The End of Amateur Hour for the NCAA

The End of Amateur Hour for the NCAA

Eric Posner,

CHICAGO – Last week, as the National Collegiate Athletic Association’s “March Madness” basketball championship neared its conclusion, the US Supreme Court heard a case brought by Shawne Alston, a former college football player, against the NCAA. Alston claims that the NCAA may not restrict certain types of compensation for student-athletes.

But the case highlights a broader, long-simmering complaint: In the name of preserving amateurism in college sports, the NCAA operates an exploitative system that enables a handful of universities to earn millions of dollars from the work of players who are neither remunerated nor even (in some cases) afforded a decent education.

The Court faces a paradox. Everyone agrees that the NCAA should be allowed to preserve amateur sports, which by definition must be unpaid for the players.

But, because student-athletes are barred from sharing in television and box-office revenues, that money flows entirely to the universities, which in turn often pay multi-million-dollar salaries to coaches.

In any other part of the economy, an agreement among employers to suppress workers’ compensation is illegal.

Amateur sports are legal, of course, but that is because they are normally – in economists’ terms – examples of consumption (people do it for fun) rather than production (people do it in order to enable others to consume an entertainment product).

To understand this distinction, suppose that a group of theater owners agreed among themselves not to pay actors, musicians, and other artists who perform at their venues before a paying audience.

The theaters could argue that they are in the business of providing “amateur theater,” implying that they could not pay the artists even if they wanted to.

Facing zero labor costs, they could rake in profits on the backs of struggling artists who are willing to accept gigs out of love of their craft and the hope of a professional acting career, while subsisting on wages from day jobs as waiters and baristas.

Fortunately for the artists, US antitrust laws would prohibit this wage-suppression scheme, which hurts not only actors, but, contrary to appearances, consumers as well.

Sooner or later, all the actors who could not afford to work for free would simply stop acting, resulting in less theater overall, and thus less choice and higher prices for consumers.

This type of anticompetitive scheme, which hurts workers and consumers alike, is precisely the behavior that antitrust law tries to stop.

The Alston case is a bit more complicated because the NCAA manages sports leagues.

The law recognizes that when companies own teams that compete against one another, they should be permitted to enter agreements to ensure that play between teams is fair and exciting.

Hence, professional sports leagues are allowed to cap the amount of money teams may spend on player salaries so that teams in larger markets do not obtain an insuperable advantage simply by spending more money to attract the best players.

But in return, teams agree to share the proceeds with the players, based on contracts negotiated by player unions.

The NCAA’s defense, therefore, boils down to the claim that college football and basketball fans would stop watching if universities started paying their players what they could command in the market or through fair deals negotiated between teams and unionized players.

In the language of economics and law, amateur play is a “product” that differs fundamentally from professional play, and people will continue to pay for it only so long as it retains that quality.

But is it true? Nowhere else in the economy does such a situation exist. Patients do not want their doctors to work without pay, nor do consumers demand that the cars and computers they purchase to be manufactured by unpaid laborers.

On the contrary, most people would bridle at the thought, just as many already participate in boycotts of companies that use underpaid or otherwise mistreated foreign labor.

Pretty much everyone agrees in principle that workers should be paid a fair price for their work, set by the market.

The bizarre notion that consumers enjoy watching college football and basketball precisely because the participants are unpaid is rooted in the idiosyncratic history of college athletics, which has generated cultural associations that the NCAA has ruthlessly exploited.

There once was a time when these sports truly were amateur, because universities made no or very little money from them.

But in the case of football and basketball, the situation gradually changed, owing to a number of largely random factors (after all, most other college sports still have tiny audiences and do not generate revenues).

A bit like professional wrestling, the appeal of college football and basketball rests on a carefully cultivated fiction: the players are scholars who play for the love of the game.

The audience for the fiction doesn’t really believe it. Scandals involving players being paid under the table have burst that illusion. But the legal basis of the NCAA’s restrictions nonetheless continues to depend on it.

What would happen if the courts stopped endorsing the fiction? For starters, they could no longer tolerate the NCAA’s violations of antitrust law.

The workers who currently staff college football and basketball teams would then need to be paid a fair wage by the universities that hire them, just like IT professionals, custodial workers, and professors.

Or, the universities might stop competing for players by offering them lavish accommodations and under-the-table benefits.

Instead, talented youngsters would have a choice between joining professional sports teams (which would likely multiply in expanded minor-league systems) and getting an education while playing their sport after class, just for the joy of it. Would that be so bad?

Eric Posner, a professor at the University of Chicago Law School, is the author, most recently, of The Demagogue’s Playbook: The Battle for American Democracy from the Founders to Trump (All Points Books, 2020).

Copyright: Project Syndicate, 2021.