Over the last decade, the National Collegiate Athletic Association (NCAA) has struggled with the legality of policies that restrict athlete compensation, particularly for “name, image, and likeness (NIL).” In the aftermath of losses in antitrust lawsuits and mounting legal and political pressure, the NCAA allowed student athletes to profit from their NIL beginning in 2021. House v. NCAA (2021) is perhaps the highest profile antitrust class action case involving NIL, where a recently finalized settlement will bring sweeping change to intercollegiate sports.
The House v. NCAA settlement requires colleges and universities, among others, to pay damages for previously restricted NIL and compensate student athletes through a complex revenue-sharing system over the next decade. The major beneficiaries of the settlement are athletes in high-revenue, Division 1 men’s football and basketball, and women’s basketball programs. The reality, however, is that the financial penalties will have an impact on schools across all Division 1 programs.
Many of the headline-grabbing changes in college sports, including cutting low-revenue programs and increased use of the transfer portal, predate the recent House v. NCAA settlement. But schools also made changes in anticipation of the final settlement, which enshrines a semi-professional model of high-revenue college sports and puts it on steroids. For example, NIL values are skyrocketing, the NCAA’s transfer portal is clogged with student athletes, coaches are resigning, expenses for top college basketball programs are in the eight-figure range, and athletic directors are being replaced with general managers.
This transformation will have spillover effects on everything from high school recruiting, to the viability of the Olympic development program, and the health, safety, and education of young adults. More broadly, the House v. NCAA settlement brings an end to the principle of “amateurism” that has guided the NCAA’s approach to intercollegiate athletics for the last 90 years. This Progressive Policy Institute (PPI) white paper makes the case for why the impact of the House v. NCAA settlement on intercollegiate sports creates a public policy problem that warrants a federal legislative solution.
There is no doubt that antitrust enforcement is an important tool for protecting competition in labor markets for student athletes. But the impact of the House v. NCAA settlement makes clear that it is not the appropriate forum for managing policy around college sports in the U.S. PPI’s analysis unpacks a decade of data from the March Madness men’s basketball tournament to examine the impact of the NCAA’s NIL policy and anticipated fallout from the settlement. The implications of the analysis can be extended to other high-revenue college sports. Major takeaways that highlight the magnitude of change in the March Madness tournament include:
These results support PPI’s recommendations for comprehensive federal legislation that mitigates the adverse effects of the House v. NCAA settlement and reframes a model of U.S. college sports under a modern version of amateurism that makes the welfare of student athletes the most important priority.
