Federal law, not NCAA antitrust settlements, should drive new college sports model

Diana Moss and Jason Gold write that the major private antitrust lawsuit over the way the National Collegiate Athletic Association regulates student-athlete compensation is overstepping its authority by changing the model of college sports in the United States. Instead, a paradigm shift in college sports should be considered and addressed through the legislative process.

The prospect of playing sports in college has motivated countless young Americans. How could it be otherwise? The simultaneous benefits of earning a degree, the athletic training and camaraderie of a team, representing a college, and the potential for a future career as a professional athlete are all at play. Since the first college football challenge in 1869 between Princeton and Rutgers, colleges have been the primary venue for young, amateur athletes to pursue these worthy goals. The development of the traditional “amateur” model of college sports has at times challenged these considerations. But more recent changes in the legal and economic complexities surrounding college sports are now redefining the norm.

A fundamental change to the long-standing National Collegiate Athletic Association (NCAA) model came in 2021. Alston v. NCAA case. There, the Supreme Court ruled that the league violated antitrust law by limiting athlete salaries in order to preserve the spirit of amateurism.

The NCAA’s court loss meant that student-athletes are now able to control and profit from name, image and likeness (NIL) agreements and other endorsements. But settlements in ongoing private antitrust class action lawsuits will also affect how colleges share revenue from athletic programs by paying student-athletes directly.

The speed at which changes are occurring in the college sports model creates both significant potential and significant challenges. Whereas for decades college athletes were not paid under NCAA rules, the opposite is now the case. For example, NIL contracts now total more than $1 billion, with more than 450,000 student-athletes potentially affected. Some experts say the athlete compensation train left the station years ago, and the paradigm shift in the structure of college sports is a positive outcome.

However, this view overlooks the fact that the primary catalyst for the radical change in the model of college sports is a collection of private class action lawsuits against the NCAA. Private antitrust litigation is an extremely important tool for providing redress to victims of antitrust violations. Yet the settlements that have resulted from these antitrust cases reflect the interests of relatively few student athletes, yet they have broad implications for All student-athletes. As a result, such agreements are not “fit for purpose” to address the myriad political issues that are evident in the college sports model.

By far the most extensive private antitrust case, House v. NCAA seeks compensation for financially harmed Division I athletes. In addition to $2.75 billion in damages for outstanding cases, the proposed settlement also seeks an injunction against future athletes. By creating a sweeping remedy in the form of a court order regarding future revenue sharing between schools and athletes, the settlement essentially seeks to create a new model for college sports. That model would directly or indirectly impact everything from how much colleges can pay athletes to the potential unionization of college athletes, possible new antitrust immunities and the number of college conferences.

The elephant in the room, however, is that college sports and athlete compensation is a “small numbers, big money” issue. Only a small fraction of college athletes, mostly in Division I football and basketball programs at major universities, draw significant NILs and earn six-figure salaries. Despite this, the proposed settlement will affect virtually everyone college athlete. His decisions and consequences can therefore have potentially huge side effects.

For example, while top collegiate athletes in major sports may benefit greatly from NIL contracts and other compensation models, athletes in less commercialized sports may find their programs are limited or underfunded as schools redirect resources to more profitable departments. This can lead to decreased diversity and equity in athletic programs, undermining efforts to provide broad opportunities for all student demographics, and even impacting Olympic development programs, an important path for student-athletes.

The question of why craftsmen settled in House v. NCAA felt empowered to go so far as to reimagine college sports. We know that the future of college sports should not be determined solely by a private antitrust enforcement settlement. The settlement, which is not public, emerges from opaque conversations that take place outside the public eye and may exclude the voices of the most directly affected stakeholder—the student-athletes themselves. The settlement emerged from a process and incentives that are ill-suited to preserving worthy goals, streamlining complex policies, and addressing the multiple stakeholders that define the college sports enterprise.

This House v. NCAA The settlement moves college sports closer to the professional model at an unsustainable pace. The settlement seeks to make permanent changes without consideration or debate regarding adverse long-term impacts, bypassing the requisite, in-depth public policy inquiry and discussion that, for example, the legislative process provides. This preferred policy path, while imperfect, is far more transparent and inclusive, and is particularly relevant to amateur culture and the academic goals of higher education institutions.

The estate in House v. NCAA will ultimately go to a district court judge who must approve it under the Federal Rules of Civil Procedure as fair, reasonable, and appropriate. At the Progressive Policy Institute (PPI), we strongly encourage the judge to reject the settlement, at least in its current form. To reject its provisions as too far-reaching would slow down the sea change in college sports that it envisions. It would provide space to consider more appropriate policy tools. At PPI, we support a more cautious approach to a new model for college sports, based on three fundamental principles: