The NCAA’s existential crisis
A screenshot of the NCAA’s website dedicated to the discussion of Name, Image, Likeness rules (Screenshot/NCAA).
The world of bigtime college sports is about to change profoundly in ways not even experts yet comprehend because of a bombshell U.S. Supreme Court ruling against the National Collegiate Athletic Association.
Last week’s unanimous and unambiguous decision in NCAA v. Alston eviscerates the American college football and basketball cartel’s business model of earning billions of dollars annually using unpaid talent in disregard of federal antitrust law.
The ruling said that the NCAA and conferences that control marquee Division I intercollegiate revenue sports — football and basketball — could no longer artificially cap education-related benefits for student athletes. It allows universities to provide perks such as postgraduate internships, graduate or vocational scholarships, laptops and the like — items demonstrably related to education. The opinion does not give colleges or their boosters carte blanche to shower players with cars, luxury apartments, vacation trips or pay them salaries.
But the most damaging finding in the opinion, written by Justice Neil Gorsuch, was that the NCAA had airily flouted the Sherman Antitrust Act, which outlaws monopolistic and anti-competitive efforts to dominate an industry or market. Essentially, the NCAA acknowledged its rules limit athletes worth millions of dollars in professional leagues to basic tuition, room, board, meals and the like but sought to justify them in furtherance of its own arbitrary and anachronistic vision of amateur athletics.
The justices weren’t buying it, as is clear from the text.
“In essence, it (the NCAA) seeks immunity from the normal operation of the antitrust laws and argues, in any event, that the district court should have approved all of its existing restraints,” Gorsuch wrote, incredulity oozing from every word.
Justice Brett Kavanaugh’s concurring opinion was more scalding.
“The bottom line is that the NCAA and its member colleges are suppressing the pay of student athletes who collectively generate billions of dollars in revenues for colleges every year,” Kavanaugh wrote. While college presidents, athletics directors, conference commissioners and coaches pocket six- and seven-figure salaries and build lavish facilities, he added, “the student athletes who generate the revenues, many of whom are African American and from lower-income backgrounds, end up with little or nothing.”
For decades, the NCAA used its market dominance to enforce its proposition that college players should forgo monetary gain and be content with having their undergraduate college costs covered for the most part.
Also, for decades, it went unquestioned. I never rebelled back in the 1970s when a football scholarship helped me earn my degree at the University of Mississippi. I’ve never felt exploited. But intercollegiate athletics has changed dramatically, and players’ expectations rightly changed with them.
In my day, a standing-room crowd for a home game in the cozy confines of Hemingway Stadium in Oxford, Mississippi, was about 32,000. The ticket face price for a 50-yard-line seat in the early- to mid-’70s ranged from $8 to $15. Back then, with the NCAA deciding the handful of games ABC sports could televise nationally or regionally each Saturday, TV crews avoided out-of-the-way Oxford and its no-frills arena.
Change came after a 1984 Supreme Court antitrust ruling against the NCAA. The court stripped the NCAA of its power to dictate which football games got televised. That left schools and conferences free to negotiate their own media deals, and supply rapidly expanded to meet market demands. NBC and CBS moved in as did new sports networks, notably ESPN. Conferences and even individual schools inked lucrative deals. NBC, for example, holds exclusive rights to televise Notre Dame’s home football games.
Today, depending on how much money one cares to spend, it’s hard to find a Division I (now called the Football Bowl Subdivision) college football game that’s not televised or at least live-streamed. With increased TV exposure came a flood of revenue, particularly for such powerhouses as the Southeastern Conference in football and the Atlantic Coast Conference — home to Virginia Tech and Virginia — in hoops.
That hardscrabble little stadium at Ole Miss, for example, doubled its capacity and is crowned with pricey luxury VIP and corporate suites. And those tickets? The few remaining seats for this year’s bloodletting with visiting SEC-West nemesis LSU start at $165 each.
And that’s for one of the SEC’s less prosperous schools. At reigning national champ Alabama’s 101,900-seat stadium in Tuscaloosa, tickets for the Tide’s home game with LSU start at $260 for endzone nosebleed seats while a midfield seats run about $1,300 apiece, according to Stubhub. As Gorsuch’s decision notes, the $963 million that NCAA Division I football and basketball generated in 1985 grew to $13.5 billion by 2016. The SEC grossed $650 million in 2017 from regular season football alone, 63 percent of it from TV contracts. Top Division I football coaches’ yearly salaries “approach $11 million” with top assistants earning more than $2.5 million, the opinion says.
