`
`1a
`
`APPENDIX A
`
`FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`No. 19–15566
`No. 19-15662
`D.C. No. 4:14–md–02541–CW
`
`
`SHAWNE ALSTON; MARTIN JENKINS; JOHNATHAN
`MOORE; KEVIN PERRY; WILLIAM TYNDALL; ALEX
`LAURICELLA; SHARRIF FLOYD; KYLE THERET; DUANE
`BENNETT; CHRIS STONE; JOHN BOHANNON; ASHLEY
`HOLLIDAY; CHRIS DAVENPORT; NICHOLAS KINDLER;
`KENDALL GREGORY-MCGHEE; INDIA CHANEY;
`MICHEL’LE THOMAS; DON BANKS, “DJ”; KENDALL
`TIMMONS; DAX DELLENBACH; NIGEL HAYES;
`ANFORNEE STEWART; KENYATA JOHNSON; BARRY
`BRUNETTI; DALENTA JAMERAL STEPHENS, “D.J.”;
`JUSTINE HARTMAN; AFURE JEMERIGBE; ALEC JAMES,
`Plaintiffs-Appellees,
`
`v.
`
`NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, THE
`NCAA; PACIFIC 12 CONFERENCE; CONFERENCE USA;
`THE BIG TEN CONFERENCE, INC.; MID-AMERICAN
`CONFERENCE; SOUTHEASTERN CONFERENCE;
`ATLANTIC COAST CONFERENCE; MOUNTAIN WEST
`CONFERENCE; THE BIG TWELVE CONFERENCE, INC.;
`SUN BELT CONFERENCE; WESTERN ATHLETIC
`CONFERENCE; AMERICAN ATHLETIC CONFERENCE,
`Defendants-Appellants,
`
`
`
`
`
`2a
`
`AMERICAN BROADCASTING COMPANIES, INC.;
`CBS BROADCASTING, INC.; ESPN ENTERPRISES, INC.;
`ESPN, INC.; FOX BROADCASTING COMPANY, LLC.; FOX
`SPORTS HOLDINGS, LLC.; TURNER BROADCASTING
`SYSTEM, INC.,
`
`Intervenors.
`
`
`JOHN BOHANNON; JUSTINE HARTMAN,
`as representatives of the classes,
`Plaintiffs-Appellants,
`
`v.
`
`NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, THE
`NCAA; PACIFIC 12 CONFERENCE; CONFERENCE USA;
`THE BIG TEN CONFERENCE, INC.; MID-AMERICAN
`CONFERENCE; SOUTHEASTERN CONFERENCE;
`ATLANTIC COAST CONFERENCE; MOUNTAIN WEST
`CONFERENCE; THE BIG TWELVE CONFERENCE, INC.;
`SUN BELT CONFERENCE; WESTERN ATHLETIC
`CONFERENCE; AMERICAN ATHLETIC CONFERENCE,
`Defendants-Appellees,
`
`
`AMERICAN BROADCASTING COMPANIES, INC.;
`CBS BROADCASTING, INC.; ESPN ENTERPRISES, INC.;
`ESPN, INC.; FOX BROADCASTING COMPANY, LLC.; FOX
`SPORTS HOLDINGS, LLC.; TURNER BROADCASTING
`SYSTEM, INC.,
`
`Intervenors.
`
`
`In Re National Collegiate Athletic Association Athletic
`Grant-in-Aid Cap Antitrust Litigation
`
`
`
`
`
`
`3a
`
`
`Appeal from the United States District Court
`for the Northern District of California
`Claudia Wilken, District Judge, Presiding
`
`Argued and Submitted March 9, 2020
`San Francisco, California
`Filed May 18, 2020
`
`Before: Sidney R. Thomas, Chief Judge, and
`Ronald M. Gould and Milan D. Smith, Jr.,
`Circuit Judges.
`
`Opinion by Chief Judge Thomas;
`Concurrence by Judge Milan D. Smith, Jr.
`
`SUMMARY*
`
`Antitrust
`The panel affirmed the district court’s order in an
`antitrust action, enjoining the National Collegiate Ath-
`letic Association from enforcing rules that restrict the
`education-related benefits that its member institutions
`may offer students who play Football Bowl Subdivision
`football and Division I basketball.
