College football revelry will be in full swing on Saturday when teams kick off the 2022 season, but there’s one tradition that needs to end — the National Collegiate Athletic Association’s (NCAA) insistence that its players are amateurs. Players are now free to earn money from their name, image and likeness (NIL) contracts but NCAA policies are preventing them from realizing their full market potential. Federal policymakers should resist calls to legislate these misguided rules and the NCAA should embrace the free market instead.
With annual revenues exceeding $18.7 billion, college sports are big business. Power Five schools alone — the 69 programs competing in the NCAA’s most prestigious conferences — rake in about $8.3 billion each year from various sources, such as the Big 10’s new seven-year media deal valued at $1.2 billion annually.
But players receive nothing in the form of wages, despite the fact that the average economic value of a Power Five football player is estimated to be $1.3 million over a four-year collegiate career. That’s because the NCAA has long held that its athletes are amateurs, not professionals, strictly forbidding most forms of compensation and threatening players and programs with harsh penalties for violating its bylaws.
This model was dealt a blow in last year’s NCAA v. Alston decision, when Supreme Court Justice Brett Kavanaugh’s concurring opinion raised antitrust concerns, observing, “The NCAA’s business model would be flatly illegal in almost any other industry in America.” While the unanimous decision was limited in scope, finding the NCAA can’t limit education-related payments to athletes, Kavanaugh warned of an “overdue course correction.”
The Alston decision pushed the NCAA to establish a temporary NIL policy and at least 28 states have passed laws enshrining collegiate athletes’ rights to earn NIL compensation so they can pursue endorsement deals, autograph sales, and other money-making ventures that were previously banned by the NCAA. But the NCAA’s interim NIL policy and guidance clings to its amateurism fairy tale, making it difficult for players to get the best deals possible.
Notably, the NCAA still prohibits recruits from communicating with third-party boosters, and NIL agreements can’t be tied to enrollment at a particular institution. This makes it hard to shop around for the best deal and has resulted in one-sided contracts with unfavorable terms for athletes, according to reports by The Athletic. Under the rules, deals must be based on the value each player brings to an NIL agreement, meaning they can’t get extra money just because they’re the star quarterback or a heralded recruit.
The NCAA, it seems, is hell-bent on capping how much players can earn from NIL, claiming the rules promote competitive balance by putting schools on an even playing field for recruits. But considering donations account for 24 percent of Power Five college athletic revenues, it’s more likely they just don’t want competition for this $2 billion funding pie that helps fund elaborate facilities, multimillion-dollar salaries, and expanding bureaucracies.
For example, the University of Alabama is making $600 million in upgrades to its athletics facilities and recently awarded Nick Saban with a $93.6 million contract. While boosters have plenty of cash to throw around, NIL deals could eat into athletic department budgets, threatening their lavish status quo.
But the NCAA knows its rules may be on shaky legal grounds, which is why they’re lobbying Congress for a federal policy that would preserve their monopoly. Ultimately, they’re seeking an antitrust exemption to prevent an onslaught of lawsuits once they start enforcing NIL restrictions with sanctions and other penalties.
For anyone who spends their fall Saturdays watching football, inviting the likes of House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Chuck Schumer (D-N.Y.) to regulate college sports is a recipe for disaster. Americans need less — not more — politics in their lives. But more importantly, federal legislation likely would codify an unjust system that shortchanges players to the benefit of the NCAA and its 1,100 member colleges and universities.
Rather than looking to Washington for solutions, the NCAA should embrace the free market by letting boosters and players agree to whatever financial terms work best for them. This is how the rest of society organizes itself and collegiate athletes should be no different.
Aaron Smith is the director of education policy at Reason Foundation. Follow him on Twitter @AaronGarthSmith.