The U.S. Supreme Court handed college athletes a unanimous decision that opens the door for players to gain increased compensation. Justice Neil Gorsuch wrote the 9-0 majority opinion and Justice Brett Kavanaugh publishing a stinging sidebar in which the high court struck down a National Collegiate Athletic Association policy that limits player benefits. At least for now, college athlete perks will somehow need to be tied to an educational component. But how long will it take for major universities to massage the rules and turn recruitment into bidding wars?
According to reports, college football’s so-called “Power 5” conferences generate revenue upwards of $4 billion. The NCAA continues to expand its television footprint, add bowl games, and recently debated including 12-16 schools in its national championship playoff system that already benefit approximately 65 colleges.
“Big-time football ought to be something unto itself,” former chairman of the NCAA board of governors Walter Harrison reportedly said. “They ought to be separated entirely from the rest of the NCAA because the money flowing into that sport is just different.”
Similarly, the NCAA basketball tournament generates $800 million while the sport earns approximately $1.1 billion annually. That’s big money that gets distributed to the “amateur” organizations and higher education institutions.
Players who draw massive television audiences and drive memorabilia sales live on a modest school stipend. It’s not uncommon for young athletes to spend long days attending classes, practice, training, rehab, and having to study at night. Although many walk away with degrees, colleges and universities enjoy a growing money train based on their labor and efforts. That’s largely why conservative and liberal justices alike saw restricting fair compensation as an anti-trust violation.
“The NCAA is not above the law. The NCAA couches its arguments for not paying student athletes in innocuous labels. But the labels cannot disguise the reality: The NCAA’s business model would be flatly illegal in almost any other industry in America,” Justice Kavanaugh wrote. “All of the restaurants in a region cannot come together to cut cooks’ wages on the theory that ‘customers prefer’ to eat food from low-paid cooks. Law firms cannot conspire to cabin lawyers’ salaries in the name of providing legal services out of a ‘love of the law.’ Hospitals cannot agree to cap nurses’ income in order to create a ‘purer’ form of helping the sick. Price-fixing labor is price-fixing labor.”
Although the NCAA may have had good intentions when school sports were primarily about pride, athletic accomplishment, and formed a proving ground for entrance to the Olympics, it’s evolved into a massive, multi-billion-dollar money grab. Large schools with significant financial war chests are likely to move quickly in their recruitment and retention efforts. The high court slapped down the NCAA limits that prevented them from offering back-handed bribes. Players can theoretically lobby for free study semesters in Europe or pre-paid admission to law, graduate, or medical school. Needless to say, the ruling can have a chilling effect on small colleges that lack resources and advanced degree opportunities.
The seemingly unified Supreme Court may have inadvertently put colleges on a slippery slope. They sidestepped issues such as compensation for likeness, endorsements, increased stipends, and straight-up cash. Unless Congress and the White House craft an anti-trust exemption that provides compensation details, college sports appear one step away from going pro.