requirements. In addition, it was not until 1979 that the Department of Education issued a Policy Interpretation specifically for intercollegiate athletics programs. It was this Policy Interpretation that introduced the Three-Part Test of substantial proportionality in relation to student enrollment, history of expansion of sports programs, and the meeting of interest and ability that is currently used by the courts to determine “equal opportunity” under the law.
The second law to have a significant impact on the athletics, fitness and recreation industries is the Americans with Disabilities Act. Passed in 1990, and updated by the ADA Amendments Act of 2008, the ADA was a “Public Law,” and it originally was in a different format than presented here. To make the law more widely available, the ADA's goal is to provide a clear and comprehensive mandate for the elimination of discrimination against people with disabilities. As a result of the ADA, schools and recreational and sports facilities, both public and private, are required to make reasonable modifications to ensure that their facilities and programs are physically accessible to people with disabilities.
