The cost of free coaching: NCAA's $303M volunteer coach settlement

A volunteer coach "does not receive compensation or remuneration from the institution's athletics department or any organization funded in whole or in part by the athletics department," and each member institution may use the services of one volunteer coach in applicable sports. NCAA Division I Bylaws 11.7.6 and 11.01.6 (2021-22)

This bylaw language forms the basis of a proposed $303 million settlement in Ray et al. v. NCAA, No. 1:23-cv-00425 (E.D. Cal.). Plaintiffs characterized the 31-year restriction as a horizontal wage-fixing agreement hiding in plain sight; the NCAA maintained that legitimate procompetitive purposes justified the rule. The settlement resolves these competing claims without a decision on the merits, but the case nonetheless marks a notable chapter in antitrust scrutiny of labor market restraints.

Key factual and legal disputes

The volunteer coach restriction affected approximately 7,718 coaches across 44 sports at over 390 universities. Plaintiffs argued the bylaws constituted a horizontal wage-fixing agreement warranting per se or quick-look review. The NCAA countered that the rule of reason -- the "presumptive or default standard" -- should apply, pointing to the Supreme Court's recognition in NCAA v. Board of Regents, 468 U.S. 85, 101 (1984) that agreements involving teams in league sports should be analyzed under the rule of reason framework.

A central factual dispute concerned the bylaw's purpose. Plaintiffs cited evidence linking the restriction to the NCAA's "Special Committee on Cost Reduction," which identified personnel as the largest athletics budget expense. The NCAA offered competing evidence that the purpose was "to protect coaches' ability to volunteer to support student-athletes without undermining the limits on the number of paid coaches enacted the previous year." The NCAA argued that "the challenged bylaws were reasonably necessary to make procompetitive limits on the number of paid coaches effective." Documentary evidence from the 1992 NCAA Convention similarly indicated concerns about preserving volunteer coaching opportunities following new coach-count limits adopted in 1991.

Damages and expert analyses

Plaintiffs' expert economist, Dr. Orley Ashenfelter, calculated aggregate damages at $253.9 million for lost wages by estimating what class members would have earned in a competitive market but for the restraint. NCAA's expert, Dr. Justin McCrary, offered competing analyses questioning market definition and the assumption that schools would have hired paid coaches absent the volunteer position. The $303 million settlement -- representing 119% of estimated wage damages or 101% of total estimated damages including health benefits -- is substantial by antitrust standards.

Litigation risks and rationale for settlement

The Ray settlement, reached prior to a decision on summary judgment, reflects the litigation risks both parties faced as the case approached trial. For the NCAA, the explicit bylaw language prohibiting "compensation or remuneration" for an entire category of coaches presented significant liability exposure, particularly after class certification and denial of its Daubert motion seeking to exclude the expert report of Dr. Ashenfelter. The 101% single-damages recovery suggests the NCAA recognized meaningful risk that a jury would accept plaintiffs' damages methodology and reject the NCAA's procompetitive justifications. Moreover, plaintiffs relied heavily on a recent case where the district court granted summary judgment for plaintiffs, holding that a wage cap for certain assistant coaches was "prohibited by the Sherman Act." Law v. NCAA, 902 F. Supp. 1394, 1410 (D. Kan. 1995)

Plaintiffs faced genuine uncertainties as well. The NCAA's competitive balance and opportunity-expansion arguments, while untested, were colorable under rule of reason analysis. Further Daubert challenges, a potential decertification motion and the inherent unpredictability of antitrust jury trials all counseled in favor of a negotiated resolution. The settlement represents a rational compromise: substantial guaranteed recovery for class members balanced against continued litigation risk for both sides.

Broader implications

Several principles from the case have broader applicability. First, horizontal restraints among employers -- whether through wage-fixing, no-poach agreements, or structural rules -- increasingly face stringent antitrust analysis. Second, "voluntary" acceptance of restrictive terms by individual workers does not necessarily negate anticompetitive harm when market-wide coordination eliminates competitive alternatives. Third, prestige and non-monetary benefits may not justify coordinated wage suppression, even in labor markets where workers accept unfavorable terms for credentials or advancement opportunities.

The Ray settlement arrives amid broader transformation in college athletics compensation. The Supreme Court's decision in NCAA v. Alston, 594 U.S. 69 (2021) and the recent settlement in In re College Athlete NIL Litig., Case No. 4:20-cv-03919 (N.D. Cal.) ("House"), signal growing acceptance that market-based principles should govern athletic markets. While Alston and House concerned student-athlete compensation, Ray extends similar scrutiny to coaching markets. Together, these developments suggest coordinated market restrictions in collegiate athletics will face antitrust scrutiny regardless of the affected workforce.

The settlement carries particular significance for non-profit organizations that employ unpaid or below-market compensation structures. While individual organizations may legitimately decide not to compensate certain positions, coordinated agreements among competitors risk antitrust exposure. The substantial recovery in Ray reinforces that private antitrust enforcement remains a powerful mechanism for addressing labor market restraints, potentially encouraging similar challenges in other industries.