The major universities that control the NCAA have strayed so far from appropriate campus behavior that they are lobbying, even begging, for antitrust protection from a never-ending cycle of billion-dollar settlements and court rulings. They are They’re angry about their chronic commercial abuse of athletes’ rights. Without federal protection, they argue, college sports would get out of hand. Fine. Give them limited antitrust protection, but with the stipulation that they force universities in these powerful conferences to stop their strip-mining-like behavior. Bring them back to the academic realm.
When you think about the NCAA, you probably feel like a cat in a yarn. The NCAA is dealing with four antitrust lawsuits and five proposed law reform bills filed by everyone from Sen. Ted Cruz (R-Texas) to Sen. Cory Booker (D-Jersey). Each of these bills misses the mark slightly because they mistakenly focus on organizational behavior instead of the actions of the athletes. The crux of the NCAA’s problem is not that athletes are obsessed with name, image, and likeness (NIL) money, despite the congressional testimony of former University of Alabama football coach Nick Saban, who made more than $120 million during his tenure, being blinded by money. It’s organizational dynamics, not personal issues, that plague the NCAA.
The problem is structural flaws and contradictions. “College sports is the only industry in the United States where nonprofits are engaged in a fierce, zero-sum competition,” Kevin Blue, former athletic director at the University of California, Davis, wrote in an open letter to NCAA president Charlie Baker.
A nonprofit’s goal is to fulfill its mission, which in this case is education, but these nonprofits face stiff competition. Average revenue for Football Bowl Subdivision schools grew a whopping 67 percent from 2006 to 2015, far more than the rest of the “non-profit” sector. But that only intensified the pressure to “compete” financially. The massive revenue the schools raked in was diverted from a clear connection to the actual education and well-being of student-athletes. Instead, the money flowed into ridiculously expensive luxuries and the pockets of coaches and athletic directors who could help them “win.”
This huge gap between profit and mission is the real cause of the current crisis.
No one can explain this dynamic better than Blue, a former Stanford golfer who earned his MBA and PhD while teaching in the athletic departments at his alma mater and the University of California, Davis. The problem, he says, isn’t one of “deficient leadership” or “greed.” University presidents and athletic directors simply did what people do in a competitive economy.
“From a behavioral economics perspective, financial decisions in college sports have been perfectly rational within the current structure of the system,” he writes. They have pursued their own competitive interests, which he sees as “a scourge to the system.” “A system that eats everything it can kill”
With the systemic dynamics precisely explained, the answers begin to take shape. First, it’s clear that the Power 5 schools cannot be allowed to make new rules because that would only allow them to continue their “eat and eat” practices. This is clear from their proposed antitrust settlement, where they are trying to push 60 percent of the schools’ share of the $2.8 billion settlement onto the shoulders of smaller universities and colleges that aren’t even named in the lawsuit.
Alabama should eat its own rotten food instead of pushing it onto Seton Hall.
Congress should reject any antitrust exemptions until these conditions are adjusted. As lawmakers craft limited antitrust protections, they should also seek fundamental reform of the NCAA’s disorganized and mission-defying structure. Starting from this premise, “extracurricular programs that develop student talent through performance contests and events are education Expert-led programs teacher“The Drake Group, a think tank of academics that has consulted with lawmakers on college sports, wrote the following, emphasis mine:
Here’s a perfect example: Speaking of Saban, Congress could pass a bill stipulating that sports revenues must be used to directly benefit athletes in an amount “equal to or greater than the combined compensation and benefits of coaches and staff.”
This proposal comes from the Drake Group, and it’s great. Now we can cut the strings off the cat. If Alabama wants to pay its football coach a whopping $11 million a year, then they should dedicate that same $11 million to education-related benefits for the athletes on the other side of the ledger. Want to restore reason and fairness? And that’s what will happen.
It’s amazing how much common sense has emerged from this structural fix: It caps payroll spending, curbing the worst kill-eat-eat behavior without stifling competition.
The NCAA is in the worst crisis of its 118-year history. But here’s the good news: Congress has the organization in the shape it wants. They have all the leverage they need, and they should use it. Fix this organizational problem first, and the rest of the solutions will follow.