`In O’Bannon v. NCAA (O’Bannon II), 802 F.3d
`1049 (9th Cir. 2015), the court affirmed in large part the
`district court’s ruling that the NCAA illegally re-
`
`* This summary constitutes no part of the opinion of the court.
`It has been prepared by court staff for the convenience of the
`reader.
`
`
`
`
`
`4a
`
`strained trade, in violation of section 1 of the Sherman
`Act, by preventing FBS football and D1 men’s basket-
`ball players from receiving compensation for the use of
`their names, images, and likenesses, and the district
`court’s injunction insofar as it required the NCAA to
`implement the less restrictive alternative of permitting
`athletic scholarships for the full cost of attendance.
`Subsequent antitrust actions by student-athletes
`were consolidated in the district court. After a bench
`trial, the district court entered judgment for the stu-
`dent-athletes in part, concluding that NCAA limits on
`education-related benefits were unreasonable re-
`straints of trade, and accordingly enjoining those limits,
`but declining to hold that NCAA limits on compensa-
`tion unrelated to education likewise violated section 1.
`The panel affirmed the district court’s conclusion
`that O’Bannon II did not foreclose this litigation as a
`matter of stare decisis or res judicata.
`The panel held that the district court properly ap-
`plied the Rule of Reason in determining that the en-
`joined rules were unlawful restraints of trade under
`section 1 of the Sherman Act. The panel concluded that
`the student-athletes carried their burden at the first
`step of the Rule of Reason analysis by showing that the
`restraints produced significant anticompetitive effects
`within the relevant market for student-athletes’ labor
`on the gridiron and the court.
`At the second step of the Rule of Reason analysis,
`the NCAA was required to come forward with evi-
`dence of the restraints’ procompetitive effects. The
`district court properly concluded that only some of the
`challenged NCAA rules served the procompetitive
`purpose of preserving amateurism and thus improving
`consumer choice by maintaining a distinction between
`
`
`
`
`
`5a
`
`college and professional sports. Those rules were limits
`on above-cost-of-attendance payments unrelated to ed-
`ucation, the cost-of-attendance cap on athletic scholar-
`ships, and certain restrictions on cash academic or
`graduation awards and incentives. The panel affirmed
`the district court’s conclusion that the remaining rules,
`restricting non-cash education-related benefits, did
`nothing to foster or preserve consumer demand. The
`panel held that the record amply supported the findings
`of the district court, which reasonably relied on demand
`analysis, survey evidence, and NCAA testimony.
`The panel affirmed the district court’s conclusion
`that, at the third step of the Rule of Reason analysis,
`the student-athletes showed that any legitimate objec-
`tives could be achieved in a substantially less restric-
`tive manner. The district court identified a less restric-
`tive alternative of prohibiting the NCAA from capping
`certain education-related benefits and limiting academ-
`ic or graduation awards or incentives below the maxi-
`mum amount that an individual athlete may receive in
`athletic participation awards, while permitting individ-
`ual conferences to set limits on education-related bene-
`fits. The panel held that the district court did not clear-
`ly err in determining that this alternative would be vir-
`tually as effective in serving the procompetitive pur-
`poses of the NCAA’s current rules, and could be im-
`plemented without significantly increased cost.
`Finally, the panel held that the district court’s in-
`junction was not impermissibly vague and did not
`usurp the NCAA’s role as the superintendent of college
`sports. The panel also declined to broaden the injunc-
`tion to include all NCAA compensation limits, including
`those on payments untethered to education. The panel
`concluded that the district court struck the right bal-
`ance in crafting a remedy that both prevented anticom-
`
`
`
`
`
`6a
`
`petitive harm to student-athletes while serving the
`procompetitive purpose of preserving the popularity of
`college sports.
`Concurring, Judge M. Smith wrote that because he
`was bound by O’Bannon II, he joined the panel opinion
`in full. He wrote separately to express concern that the
`current state of antitrust law reflects an unwitting ex-
`pansion of the Rule of Reason inquiry in a way that de-
`prived the student-athletes of the fundamental protec-
`tions that the antitrust laws were meant to provide
`them.
