Sports

Meet the Lawyer Out to Destroy the College Sports 'Cartel'

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Go Blue
Clb62 / Wikimedia Commons

The New York Times recently published a fascinating story and Q and A with Jeffrey Kessler, a lawyer on a quest to bring down the NCAA's restrictions on paying players. The lawsuit centers squarely on how such restrictions hurt players who never see a dime of the money they earn for their schools. Kessler believes conditions are right to abolish the faux-amateurism of college sports once and for all:

[Kessler:] "Our case is directed specifically at the core restrictions that prevent schools from deciding for themselves how they want to treat their players. What we are seeking to do is remove the shackles so that the schools can decide themselves what is the fair and appropriate way to take care to their players.

If you have a school like Texas that earns close to $200 million for their football or basketball programs, you might decide it is fair to give some of that to the players who are generating the money once you are no longer stopped from doing so."

Kessler uses direct—some would say libertarian—language in his attacks on the NCAA. He considers the organization to be a criminal "cartel" that prevents schools from giving players market-based compensation:

[NYT:] In a recent decision in the O'Bannon case, the judge ruled that schools should make scholarships cover the full cost of attending, but also set up trust funds for athletes that are potentially limited to $5,000 a year. Is that a good enough result?

[Kessler:] The market should decide what's the result. If a school wants to offer $5,000 a year to their players, they can do that. And if another school wants to offer a different number, they can do that. Someone might say, "Let's put it in a trust fund." Someone else might say, "I'm going to pay through increased health benefits or insurance." Someone else might say, "I'm going to give you enhanced scholarships." That's what markets decide.

Q. In your scenario, couldn't we see schools engaging in bidding wars for teenagers?

A. The players won't get one dollar more than the markets decide they are worth. Schools will make different decisions. Some schools will not want to do this at all.

The Ivy League doesn't offer athletic scholarships — that's not going to change. The idea here is, let schools decide, let's not have a cartel decide. That's what's illegal.

The complicating factor is that colleges exist in a world filled with other market distortions that would frustrate any great sports liberation. Most obviously: State universities get some of their funding by coercing taxpayers, and even though their athletic departments are often separate financial entities, that boundary is sometimes blurred.

The best way to undue all this market confusion is to privatize the universities entirely, of course.

But it's an interesting lawsuit, nonetheless.

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  1. You didn’t mention anything about the players being superlibertarian millenials. wtf

  2. Did I miss the part where colleges are forced to join the NCAA? What’s to stop some schools from leaving the NCAA to form a new league that doesn’t have those restrictions? The NCAA can only be a criminal cartel if it is forcing schools to join.

    1. Nice little Bowl Championship Series (or whatever they’re calling the new format now) we got here. Too bad you and your little cabal can’t participate…it’s a cash cow, I tell ya!

    2. Dere is de NAIA. Dere useta was the AIAW until de NCAA squeeza dem out. De AAU useta sponsor a lotta intercollegiate ataletic competition until de NCAA squeeza dem out.

    3. It wouldn’t matter. The NCAA represents the interests of the colleges. They’re united in their desire to profit greatly off unpaid players.

      This will only change when players unionize.

  3. I love how they ask about “bidding wars.” Most people will tell this already goes on in big-time college football.

    1. *you. Tell you, dammit.

    2. +180000

      (suck it wareagle)

      1. and where was GA Tech at the end of last year, not to mention starting this one?

        1. On probation.

          Over $312.

        2. Answer #2:

          2-0 vs Auburn in our last 2 games.

          And we started Reggie Ball in them to give you a fightin’ chance.

          1. I’ll take things no one cares about for $800, Alex.

            By the way, the 180K was associated with Miss St. Not a shred of evidence that AU floated a nickel.

            1. Everyone knows they made a larger bid.

      2. I will never forgive Teflon Cam for being indirectly responsible for the dumbest season-ruining scandal in history of the past 5 years.

        1. Miss State’s ham-handed effort at using a “booster” as a conduit for getting Cam failed, but scandal? Scandal is giving Gene Chizik a 7 mil buyout.

          1. Why would you hire a guy with a losing record everywhere he had been in the first place?

            1. lot of folks had the same question.

          2. I personally don’t care about what happened and whether or not Cam or Auburn were at all responsible (hell, I’ve long been an advocate of giving boosters the freedom to waste their money on the noninvestment of college signing bonuses). But the NCAA smelled blood, went after Cam, whiffed, and took it out on a bunch of players trading the free shit they didn’t want for products that they did, and I am unfairly blaming them for the whole ordeal.

            Really my beef is with the NCAA, but for some reason I just find it easier to blame Cam instead (obviously a combination of racism and SEC envy).

            1. ah, the Ohio State thing. Everything you needed or wanted to know about NCAA feckless in one tidy bundle. I know we ascribe it to govt, but I say the NCAA originated the FYTW clause.

    3. Let’s just say Robert Nkemdiche didn’t choose Ole Miss for their winning tradition and high level academics…

    4. Now that FSU has pioneered a new strategy in funding insurance policies, I think we can all be certain that the boosters are back in the mix.

  4. The President of Georgia Tech considered taking them to D3 in the late 70s. Instead of joined the ACC [insert obvious joke here].

    If this kind of stuff goes forward, I wont oppose us going D3. We cant win an arms race anyway, with the higher academic standards we require. According to a study from a few years back, we were the only FBS public school whose football team averaged over a 1000 SAT score {2 part}, Im sure that maybe Stanford or Vandy or Northwestern was also there. Despite having the highest SAT scores, we also had the largest gap between football and general population scores. Schools like Memphis and Louisville were near the bottom in football player scores, but with a tiny gap, as the scores for the general student population is low too.

    1. Don’t be dissing Memphis State!

      My alma mater took Penny Hardaway who was a prop 48 athlete out of high school and within a semester had him on the Dean’s List.

      How’s that for larnin’ someone?

    2. And herein lies the problem: we’re scrapping a system that benefits a great number of students for those few programs that can afford to pay. That’s a shitty outcome.

  5. Nothing libertarian about this, Robby. Please do not inject politics into issues where it does not belong.

    The NCAA is not a cartel; you have no obligation to be in the NCAA, period. For better or worse, much of the market for NCAA sports is because it is tied to academics, or at least academia. The part that bugs the shit out of me in almost every single story around this issue is the total absence of the observation that these young men and women are adults who are capable of freely contracting with an entity. If they don’t like the contract, they can go elsewhere.

    1. And whatzisname at Milwaukee showed that even with the stupid NBA 1-year rule, that there are options. Go make a million or so playing in Europe for a year instead of college.

      Football players have less options.

      1. But paying players in college is going to narrow those options even further, because other schools are going to scale down or end their programs altogether.

        The fact is, is that when we’re talking about paying players, we’re talking about screwing over 99% of players who aren’t worth much for the 1% who are.

        1. Oh, the NCAA does plenty to screw over the 99% as is. Most infractions are over petty amounts and levied against kids working summer jobs.

          Of course, this whole issue is moot if you were to just allow the boosters to get into bidding wars with each other.

          1. I know, but I still think this makes it worse.

      2. Brandon Jennings.

        Dude has my respect forever for that move.

        1. He puts lie to any bitching and moaning by players. If you don’t like the deal the NCAA gives you, take another one.

    2. The NCAA is not a cartel; you have no obligation to be in the NCAA,

      Who said that’s a defining feature of a cartel? In fact, it’s probably a disqualifying feature of a cartel, since if you have a legal monopoly, you don’t need to be a cartel.

  6. why does anyone assume they don’t get paid as it is?

  7. It is a cartel, in the economic sense. Schools like rules that prohibit spending wars on athletes, so more surplus accrues to them. There’s always an incentive to defect from every cartel, so schools periodically have cheaters.

    Students go to schools in the cartel because they have the reputation and the attention. It would take several major schools defecting from the cartel and establishing a rival regime (or loose playoff schedule) for top players to consider them.

    Many students who want to bypass the cartel simply skip college or drop out early, depending on the rules and customs of their sport.

    That said, I’m sympathetic to the argument that it’s a voluntary cartel. But I’m not knowledgeable enough to know the extent to which the NCAA is propped up by subsidy or regulation of the state.

  8. Yes, the NCAA is a cartel. The only way to get rid of it is to use anti-trust law. Since when are Libertarians in favor of anti trust enforcement?

    And these players are paid. They are paid in kind with education. Yet, Reason seems to think that is not enough. Since when are Librarians in favor of a minimum wage and outside interference with private contractual relationships?

    Reason really does throw out its entire ideology on this issue.

      1. It is almost like you enjoy being butt hurt. Grow up.

          1. Is that you Mary? You really had us fooled for a while.

    1. Spot on John. I completely agree and I don’t see why any libertarian would have a different take on this.

      The ONLY upside I see to paying players is that I am a Longhorn and my super rich school would win every national championship for the next 20 years.

      1. All the “amateur” rule is is a salary cap. That is it. They don’t want schools to pay players because they want competitive play and they want to keep costs down. They are colluding with each other to set a wage scale. That sucks if you are a player I guess. But I don’t’ see how they don’t have the right to do it.

        1. That sucks if you are a player I guess.

          The gray area here is that this “salary cap” wasn’t established via collective bargaining.

          The fact is some teams want to bust the salary cap completely. Fine by me, but the NCAA is trying to force a non-collectively bargained salary cap onto the players and the teams. This is why you’re hearing rumblings of the 40 biggest football “schools” trying to break away from the NCAA.

          1. Why does it have to be established by collective bargaining? It was established by the cartel. That is what cartels do. Unless you want to embrace anti-trust law, what is the problem with that?

            1. I don’t really care, I just think it makes perfect sense for the players to unionize so that it can be cartel vs. cartel. The NCAA doesn’t want that. THAT is what I have a problem with, the NCAA trying everything they can (with lawyers) to prevent players from forming a union.

