Readers might have seen recent advertisements on television in which former Alabama football coach Nick Saban urges people to support the Protect College Sports Act. Sponsored by Sen. Ted Cruz of Texas, along with three other Republicans and four Democrats, the bill looks to reorganize college athletics to deal with this new era of monetary payments to athletes and other changes that have occurred in the last five years.
Not surprisingly, Congress is unsatisfied with just giving the National Collegiate Athletic Association (NCAA) the legislative relief that it needs, and especially an exemption from anti-trust laws. Instead, the authors of the bill fancy themselves to be the new executive directors of the NCAA, writing in new rules that would micromanage collegiate sports well beyond anything one would trust Congress to do.
The bill includes a number of provisions and rules:
- Placing into law the 22 percent cap (around $21.5 million this year) on revenue colleges are allowed to share with their players -- an amount agreed to in the House settlement that defined the rules over paying players. It would add a $27.5 million “retention pool” for schools to keep current players in a move that could bring some of the hard-to-regulate third-party NIL deals back in-house.
- Giving conferences the option of pooling their TV media rights, a move proponents say could raise between $4 billion and $8 billion in additional revenue. The SEC and Big Ten disagree and say they would not participate.
- Restricting players to one “free” transfer where they wouldn’t have to sit out a year, which could limit bidding wars that take place year-round in the transfer portal.
- Placing into law the NCAA’s new rule that allows players five years of eligibility but no more.
However, Jason Russell of Reason points out that the bill attempts to meddle in NCAA affairs in an unprecedented way, going well beyond simply giving collegiate sports an anti-trust exemption and then allowing the organization to set its own rules. Instead, Congress simply is replacing the judges originally responsible for creating the chaos.
Russell notes that the bill also regulates Name, Image, and Likeness (NIL) payments, procedures a coach must follow when leaving a job, agent fees, what games should be televised, and even the length of the football season. That most coaches and administrators favor this bill is no surprise, for it really is a protectionist device, leaving what should be policies set by the NCAA leadership and Congress being the regulator. Like it or not, this bill essentially nationalizes college sports, and especially college football and basketball.
It is not hard to figure out why coaches support this bill. First, given the huge size of current NIL payments to athletes, they realize that the limits on NIL payments will make it less likely that an Ohio State or LSU can simply bid a player by offering him more money. Second, the less money that goes to the players can go to the coaches.
The bill faces strong opposition from groups like the NAACP, which notes that for the first time, black collegiate athletes are receiving substantial legal payment for their services, and they fear that the bill, if passed, would place new limits on what these athletes are paid. (The NAACP is also trying to tie the Protect Act to recent attempts by Republican legislators to engage in state redistricting, which really is a non sequitur.) Unfortunately, the NAACP also opposes any exemption from anti-trust for the NCAA.
Clearly, Congress is overstepping its bounds, trying to govern a huge organization when it cannot govern its own members. To better understand why the Save Act is troublesome, one needs to know something about the history of collegiate sports.
The origins of and the issues facing college sports
In recent articles on college sports, Tho Bishop and I have alleged that the current scene in college sports is an example of anarcho-tyranny, which Bishop defined as “the state-driven phenomenon of criminalizing the enforcement of basic civic norms while increasingly restricting the liberties of law-abiding citizens.” The problem has been that the courts, both state and federal, have decided to apply strict anti-trust laws to the actions and rules of the NCAA, which has created a chaotic situation that is endangering the landscape of collegiate sports.
By labeling several rules as creating a “restraint of trade,” the judges have made it very difficult for the NCAA to set eligibility requirements, not to mention enforce rules that were put into place about a century ago. The current situation is one in which revenue-producing sports like football and men’s basketball will thrive, but not other collegiate sports, as the model under which the NCAA has operated for many years resembles former regulated industries such as passenger airlines and telecommunications.
In other words, if college sports were forced into a “no restraint” situation, the entire NCAA apparatus as we have known it for more than 50 years would simply disappear, or at least there would be much pressure put on the system, as the only consistently profitable sports in college are football and men’s basketball. However, because of Title IX of the Education Amendments Act of 1972 forbids discrimination against female athletes, most collegiate athletic programs would be facing impossible situations.