`
`* * *
`
`
`
`
`
`
`
`7a
`
`OPINION
`
`THOMAS, Chief Judge:
`We consider an appeal and cross-appeal from an
`order enjoining the National Collegiate Athletic Asso-
`ciation (the “NCAA”) from enforcing rules that restrict
`the education-related benefits that its member institu-
`tions may offer students who play Football Bowl Sub-
`division (“FBS”) football and Division I (“D1”) basket-
`ball (collectively, “Student-Athletes”). See In re NCAA
`Athletic Grant-In-Aid Cap Antitrust Litig. (Alston),
`375 F. Supp. 3d 1058 (N.D. Cal. 2019). We have juris-
`diction under 28 U.S.C. § 1291, and we affirm.
`We conclude that the district court properly ap-
`plied the Rule of Reason in determining that the en-
`joined rules are unlawful restraints of trade under sec-
`tion 1 of the Sherman Act, 15 U.S.C. § 1. We further
`conclude that the record supports the factual findings
`underlying the injunction and that the district court’s
`antitrust analysis
`is
`faithful to our decision
`in
`O’Bannon v. NCAA (O’Bannon II), 802 F.3d 1049 (9th
`Cir. 2015).
`
`I
`
` The NCAA and its Compensation Rules
`Founded in 1905, the NCAA regulates intercolle-
`giate sports. Id. at 1053. Its mission statement is to
`“maintain intercollegiate athletics as an integral part of
`the educational program and the athlete as an integral
`part of the student body and, by so doing, retain a clear
`line of demarcation between intercollegiate athletics
`and professional sports.” NCAA regulations govern,
`
`
`
`
`
`8a
`
`among other things, the payments that student-
`athletes may receive in exchange for and incidental to
`their athletic participation as well as in connection with
`their academic pursuits.
`The NCAA divides its member schools into three
`competitive divisions. D1 schools—some 350 of the
`NCAA’s approximately 1,100 member schools—
`sponsor the largest athletic programs and offer the
`most financial aid. D1 football has two subdivisions,
`one of which is the FBS.
`In August 2014, the NCAA amended its D1 bylaws
`(the “Bylaws”) to grant the so-called “Power Five” con-
`ferences—the FBS conferences that generate the most
`revenue—autonomy to adopt collectively legislation in
`certain areas, including limits on athletic scholarships
`known as “grants-in-aid.”1 In January 2015, the Power
`Five voted to increase the grant-in-aid limit to the cost
`of attendance (“COA”) at each school. Since August
`2015, the Bylaws have provided that a “full grant-in-
`aid” encompasses “tuition and fees, room and board,
`books and other expenses related to attendance at the
`institution up to the [COA],” as calculated by each in-
`stitution’s financial aid office under federal law. See
`20 U.S.C. §§ 1087kk, ll. The Bylaws also contain an
`“Amateurism Rule,” which strips student-athletes of
`eligibility for intercollegiate competition if they “[u]se[]
`
`
`1 The Power Five conferences are the Atlantic Coast Confer-
`ence (the “ACC”), Big Ten Conference, Big 12 Conference, Pacific
`12 Conference (the “Pac-12”), and Southeastern Conference (the
`“SEC”). Student-Athletes named the Power Five as defendants,
`along with Conference USA, the Mid-American Conference (the
`“MAC”), Mountain West Conference, Sun Belt Conference, West-
`ern Athletic Conference, and American Athletic Conference (the
`“AAC”).
`
`
`
`
`
`9a
`
`[their] athletics skill (directly or indirectly) for pay in
`any form in [their] sport.” “[P]ay” is defined as the “re-
`ceipt of funds, awards or benefits not permitted by
`governing legislation.”
