Federal lawsuit takes aim at Ivy League’s policy of no athletic scholarships

A class-action antitrust lawsuit filed Tuesday in United States District Court in Connecticut seeks to upend the Ivy League’s system of awarding financial aid to athletes only on the basis of financial need.

The two plaintiffs are current Brown University women’s basketball player Grace Kirk and former Brown men’s basketball player Tamenang Choh. The suit says they are bringing the lawsuit “on behalf of a class of fellow current and former Ivy League collegiate athletes.”

The suit alleges that under what is termed “the Ivy League agreement,” not awarding athletic scholarships “constitutes unlawful price fixing in violation of the Sherman Antitrust Act.”

“We hope that this lawsuit will bring Ivy League athletics into the 21st century by subjecting these universities’ treatment of Ivy League athletes to the antitrust laws, just as the courts have applied such laws to all other NCAA Division I athletic programs,” said Eric Cramer, chairman of the firm Berger Montague, one of the attorneys for the athletes, in a press release.

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The suit alleges the defendants are “price-fixing” and this agreement is “per se illegal. It is naked restraint of trade among horizontal competitors.” The allegation goes on to say, “Absent the Ivy League Agreement, these schools would determine unilaterally, and in competition with each other, how many athletic scholarships to provide, by sport, and in what amounts.”

It notes that Choh, from Lowell, Mass., played for Brown’s men’s basketball team from 2017-22, and that Kirk, from Duluth, Minn., has played for the women’s basketball team. Each received at least one other “full-cost-of-attendance” athletic scholarship offer from another school, according to the suit, noting that Brown did not cover full cost of attendance for either plaintiff.

Tuesday evening, the Ivy League issued a statement from executive director Robin Harris: “As students and their families consider the higher education and, specifically, the intercollegiate athletics opportunities available to them, there are a wide variety of options. Each choice, including the Ivy League, represents an individual decision and carries its own distinct features and benefits.

“The Ivy League athletics model is built upon the foundational principle that student-athletes should be representative of the wider student body, including the opportunity to receive need-based financial aid. In turn, choosing and embracing that principle then provides each Ivy League student-athlete a journey that balances a world-class academic experience with the opportunity to compete in Division I athletics and ultimately paves a path for lifelong success.”

This issue has been percolating for several years. A pair of 1972 Penn graduates, Alan Cotler and Robert Litan, both attorneys, sent a letter in 2021 to the presidents of the eight Ivy League schools and assorted others within the Ivy leadership structure with an eight-page memo calling into question whether the Ivy League will be able to continue to ban athletic scholarships.

The letter began, “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.”

The reference was to a 2021 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.

Their memo was 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 traditionally has not offered athletic scholarships because it has not offered merit scholarships of any kind. They said they did not get a response from any Ivy administrators.

In 2021, George Hay, a professor of law and economics at Cornell, said he wasn’t sure the Ivy League was on tenuous ground if one just considered 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.

“If the Ivies had to compete for students, as 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 2021 memo.

Tuesday’s filing includes Justice Brett Kavanaugh’s now often-quoted concurring opinion in the Alston case, “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.”

As it did for the other Ivy League schools, the suit details some Penn facts and figures, including that approximately 900 Penn students compete in 34 NCAA sports, and that for fiscal year 2020, “Penn had revenues of $7.62 billion and functional expenses of $7.21 billion, for a net operating profit of approximately $410 million,” that Penn’s endowment was $20.5 billion as of 2021. It also notes that Penn “proudly states that 200 Penn athletes represented the university in every summer Olympics games from 1900 through 2012.”

The suit referred to “a national trend toward recognizing the rights of college athletes to realize their market values in terms of educational benefits and compensation for their athletic services,” going into some detail on recent name, image, and likeness developments, noting that the Ivy League has officially endorsed the NCAA’s NIL policy.

» READ MORE: Penn’s Jordan Dingle named Ivy League Player of the Year in men’s hoops

The Ivy League’s history is noted, with the original Ivy League Agreement in 1954 prohibiting athletic scholarships, that the Ivy League is now the only Division I league that now enforces such an agreement.

In detailing the commercial aspects of Ivy League sports, the suit alleges that Penn “demonstrated its commercial zeal by selling the naming rights for its iconic Palestra ...,” and that Penn athletic fundraising in 2018-19 was $63 million, also noting “the importance of revenue generation to the University Defendants is underscored by the million dollar-plus salaries paid to their Presidents and other high-ranking officials, and to those who manage their investments.”

The suit asks for a “permanent injunction ... enjoining defendants from abiding by the Ivy League Agreement or any equivalent horizontal agreement,” and asked that plaintiffs and other class members be awarded “such other relief as the Court may deem just and proper.”