No Good Answers on Reforming College Sports

By now, Ricochet readers probably know that I take a very dim view of the NCAA, at least insofar as it enforces a cartel that that denies earned benefits to college athletes. The revenues generated by the most popular college athletic programs are far in excess of the cost. The players are a vital cog in that enterprise. Yet the NCAA restricts the number of scholarships that can be offered by an institution, the levels of scholarship that can be received by the players, and the support (or jobs) they can get from outside sources. These actions, of course, are intended to preserve the purity of the sport. But they also work to enrich the athletic powerhouses on the backs of their players.

It was therefore nearly inevitable that some athletes were eventually going to mount their own blitz to dislodge the intransigent NCAA. That time may have now come, for, under the leadership of quarterback Kain Colter, the Northwestern football team is trying its luck in a hearing before the National Labor Relations Board, claiming that they are employees of the University and thus are entitled to be recognized as a bargaining unit. Because there is no material difference among programs (in Division I schools at least) whatever standard applies to Northwestern will apply to all big-time football — and any other collegiate sport in which the package of benefits allowed under the NCAA rules are below the market value of the players.

The union proposal, unfortunately, leaves us with a choice between institutional evils. To recognize the player unions puts enormous stress on the overall system, and could create non-stop negotiations with all the attendant risks. The negotiations could break down, so that a strike interrupts the entire season, to the detriment of schools, players, and fans. The difficulties at the college level will, in turn, throw off the operation of the professional sports system by disrupting training and the draft process. 

But the temptation to recognize unions is still there. As early as 1952, John Kenneth Galbraith, in his book American Capitalism, popularized the elusive notion of “countervailing power” in industrial relations. The idea was that the powerful firms in an industry exerted market power that was best countered by organizing downstream players so as to enable them to go toe-to-toe with these producers. 

The theory is that the power on one side of the market will cancel out the power on the other side of the market. In fact, however, far from there being a wash, the creation of these bilateral monopolies—I have to deal with you, and you have to deal with me—tend to be extremely difficult to manage. There is no way to determine whether the two sides will come to agreement, for strikes are commonplace under this mode. If they do come to agreement, it is not clear whether the prices or wages paid are in some sense more just than those which exist when a single party like the NCAA enjoys market power in an industry. It is wrong, therefore, to treat the second monopoly as a corrective to the first. It is more likely that the breakdowns that ensue demonstrate that two monopolists are worse than one.

Thus it looks as though the social case for the players’ union is, at best, iffy — wholly apart from the (strong) argument that the players do not fit within the standard definition of an employee. The issue is far from watertight, however, because of a recent decision by NYU to recognize a union of graduate teaching assistants organized through the United Auto Workers. That one decision opens up the prospect that students can be treated as having dual status, such that they can be union members in one role but not in both.

There is, of course, some question as to whether the rules for graduate students will apply to undergraduates, a point on which there is little, if any, legal authority. There remains, however, the nagging question of what, if anything, should be done with respect to the NCAA if the union position is rejected. The answer to that question is not easy to find. 

The one factor that the NCAA has going for it is the need for leagues to preserve some degree of competitive balance among the teams. This requires (or so it could be argued) that there be group limits on the packages that can be offered to these athletes, given the imbalance that might result if a tiny fraction of schools garner all the best players, leaving only boring routs or close games between weaker teams.

The really hard question is whether some other device can be used to pry open the NCAA without empowering a union. Perhaps some independent tribunal could set standards in ways that allow for bids up to certain levels? Perhaps rules could be altered so that athletes can receive support from outside sources? I am not, however, impressed with either of these solutions. It is hard to imagine who would sit on an independent board or what its mission statement would require. It is easy to believe that powerful schools could get loyal alums to supply all the extra consideration that a team would desire. 

Thus we’re back to square one. Much as I dislike the current system, I cannot propose one that clearly improves upon it. If forced to choose among the various evils, I think that I would just open the situation up to competitive forces by neutering the NCAA on the basic presumption that cartelization is a bad unless explicitly shown to be otherwise.

Alas, I do not have a lot of conviction in that judgment. Perhaps some readers can shed light on this unhappy situation.