`However, governing legislation permits a wide
`range of above-COA payments—both related and unre-
`lated to education. Without losing their eligibility, stu-
`dent-athletes may receive, for instance: (i) awards val-
`ued at several hundred dollars for athletic performance
`(“athletic participation awards”),2 which may take the
`form of Visa gift cards; (ii) disbursements—sometimes
`thousands of dollars—from the NCAA’s Student Assis-
`tance Fund (“SAF”) and Academic Enhancement Fund
`(“AEF”) for a variety of purposes, such as academic
`achievement or graduation awards, school supplies, tu-
`toring, study-abroad expenses, post-eligibility financial
`aid, health and safety expenses, clothing, travel, “per-
`sonal or family expenses,” loss-of-value insurance poli-
`cies, car repair, personal legal services, parking tickets,
`and magazine subscriptions;3 (iii) cash stipends of sev-
`
`2 Athletic participation awards include the “Senior Scholar-
`Athlete Award,” which is a postgraduate scholarship of $10,000 or
`less that institutions may award two student-athletes per year,
`and awards for achievement in special events, such as all-star or
`post-season bowl games.
`3 The record indicates that the NCAA does little to regulate
`or monitor the use of these funds. While it controls the total pool
`of money that an institution may distribute each year, it has not
`capped the amount that an individual athlete may receive. The
`SAF is broadly available to “assist student-athletes in meeting
`financial needs that arise in conjunction with participation in inter-
`collegiate athletics, enrollment in an academic curriculum or to
`recognize academic achievement as determined by conference of-
`fices.” And the NCAA “encourage[s]” schools to allocate AEF
`funds to provide “direct benefits to student-athletes that enhance
`[their] welfare.”
`
`
`
`
`
`10a
`
`eral thousands of dollars calculated to cover costs of at-
`tendance beyond the fixed costs of tuition, room and
`board, and books, but used wholly at the student-
`athlete’s discretion;4 (iv) mandatory medical care
`(available for at least two years after the athlete grad-
`uates) for an athletics-related injury; (v) unlimited
`meals and snacks; (vi) reimbursements for expenses
`incurred by student-athletes’ significant others and
`children to attend certain athletic competitions; and
`(vii) a $30 per diem for “unitemized incidental expenses
`during travel and practice” for championship events.
`The NCAA has carved out many of these excep-
`tions in the past five years. For example, before 2015,
`athletic participation awards did not take the form of
`cash-like Visa gift cards. And once the NCAA permit-
`ted grants-in-aid for the full COA, effective August
`2015, many more student-athletes began to receive
`above-COA payments, such as cash stipends, Pell
`Grants, and AEF as well as SAF distributions.
`This expansion of above-COA compensation has co-
`incided with rising revenue from D1 basketball and
`FBS football for the NCAA and its members. In the
`2015–16 academic year, these programs generated $4.3
`billion in revenue (a $300 million increase from the pre-
`vious year) for the Power Five. And in 2016, the
`NCAA negotiated an eight-year extension (until 2032)
`of its multimedia contract for the broadcasting rights to
`March Madness, the annual D1 men’s basketball tour-
`nament. Under that agreement, the NCAA will re-
`ceive $1.1 billion per year (an annual increase of over
`$325 million).
`
`
`4 Under the Bylaws, student-athletes who have already re-
`ceived Pell Grants (calculated to cover the COA) may also receive
`these stipends.
`
`
`
`
`
`11a
` The O’Bannon Litigation
`The NCAA is no stranger to antitrust litigation
`arising
`from
`its compensation rules.
` In 2009,
`Ed O’Bannon, a former UCLA basketball player, sued
`the NCAA after learning that a college basketball vid-
`eo game featured an avatar that resembled him and
`sported his jersey number. O’Bannon II, 802 F.3d at
`1055. “The gravamen of [his] complaint” was that the
`NCAA illegally restrained trade, in violation of sec-
`tion 1, by preventing FBS football and D1 men’s bas-
`ketball players from receiving compensation for the use
`of their names, images, and likenesses (“NILs”).5 Id.
`After a bench trial, the district court agreed under
`the Rule of Reason and entered relief for the plaintiffs.