The United States is unique around the world as the only country in which the bulk of amateur athletics is run through the collegiate system. (Club sports are dominant elsewhere in the world.) If one wishes to continue one’s sports career beyond high school, the only game in town (apart from professional baseball, which drafts players right after they leave high school) is college sports.
The NCAA was founded in 1906 at the urging of President Theodore Roosevelt to deal with the deaths and horrific injuries that were occurring in the relatively new sport of football. Over time, the organization became the governing body of college sports. While paying athletes was discussed, the members of the organization decided to follow a strict amateur code of conduct, which meant that while athletes might receive scholarships to pay for tuition and other expenses, direct payment to players was prohibited. True, this did not keep boosters and other program supporters from funneling extra money to star players, but whatever athletes might have received under the table was minimal compared to the huge monetary sums being paid out now.
Not only did the NCAA’s leadership impose the amateur code on its athletes, but it also restricted television rights in football, allowing only one collegiate game a week to be shown on television. (The organization’s reason was that televising multiple games would reduce attendance at those games, something that did not happen.) However, as often happens in restrictive or regulated situations, the introduction of new technologies put pressure on the old arrangements, and here it meant the explosive growth of Cable TV and the founding of the all-sports channel, ESPN. Suddenly, there were multiple outlets to broadcast college sports, and the money that accompanied those outlets was too much for college football to ignore.
However, the NCAA resisted multiple broadcasts, several universities, including Notre Dame University, founded the College Football Association, which negotiated its own TV package. In return, the NCAA threatened the CFA members with sanctions in all sports, which led to some universities suing the NCAA on anti-trust grounds, with the CFA members winning.
Immediately, the new money began to flow in, but while the NCAA stuck to its amateur code for the athletes, coaching salaries quickly moved upwards. For example, when Coach Barry Switzer was leading the University of Oklahoma’s football team to national championships in the 1970s, he was paid $24,000 a year. (For that matter, the legendary John Wooden, who led UCLA’s basketball team to 10 NCAA championships before retiring in 1975, never made more than $35,000 a year.)
Coaching salaries quickly moved into six figures and then, in the 1990s, seven figures and now eight. For example, LSU is paying its football coach, Lane Kiffin, $13,000 a year. None of this would have been possible in the one-broadcast-a-week era, but television money has changed everything.
The NCAA as a regulated “utility”
While coaches’ salaries soared, the NCAA policies elsewhere didn’t change. Other than tuition, room, and board, athletes could receive nothing else. To better understand these rules, one should realize that the NCAA model has been similar to what we saw in regulated industries like passenger airlines until 1978 and telecommunications until the AT&T breakup in the mid-1980s. In both of those industries, the profitable portions of the businesses were used to subsidize the unprofitable divisions.
For example, the government set rates for the long-haul airline routes that would allow them to subsidize the unprofitable short-haul routes. The long-distance rates for AT&T, set by government regulators, produced enough profit for the company to subsidize its local exchanges.
With the NCAA model, football and men’s basketball raise enough revenues to subsidize all the other sports. (When I was a track athlete at the University of Tennessee, we were constantly reminded that ours was a “non-revenue” sport.) All the other sports, with some small exceptions, spend more money than is taken in television and ticket sales. Given this situation along with Title IX requirements, it would be impossible for NCAA member colleges and universities to continue their sports programs without agreements to limit spending on the profitable sports in order to help fund the unprofitable ones.
The collegiate sports model cannot survive in a free market, nor can it survive the multi-billion-dollar bidding wars in football and men’s basketball. Given the popularity of both sports, they would survive and even thrive in a free market, but the other collegiate sports would be left out.
This is not to say that if the NCAA sports model were left to die that all of the “non-revenue” sports would disappear. For example, both women’s volleyball and basketball are popular, with the NCAA Final Four championships in both sports played in sold-out arenas. Other sports such as softball and baseball have fan followings, and one can imagine entrepreneurial people finding a way to continue these sports.
What would be better than giving the NCAA an anti-trust exemption would be for Congress to abolish anti-trust laws altogether. If that were the case, Congress would not have any excuse to become involved at all in any sport, not just college athletics.
