SBJ/July 14-20, 2014/Opinion

Look to regulatory, not antitrust, solution for college sports

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The O’Bannon case, which will be decided in the coming weeks by a federal judge in Oakland, is one of several pending antitrust lawsuits challenging NCAA rules that restrict the economic benefits intercollegiate athletes may receive for their sports participation. Although remedying the inherent problems of commercialized college sports (primarily Division I football and men’s basketball) is a laudable objective, a free-market solution mandated by antitrust law may have unintended adverse consequences. 

Judicial invalidation of these rules may inhibit universities from providing many athletes with a college education they would not otherwise receive, by eliminating or reducing the value of scholarships for many players whose economic value is less than the cost of an education. A wholly “free market” for player talent will also severely limit universities’ ability to provide academic and athletic opportunities to thousands of women and men participating in nonrevenue sports, which are funded by surplus revenue from football and men’s basketball.  

The NCAA Constitution expressly states that the NCAA’s objective is to “retain a clear line of demarcation between intercollegiate athletics and professional sports” and that “[s]tudent-athletes shall be amateurs,” meaning “their participation should be motivated primarily by education and by the physical, mental and social benefits to be derived.” Intercollegiate athletes “should be protected from exploitation by professional and commercial enterprises,” and university athletic programs should be operated with “prudent management and fiscal practices.” 

The enormous popularity and public demand for college football and basketball games (particularly among ACC, Big Ten, Big 12, Pac-12 and SEC universities) collectively generate substantial revenue. Universities’ use of sports as an entertainment product and marketing tool is a rational response to marketplace realities in an increasingly competitive higher-education environment. However, this rampant commercialization often trumps, rather than serves, the broader goals of higher education, which are marginalized. For example, financial resources are often misallocated from academics to athletics. Each year, relatively few Division I athletic departments (approximately 20 to 25) generate net revenues, and university subsidies to balance their budgets are prevalent. 

 
Commercialization economically exploits Division I basketball and football players in particular.
Photo by: GETTY IMAGES (2)

Commercialization economically exploits elite Division I football and men’s basketball players. The value of their athletic scholarships is less than the full cost of attendance at their respective universities, and their graduation rates are lower than those playing other sports. Because of the extensive time demands of playing football or basketball, their lifestyle during the season generally is less than their classmates, alumni and fans. Although they receive high-quality coaching and training, only about 1 percent of them will ever play professionally in the NFL or NBA. Virtually none will earn enough from playing professionally to achieve lifetime financial security. 

These realities are inconsistent with the NCAA’s constitutional objectives. Big-time football and basketball is not played by “amateurs,” and the “clear line of demarcation between intercollegiate athletics and professional sports” is blurred. Prudent management and fiscal practices also are lacking because so few Division I athletic programs generate net revenue.  

But professionalizing college sports through antitrust litigation and unionization is not a good solution.  

As an alternative, we propose an open and transparent system of federal regulation combined with antitrust immunity for reforms voluntarily adopted by the NCAA. To better promote the educational values and economic sustainability of intercollegiate athletics, our proposed congressional intercollegiate athletics reform legislation would have three mandatory requirements: 

At least a four-year athletic scholarship with limited university termination rights.

Medical care or health insurance for all sports-related injuries and scholarship extensions for injuries.

Elimination of the NCAA requirement that Division I universities operate at least 14 intercollegiate sports. 

It would create an independent commission to propose nonbinding intercollegiate athletics regulations. NCAA and athletic conference conduct that complies with these regulations would receive antitrust immunity.

We suggest that the commission adopt rules to increase graduation rates for Division I football and men’s basketball players, such as requiring universities to offer a graduation bonus and scholarship aid to those who leave school in good academic standing and later seek to complete their college education. We also suggest rules defining a “full athletic scholarship” to include modest stipends beyond tuition, fees, books, and room and board to enable college athletes to have a lifestyle consistent with many of their non-athlete classmates. In addition, athletic department financial self-sufficiency rules, which would give each Division I university the flexibility to determine which mix of sports to offer and invest in to achieve its individualized academic and intercollegiate athletics mission consistent with Title IX, should be considered.  

This federal regulatory commission would have the authority to establish rules that enhance the academic integrity of intercollegiate athletics, maintain the distinction between intercollegiate and professional sports, and require university athletic departments to operate with fiscal responsibility. The “carrot” of antitrust immunity would provide the NCAA, athletic conferences and their member institutions with a significant incentive to adopt and comply with its rules to achieve these objectives, which would be the product of an open and transparent process in which the views of student athletes and members of the public would be considered.

Matt Mitten (matt.mitten@marquette.edu) is professor of law and director of the National Sports Law Institute at Marquette University. Stephen Ross (sfr10@dsl.psu.edu) is Lewis H. Vovakis Faculty Scholar, professor of law, and director of the Institute for Sports Law, Policy and Research at Penn State University. 

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