`See O’Bannon v. NCAA (O’Bannon I), 7 F. Supp. 3d
`955, 962–63 (N.D. Cal. 2014), aff’d in part, rev’d in part,
`O’Bannon II, 802 F.3d at 1079. The district court
`acknowledged the NCAA’s evidence that college ath-
`letics’ “amateur tradition” helps maintain their popular-
`ity as a product distinct from professional sports. Id. at
`999. It nevertheless concluded that this procompetitive
`benefit did not justify the NCAA’s “sweeping prohibi-
`tion” on NIL compensation. Id. Based on evidence
`that “school loyalty and geography” primarily drive
`consumer demand and a lack of proof that small pay-
`ments to student-athletes would diminish college
`sports’ popularity, the district court determined that
`
`
`5 The O’Bannon class included “[a]ll current and former stu-
`dent-athletes” who had played D1 men’s basketball or FBS foot-
`ball “and whose [NILs] may be, or have been, included or could
`have been included (by virtue of their appearance in a team roster)
`in game footage or in video[]games licensed or sold by Defendants,
`their co-conspirators, or their licensees.” Id. at 1055–56.
`
`
`
`
`
`12a
`
`the NCAA could justify, at most, restrictions on large
`payments. Id. at 1000–01.
`After identifying two less restrictive alternatives
`(“LRAs”) to the challenged rules, id. at 1004–07, the
`district court implemented those LRAs through an in-
`junction that required the NCAA to permit its schools
`to (i) “use the licensing revenue generated from the use
`of their student-athletes’ [NILs] to fund stipends cov-
`ering the [COA]”; and (ii) to make deferred, post-
`eligibility cash payments in NIL revenue, not to exceed
`$5,000, to student-athletes. Id. at 1007–08; see also id.
`at 1008 (finding no evidence that “such a modest pay-
`ment” would “undermine[]” NCAA’s “legitimate pro-
`competitive goals”). The NCAA appealed.
`A majority of a Ninth Circuit panel concluded that
`the district court’s decision, the first of its kind, was
`“largely correct.” O’Bannon II, 802 F.3d at 1053; id. at
`1079 (Thomas, C.J., concurring in part and dissenting in
`part). The panel unanimously affirmed the injunction
`insofar as it required the NCAA to permit athletic
`scholarships for the full COA, but a panel majority re-
`versed and vacated the injunction’s requirement that
`the NCAA allow deferred NIL payments. Id. at 1053.
`In pertinent part, the panel rejected the NCAA’s
`threshold argument that its amateurism rules, includ-
`ing those governing compensation, are “valid as a mat-
`ter of law” under NCAA v. Board of Regents of the
`University of Oklahoma, 468 U.S. 85 (1984). O’Bannon
`II, 802 F.3d at 1061. The panel acknowledged the Su-
`preme Court’s observation, in “dicta,” that the NCAA
`has historically preserved its product by, inter alia,
`prohibiting payments to student-athletes. Id. at 1063
`(citing Bd. of Regents, 468 U.S. at 102). But it declined
`to read that statement as perpetual blanket approval
`
`
`
`
`
`13a
`
`for the NCAA’s compensation rules, which were not at
`issue in Board of Regents. Id. Though conceding that
`the NCAA’s “amateurism rules are likely to be pro-
`competitive,”6 id. at 1053, the panel refused to exempt
`them from antitrust scrutiny, see id. at 1064 (explaining
`that a procompetitive rule “can still be invalid under
`the Rule of Reason”).
`The panel then affirmed much of the district court’s
`analysis. See id. at 1069–76. As is relevant here, it
`found, based on the record, “a concrete procompetitive
`effect in the NCAA’s commitment to amateurism:
`namely that the amateur nature of collegiate sports in-
`creases their appeal to consumers.” Id. at 1073. As to
`LRAs, it agreed that the ban on funding COA scholar-
`ships with NIL revenue was “patently and inexplica-
`bly stricter” than necessary to differentiate college
`from professional sports. Id. at 1075 (“[B]y the
`NCAA’s own standards, student-athletes remain ama-
`teurs as long as any money paid to them goes to cover
`legitimate educational expenses.”). It clarified that
`courts must invalidate such restraints but may not “mi-
`cromanage organizational rules” or “strike down large-
`ly beneficial market restraints[.]” Id.
`A panel majority, however, found error in the dis-
`trict court’s adoption of deferred NIL compensation
`“untethered to [student-athletes’] education expenses”
`as a viable LRA. Id. at 1076. It explained that “not
`paying student-athletes is precisely what makes them
`amateurs” and disagreed that “being a poorly-paid pro-
`fessional” is “‘virtually as effective’ for that market as
`
`6 In O’Bannon II, “amateurism rules” refers to, inter alia, the
`NCAA’s “financial aid rules” and other rules “that limit student-
`athletes’ compensation and their interactions with professional
`sports leagues.” Id. at 1055.
