Experts: Political move could help NCAA avoid more court woes

Back to TopCommentsE-mailPrintBookmark and Share

The National Collegiate Athletic Association has an option that provides possible political protection from future rulings like last week’s licensing decision, which further opens the door for athletes to be paid and threatens to undo the foundation of the organization.

U.S. District Judge Claudia Wilken ruled Aug. 8 that the NCAA’s current structure creates a cartel that violates antitrust laws by limiting what schools can offer athletes. She said college sports’ governing body can no longer cap scholarships below the cost of attendance, and that players should be paid for the use of their names, images and likenesses.

While the Indianapolis-based NCAA said it will appeal the ruling, CBS Sports analyst and attorney Len Elmore said the organization should try a different route—asking Congress for an antitrust exemption that, coupled with some reform, could help the NCAA better police its far-ranging domain and maintain the basic model of college sports.

“Congress may have a responsibility to invoke its power, provide the carrot of an antitrust exemption to let the sheriff come in and tame the Wild Wild West,” Elmore, 62, a former All- American basketball player at the University of Maryland, said. “But you have to do it within these parameters, otherwise you lose the privilege.”

Those parameters include accepting the tenets behind Wilken’s 99-page decision, which struck down the NCAA’s claims that its current restrictions preserved competitive balance and amateurism in college sports. It stopped short of completely opening the market, saying the NCAA could limit payments to football and men’s basketball players as long as the cap was above $5,000 a year.

Lawsuit baseline

“This sets a baseline for some of the other lawsuits that are coming down, specifically the antitrust lawsuit being brought by Jeffrey Kessler, which is the real threat to the NCAA going forward,” said former Duke University basketball player Jay Bilas. Bilas is now an analyst on ESPN and an of counsel lawyer with Moore & Van Allen in Charlotte, North Carolina.

The lawsuit brought by Kessler, a labor lawyer who helped bring free agency to the NFL, seeks to remove all restrictions on athletes receiving their full market worth, not just in regard to name, image and likeness. It could result in free agency at the college level, which Elmore said would be “earth-shattering.”

In current broadcast contracts alone, the NCAA and its five richest leagues are guaranteed more than $31 billion total. The largest athletic programs pull in more than $100 million in annual revenue.

NCAA appeal

The NCAA announced Sunday that it would appeal Wilken’s decision, saying it hasn’t violated antitrust laws and that its restructured governance is a move toward satisfying some of Wilken’s mandates. NCAA spokeswoman Stacey Osburn said no one from the organization was available to comment yesterday.

Andrew Zimbalist, a sports economist at Smith College, said granting a blanket antitrust exemption to the NCAA would allow the organization to maintain its power and continue acting in a “self-interest, hypocritical way.” Like Elmore, he said that a conditional exemption, contingent on benefits for athletes, academic standards and spending restrictions, might provide a middle-ground resolution less chaotic than those offered by appeals and more lawsuits.

“I think it makes sense for Congress to have some hearings to see what kind of limited antitrust exemption that’s conditioned on a variety of factors, what kind of new policy, might make sense,” Zimbalist said.

Federal help

There is a precedent for a possible NCAA move toward an antitrust exemption, according to Marc Edelman, a law professor at Baruch College’s Zicklin School of Business. He said that with its Sports Agent Responsibility and Trust Act, Congress in 2004 “seemed to support, if not indoctrinate” certain aspects of the NCAA’s restraints into federal law.

“Because many of the largest college programs are state universities, it would not be entirely surprising if some members of Congress were willing to grant an exemption to protect the interests of the coaches and athletic directors within their states’ public universities,” Edelman said.

Elmore said an antitrust exemption—and the prospect of losing it—may also improve the NCAA’s enforcement, which has been criticized for its inability to stop violations. NCAA investigators have no subpoena power and can’t penalize false testimony with perjury charges.

Drake group

The idea of an antitrust exemption has been proposed in the past by organizations such as the Drake Group as a way to keep an emphasis on education and curtail spending. University of Alabama football coach Nick Saban has a $6.5 million annual base salary, more than sixteen times that of U.S. President Barack Obama.

“Coaches’ salaries make no sense economically,” said Zimbalist, a member of the Drake Group’s advisory council. The organization is a group of college educators who advocate for academic integrity in college sports.

Gaining the exemption, similar to one the Major League Baseball has had since 1922, would require winning over lawmakers and possible concessions on the NCAA’s part. Last month the U.S. Senate Committee on Commerce, Science and Transportation held a hearing on the state of college sports, with topics ranging from sexual assault allegations against athletes to academic fraud and the growth of revenue.

“People keep saying that amateurism is a sham—it is, but it isn’t,” Elmore said. “Certainly amateurism has to evolve over the years based on market forces and peoples’ perceptions, but nevertheless there’s still an important line to be maintained between professionalism and college sports.”


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. You are correct that Obamacare requires health insurance policies to include richer benefits and protects patients who get sick. That's what I was getting at when I wrote above, "That’s because Obamacare required insurers to take all customers, regardless of their health status, and also established a floor on how skimpy the benefits paid for by health plans could be." I think it's vital to know exactly how much the essential health benefits are costing over previous policies. Unless we know the cost of the law, we can't do a cost-benefit analysis. Taxes were raised in order to offset a 31% rise in health insurance premiums, an increase that paid for richer benefits. Are those richer benefits worth that much or not? That's the question we need to answer. This study at least gets us started on doing so.

  2. *5 employees per floor. Either way its ridiculous.

  3. Jim, thanks for always ready my stuff and providing thoughtful comments. I am sure that someone more familiar with research design and methods could take issue with Kowalski's study. I thought it was of considerable value, however, because so far we have been crediting Obamacare for all the gains in coverage and all price increases, neither of which is entirely fair. This is at least a rigorous attempt to sort things out. Maybe a quixotic attempt, but it's one of the first ones I've seen try to do it in a sophisticated way.

  4. In addition to rewriting history, the paper (or at least your summary of it) ignores that Obamacare policies now must provide "essential health benefits". Maybe Mr Wall has always been insured in a group plan but even group plans had holes you could drive a truck through, like the Colts defensive line last night. Individual plans were even worse. So, when you come up with a study that factors that in, let me know, otherwise the numbers are garbage.

  5. You guys are absolutely right: Cummins should build a massive 80-story high rise, and give each employee 5 floors. Or, I suppose they could always rent out the top floors if they wanted, since downtown office space is bursting at the seams (http://www.ibj.com/article?articleId=49481).