              Some schools obviously don’t want unionized players because they’ll make a lot less profit if the players get a bigger share. I hope the bigger schools break away from the NCAA on their own. then the schools that give a shit about amateurism can form their own cartel, and the schools that want to run minor league pro operations can form their own and the market can decide which cartel they like most.

              1. I would give anything to see the players unionize, provided that only some teams did so. I would pay big money to see Northwestern’s Union team with its mandated hours and working conditions go out and play the non union shop from Nebraska. It would be like watching Toyota play a football game against GM. The resulting slaughter would be delicious.

                And I don’t think the players unionizing would be a good thing. All it would do is benefit these players at the expense of ones who are happy to work cheaper. Really, that is all unions ever do.

                1. Really, that is all unions ever do.

                  Thanks to federal meddling. Unionization is not in itself a bad thing. Now if multiple unions that compete with each other were allowed to coexist and pop in and out of existence according to demand, unionization would actually benefit everyone over the present circumstances of Wagner Act unionization. Unions would not have the businesses over a federal created barrel, and labor would be better represented by associations that are not immortal and immovable before the law.

    2. It seems libertarians have been for anti-trust since Gary Johnson sued the debate commission.

    3. They are NOT paid with an education. Get that myth out of your repertoire immediately.

  9. Publicly funded organizations forming private cartels are bad except in sports because GO DUCKS! TIGERS! SPARTANS! WILDCATS!Q Meh.

    1. It’s a good thing money isn’t fungible or this would look a bit of a problem:

      “There is a very direct impact” when state funding falls, she said. “It forces us to raise tuition.”

      In 2007-08, before the recession hit the state budget, UO received $80 million in state funding.

      The university served about 14,500 in-state students that year, Moffitt said. This year it is projected to serve about 14,400 — on $32 million less from the state.

      “Every dollar of state support that we get is a very important dollar to us,” Moffitt said. “We appreciate the state support in tough times. Every dollar that we are able to get in state support helps us to fulfill our mission.”

      But the involvement of the University of Oregon athletic teams in the NCAA, totally private.

      1. Just because it is not private doesn’t mean it is anyone’s but the taxpayers of Oregon’s business.

        If the taxpayers of Oregon are fine with funding a football team, why the hell should we care? Isn’t that their problem?

        We can argue forever about whether college sports are good or bad. But even if they are the spawn of Satan, how does that justify a court putting an end to them or telling colleges how they should be run?

        It is not a legal issue and didn’t belong in court. If Ed O”Banion didn’t like the terms of his Letter of Intent, he shouldn’t have signed it. The Court should not be voiding it and awarding him damages on the “its not fair” rule.

        1. Just because it is not private doesn’t mean it is anyone’s but the taxpayers of Oregon’s business

          Really?

          1. Even if it is “our business”, it is just another waste of money. There are about a billion of those. Again, how is that a legal issue and not a “damn I wish the government were smarter” issue?

            What is your point other than you are Tone Police level butt hurt about college sports?

            1. I think college sports are great, John. I think corporatism sucks. If the NCAAs members decided to give up that sweet, sweet tax money and actually become private organizations then they can do whatever the fuck they want.

              There are about a billion of those.

              Tu quoque, really?

              1. They do whatever the state governments tell them to do. Just because they are state funded doesn’t mean the courts get to decide what they do.

                And I fail to see how paying players would improve things. It would just raise costs and make athletics even more of a drain on taxpayer money than it already is.

                Fuck the players. No one makes them take the deal and they are not entitled to more compensation anymore than someone working at McDonalds’ is entitled to $15 an hour.

                1. It would just raise costs and make athletics even more of a drain on taxpayer money than it already is.

                  The revenues that the schools take in from the games would EASILY be enough to pay off the players. And if the players weren’t prevented from ‘unionizing’ you might have a point about them not having a right to demand anything more.

        2. If the taxpayers of Oregon are fine with funding a football team, why the hell should we care? Isn’t that their problem?

          If Oregon’s taxpayers were ‘fine with funding a football team’, they wouldn’t funding it through taxation. /derp

          1. Ding, ding, ding.

  10. Here’s a novel idea, Figure out a way to make the bloody NFL and the NBA (and everybody else) to pay for their own minor leagues! Hell man, as it is their players get job training and the leagues save an ass load of money by fucking the taxpayer……..

  11. Sure, but take the athletes out of school and let them be employees of teams in a league that no longer even pretends to be related to college educations.

  12. Big money college athletics has ruined universities, mostly through the cynical fiction that 90% of scholarship athletes resemble legitimate college students at all. The last thing we need to do is to pay college athletes. Instead, we need to go entirely the other direction, and end the corruption which athletic scholarships have caused.

    So we need three reforms:
    1) Abolish athletic scholarships;
    2) Require athletes to meet the same college entrance requirements as any student;
    3) Abolish the NCAA.

    Let the NFL and NBA start their own minor leagues and recruit out of high school like MLB. And return college athletics to amateurism.

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