The NCAA Wants an Antitrust Exemption. Should They Get One?

In early February, Tim Walberg, incoming chairman of the House Committee on Education and the Workforce, asked GAO to investigate college sports. He noted, “In 2022, the median revenue generated … for Division I college athletics was $8.4 million while the median total expenses were $30.3 million.” A $20 million difference does raise serious questions about how universities are spending their money.

Of course, these questions quickly land you in the thicket of challenges that make college sports a political flash point. At the center is the NCAA, which has been reeling from recent changes driven by antitrust suits.

The first big change was NIL. Following a 2021 loss at the Supreme Court, the NCAA began allowing student-athletes to monetize use of their name, image, and likeness (NIL). That’s how 19-year-old Jeremiah Smith, Ohio State’s wide receiver, accumulated a value of $4 million this year. Some of that comes from brand deals, but much of it comes from “donor collectives,” in which donors pool funds and find creative ways to give them to student-athletes. A University of Iowa donor pool recruited a quarterback by promising “a job delivering meals to seniors and visiting children in hospitals.” It pays $600 an hour.

And now there’s the likelihood of revenue sharing. Last year, the NCAA agreed to the House settlement to end a class-action antitrust suit. If the settlement is approved, participating schools will pay student-athletes a portion of athletic revenue directly. Each Power 4 school would share about $20 million with student-athletes next school year, about a fifth of annual sports revenue.

These developments, all driven by big money, have changed college sports dramatically. This matters not only for sports fans, but also to people concerned with the character and culture of American universities. The money driving these change will continue to roll in, and so will the rapid pace of change and the questions it raises.

How can colleges balance fiscal responsibility with student-athletes’ rights? For years, many colleges have spent more on athletics than they took in, prompting complaints that “It’s time to stop saddling students with the out-of-control costs of Division I sports.” Revenue sharing could cause that deficit to grow. On the other hand, the median salary of a Power 4 football coach last year was $6.4 million, dwarfing the median NIL earnings for the entire roster of athletes. The mean earnings are more comparable, with 1 coach compared to 140 players. If school budgets can fund high coaches’ salaries, should student-athletes be kicked to the curb?

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How can colleges balance these changes across sports? Revenue sports—overwhelmingly football and basketball—have long subsidized non-revenue sports, like tennis and archery, a system that raises more uncomfortable questions: As Roger Pielke put it, “the labor of mostly black athletes generates income that the universities use to support the tuition, fees, sports participation (and more) of the other college athletes, who are mostly white.” Fair enough, but will revenue spent on football and basketball players mean more cuts for non-revenue sports, which are already facing controversial NCAA-imposed roster limits?

And then there’s the familiar conflict between athletics and academics. The NCAA aims to provide a “world class” academic experience for student-athletes, but with cheating scandals and low-rigor coursework, it’s never been clear that they’re living up to that mission. Now that donor collectives use NIL deals in recruiting, the number of college football players entering the transfer portal has doubled. Transferring schools multiple times in college will inevitably disrupt a student’s studies. Should the NCAA intervene?

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There is more. Men’s sports generate more revenue and NIL deals than women’s sports. How will that square with Title IX? If student-athletes become employees of their universities, could they technically be fired for poor performance? Could elite football programs break off from the NCAA and form their own league?

The NCAA may be the only governing body that could adjudicate these questions. The organization, however, struggles with weekly antitrust lawsuits, the kind that led to the NIL and revenue sharing changes. The NCAA has pushed for one path out of this thicket, a federal antitrust exemption from Congress. Proponents argue that an exemption could salvage amateurism across the full range of college sports. Opponents argue that the costs would be borne by student-athletes.

To unpack this question and hear the best arguments for and against, we’re hosting a public debate on Thursday, February 27 on the motion “Congress should grant the NCAA an antitrust exemption.” Val Ackerman, the Big East commissioner, and Matthew Mitten, director of the National Sports Law Institute will argue for the motion, with Jim Cavale of Athletes.org and Katherine Van Dyck, an antitrust and consumer-advocacy consultant, arguing against.

If you’re concerned with the state of the “great American institution” of college sports, we hope that you’ll join.