The NCAA itself reaps $1.1 billion annually from its trademarked “March Madness” basketball tournament, the opinion continues. Gorsuch also noted that NCAA president Mark Emmert makes $4 million a year while “commissioners of the top conferences take home between $2 to $5 million.”
What about the athletes that fans actually pay to see?
The estimated average value of a scholarship for a player during the 2019-20 academic year in the FBS, the apex bowl subdivision of Division I college football, was $24,058, according to ScholarshipStats.com, which compiles statistical data to help prospective student athletes to assess their chances of playing college sports. For Division I basketball, the national average scholarship value was $17,853 for men and $18,959 for women.
Accept a free school-logo hoodie, a wad of greenbacks, a plane ticket home to visit parents, a hunting trip or a summer job from a booster or alumnus, however, and a player invites crippling NCAA penalties against the university, the player’s eligibility or both.
Watching everyone else get rich chafed these plaintiffs entering their prime in a fleeting athletic lifespan. They know, for instance, that the current minimum salary for a player who lands a free agent roster spot is $660,000 in the National Football League, $816,482 in the National Basketball Association and $570,000 in Major League Baseball. (It’s an embarrassing $60,000 in the Women’s National Basketball Association.) For high draft picks, compensation is many times greater than those base salaries, not counting endorsement deals and other business opportunities superstardom brings.
Mindful of those numbers, college athletes lawyered up and hit the NCAA (again) right where it was most vulnerable with their class-action antitrust lawsuit. Jeffrey Kessler, a leading antitrust and sports labor litigator, became lead counsel in the Alston case.
“Athletes’ rights and exploitation is something I’ve always been involved with, and I’ve looked at colleges for a long time as a situation that was becoming increasingly exploitative, particularly for Black and brown athletes,” said Kessler, who argued the case before the Supreme Court in March and whose clients include NFL, NBA and MLB players’ unions.
The decision’s long-term aftermath couldn’t be more disruptive for major college sports programs, said Gregg Clifton, a lawyer based in Phoenix who advises colleges and conferences on compliance, investigative and disciplinary matters.
“We’re in a tough spot right now from my perspective in terms of ‘where do we go’ and ‘how does this get resolved,’” said Clifton, a former agent for big-name pro athletes.
By calling into question how much restraint the NCAA and its conferences can exercise over players, including their emerging right to profit off their names, images and likenesses, the court effectively removed the guardrails for colleges and athletes, Clifton said.
Adding to the chaos, 20 states have enacted laws or executive orders allowing college players to profit from use of their names, images and likenesses, according to the Business Of College Sports database. Seven take effect Thursday in Alabama, Florida, Georgia, Kentucky, Mississippi, New Mexico and Texas; an eighth, Arizona’s, takes effect July 23. As of Friday afternoon, NIL bills awaiting governors’ signatures in Illinois, Louisiana and Oregon could also take effect July 1, and a fourth, Missouri, would join them in August. Three NIL bills failed in Virginia’s 2020 General Assembly.
Published reports say the NCAA, wary of provoking further antitrust lawsuits, will likely announce a temporary waiver of its rules against NIL benefits before Thursday. How long that waiver remains in place is anyone’s guess, and it could fundamentally change college sports, Clifton said.
“It’s like the wild, wild west we’re going into,” he said. “Every state’s going to have to decide how they’re going to deal with it, schools are going to have to decide how they’re going to deal with it and obviously conferences are going to have to decide how they’re going to deal with it,” he said.
How will it affect recruiting inducements? Will schools in major media markets such as Southern California and Northwestern enjoy major NIL advantages over, say, West Virginia or Arkansas? All of those, Clifton said, are valid (and as yet unanswerable) questions.
The NCAA could ask Congress for help carving out a limited antitrust exemption. It’s not clear whether there’s any appetite on Capitol Hill to aid an organization whose repeated resistance to change was reflected in the scathing opinion in which liberal and conservative justices were in lockstep.
If the NCAA now teeters friendless at the edge of the abyss, it has no one to blame but itself.
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