`
`
`
`
`
`14a
`
`being a[n] amateur.” Id. To avert a “transition[]” to
`“minor league status” and to heed the “Supreme
`Court’s admonition that [courts] must afford the NCAA
`‘ample latitude’ to superintend college athletics,” the
`majority vacated this portion of the injunction. Id. at
`1079 (quoting Bd. of Regents, 468 U.S. at 120). In clos-
`ing, it “emphasize[d] the limited scope of [its] decision,”
`explaining that “in th[at] case,” the Rule of Reason did
`“not require” anything “more” of the NCAA than to
`permit student-athletes to receive scholarships for the
`COA. Id.7
`
` The Alston Litigation
`In March 2014, while the NCAA was litigating
`O’Bannon I, FBS football and D1 men’s and women’s
`basketball players
`filed several antitrust actions
`against the NCAA and eleven D1 conferences that
`were transferred to and, with one exception, consoli-
`dated before the same district court presiding over
`O’Bannon I. Rather than confining their challenge to
`rules prohibiting NIL compensation, Student-Athletes
`sought to dismantle the NCAA’s entire compensation
`framework.
`
`
`7 I dissented from this vacatur, mostly on the basis of the
`standard of review, because I concluded that the record supported
`the entirety of the judgment. Id. at 1080. Though agreeing that
`“court[s] should not eliminate the distinction between professional
`and college sports,” I also disagreed that the vacated remedy
`would have done so. Id. at 1082 n.4. As a practical matter, the
`remedy that survived appeal required nothing of the NCAA,
`which had already adopted a more generous adjustment to the
`grant-in-aid limit by permitting schools to offer any D1 recruit an
`athletic scholarship up to the COA, irrespective of whether his or
`her NIL was or could be used or licensed.
`
`
`
`
`
`15a
`
`In December 2015, the district court certified three
`injunctive relief classes comprised of (i) FBS football
`players, (ii) D1 men’s basketball players, and (iii) D1
`women’s basketball players. Each subclass consists of
`student-athletes who have received or will receive a
`full grant-in-aid during the pendency of this litigation.
`Nearly a year after our decision in O’Bannon II,
`the NCAA sought judgment on the pleadings, invoking
`res judicata. It argued that O’Bannon II “requires
`nothing more of the NCAA than that it permit its
`member schools to provide student-athletes with their
`full education-related [COA].” Because the NCAA had
`already amended its rules to satisfy that requirement,
`it reasoned that any post-O’Bannon antitrust challeng-
`es to its compensation rules must fail. The district
`court denied the motion. It explained that Student-
`Athletes, unlike the O’Bannon plaintiffs, had chal-
`lenged, among other things, limits on non-cash, educa-
`tion-related benefits. It acknowledged the possibility
`that O’Bannon forecloses a type of relief—lifting re-
`strictions on cash payments untethered to educational
`expenses—but declined to read it more broadly than
`that.
`Cross-motions for summary judgment followed.
`The district court again rejected the NCAA’s preclu-
`sion arguments. As to the merits, it adopted, at the
`parties’ request, the market definition from O’Bannon
`I: the market for a college education or, alternatively,
`student-athletes’ labor. It then granted Student-
`Athletes summary judgment at the Rule of Reason’s
`first step, as the NCAA did not meaningfully dispute
`that the challenged rules have anticompetitive effects
`in the relevant markets. At the Rule of Reason’s sec-
`ond step, it determined that the NCAA had raised tria-
`ble issues as to whether its rules have the procompeti-
`
`
`
`
`
`16a
`
`tive effect(s) of maintaining the popularity of its elite
`college basketball and football products or integrating
`student-athletes into the wider campus community.
`Last, the district court found that Student-Athletes
`had proffered sufficient evidence to support their two
`proposed LRAs: (i) allowing individual conferences,
`but not the NCAA, to regulate student-athlete com-
`pensation; or (ii) enjoining NCAA rules that restrict
`both non-cash education-related benefits and benefits
`that are incidental to athletic participation.
`
` The District Court’s Decision
`After a ten-day bench trial, the district court en-
`tered judgment for Student-Athletes, in part. The
`court concluded that NCAA limits on education-related
`benefits are unreasonable restraints of trade, and ac-
`cordingly enjoined those limits; however, the court de-
`clined to hold that NCAA limits on compensation unre-
`lated to education likewise violate section 1. Alston,
`375 F. Supp. 3d at 1109.
`
`1. Determination that O’Bannon Is Not Pre-
`clusive
`At the outset of its conclusions of law, the district
`court again declined to dismiss the case on res judicata
`grounds. Id. at 1092–96. It identified “material factual
`differences” between O’Bannon and the Alston litiga-
`tion, id. at 1095, including in the identity of class mem-
`bers and the rules and rights at issue, see id. at 1093–94
`(explaining that “[t]he crux of the O’Bannon case was
`the right to student-athletes’ NIL[s],” whereas “[t]he
`conduct at issue here is not connected to NIL rights”
`but to limits on above-COA compensation and benefits);
`id. at 1094 (noting that challenged rules either did not
`exist or have “materially changed” since O’Bannon).
`
`
`
`
`
`17a
`
`The district court then proceeded to its Rule of Reason
`analysis.
`
`2. The Relevant Market
`To begin, the district court accepted Student-
`Athletes’ trial theory narrowing the relevant market to
`one in which Student-Athletes sell their “labor in the
`form of athletic services” to schools in exchange for ath-
`letic scholarships and other payments permitted by the
`NCAA. Id. at 1067, 1097.
`
`3. Anticompetitive Effects
`Next, the court reiterated its summary judgment
`finding of “significant anticompetitive effects in the rel-
`evant market.” Id. at 1067, 1097. It relied on Student-
`Athletes’ economic analyses reflecting that schools, as
`buyers of athletic services, exercise monopsony power
`to artificially cap compensation at a level that is not
`commensurate with student-athletes’ value. Id. at
`1068. Based on these analyses, it also found that, but
`for the challenged restraints, schools would offer re-
`cruits compensation that more closely correlates with
`their talent. Id. at 1068–69, 1098.
`The district court also highlighted additional trial
`evidence demonstrating the challenged rules’ anticom-
`petitive effects. This included testimony that, in 2013,
`the Power Five began to urge the NCAA to loosen its
`compensation restrictions based on a concern that ex-
`isting rules incongruously allowed schools to spend on
`virtually anything, including palatial athletic facilities
`and seven-figure coaches’ salaries, except direct finan-
`cial support for student-athletes. Id. at 1068–69. In the
`district court’s view, the Power Five’s concerns consti-
`tuted further proof that, absent the NCAA’s rules, stu-
`dent-athletes would receive higher compensation. Id.
`
`
`
`
`
`18a
`
`at 1069. Although the NCAA granted the Power Five
`autonomy to create new forms of compensation and to
`expand previously available compensation and benefits
`in 2015, the district court observed that these confer-
`ences remain constrained by “overarching NCAA lim-
`its” that cap compensation at an artificially low level.
`Id.
`
`4. Procompetitive Effect
`The district court then turned to the NCAA’s as-
`serted procompetitive justifications. In pertinent part,
`the NCAA argued that the challenged rules implement
`“amateurism,” which drives consumer interest in col-
`lege sports because “consumers ‘value amateurism.’”8
`Id. at 1070 (internal citation omitted). The district
`court accepted this justification with respect to the
`NCAA’s limits on cash compensation untethered to ed-
`ucation, but not as to its limits on non-cash education-
`related benefits. Id. at 1082–83, 1101–02.
`As a preliminary matter, the district court found no
`proof that the challenged rules directly foster consumer
`demand. Id. at 1070. It acknowledged the NCAA’s
`theory that its rules safeguard “amateurism” for con-
`sumers’ benefit, but the meaning of that term eluded
`
`
`8 This justification is the only one raised on appeal. The dis-
`trict court rejected the NCAA’s other proffered justification
`(abandoned on appeal): The challenged rules purportedly enhance
`student-athletes’ college education by integrating them into the
`wider campus community. Id. at 1083–86, 1102–03. The district
`court declined to find that the challenged rules improve academic
`performance or prevent a social “wedge” between athletes and
`non-athletes. Id. at 1083–85, 1102–03. To the contrary, it found
`that the challenged rules foster resentment by permitting expend-
`itures on “frills, like extravagant athletes-only facilities.” Id. at
`1085–86, 1103.
`
`
`
`
`
`19a
`
`the court.9 See id. at 1070–71 (noting former SEC
`commissioner’s testimony that he “do[es not] even
`know what [amateurism] means” (internal citation
`omitted)). Though the NCAA defined amateurism dur-
`ing the litigation as “‘not paying’ the participants,” id.
`at 1071 (internal citation omitted), the district court ob-
`served that this purported pay-for-play prohibition is
`riddled with exceptions. See id. at 1071–74.
`After cataloguing the long list of above-COA pay-
`ments that the NCAA permits, the court then reached
`two conclusions: (i) the challenged rules “do not follow
`any coherent definition of amateurism … or even ‘pay,’”
`and (ii) these payments (many of which post-date
`O’Bannon) have not diminished demand for college
`sports, which “remain[] exceedingly popular and reve-
`nue-producing.” Id. at 1074.
`On the question of consumer demand, the district
`court found Student-Athletes’ evidence regarding the
`effect (or lack thereof) of above-COA compensation on
`demand more compelling than the NCAA’s. For in-
`stance, in the battle of economic experts, the district
`court
`found the NCAA’s only demand expert,
`Dr. Kenneth Elzinga, unreliable because he failed to
`study “standard measures of consumer demand, such as
`revenues, ticket sales, or ratings,” but instead relied on
`interviews with NCAA affiliates introduced to him by
`defense counsel. Id. at 1075. The district court further
`
`
`9 The NCAA’s “Principle of Amateurism” provides that stu-
`dent-athletes’ “participation should be motivated primarily by ed-
`ucation and by the physical, mental and social benefits to be de-
`rived,” that their “participation in intercollegiate athletics is an
`avocation,” and that they “should be protected from exploitation
`by professional and commercial enterprises.” Id. at 1070 (internal
`citation omitted).
`
`
`
`
`
`20a
`
`found his analysis irrelevant as he refused to study con-
`sumer response to historical changes in compensation
`levels based on the false premise that the NCAA’s am-
`ateurism rules have not materially changed over time.
`Id.
`
`By contrast, the district court credited Student-
`Athletes’ expert Dr. Daniel Rascher’s demand analysis,
`which was based on two natural experiments and, in
`some respects, corroborated by defense witnesses. Id.
`at 1076–78, 1100. The first experiment—comparing
`consumer demand before and after the August 2015 in-
`crease to the grant-in-aid limit, which resulted in
`“thousands of class members receiving significant”
`above-COA payments, including SAF and AEF distri-
`butions—demonstrated “no negative impact on con-
`sumer demand.” Id. at 1076. In fact, Dr. Rascher found
`that revenues from D1 basketball and FBS football,
`“one of the best economic measures of consumer de-
`mand,” have increased since 2015. Id. at 1076–77; see
`also id. at 1078 (noting corroborating testimony by an
`NCAA Rule 30(b)(6) witness and a Big 12 Rule 30(b)(6)
`witness). The second experiment—comparing demand
`before and after the University of Nebraska (of the Big
`Ten) began providing athletes up to $7,500 in post-
`eligibility education-related aid-—likewise did not de-
`monstrably reduce interest in Nebraska sports or FBS
`football and D1 basketball more broadly. Id. at 1077–
`78.
`
`The district court also found Student-Athletes’
`survey expert, Dr. Hal Poret, considerably more per-
`suasive than the NCAA’s, Dr. Bruce Isaacson. Id. at
`1078–80, 1100–01. Dr. Isaacson asked respondents why
`they watch college sports and listed “amateurs and/or
`not paid” as one possible reason, but failed to indicate
`that “amateurs” means “not paid” or to otherwise de-
`
`
`
`
`
`21a
`
`fine “amateurs,” thus “render[ing] the responses hope-
`lessly ambiguous.” Id. at 1078. Moreover, he me
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