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Supreme Court Takes NCAA to the Woodshed

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The Supreme Court of the United States unanimously affirmed a ruling Monday that provides for an incremental increase in how college athletes can be compensated and also opens the door for future legal challenges that could deal a much more significant blow to the NCAA's current business model.

Justice Neil Gorsuch wrote the court's opinion, which upheld a district court judge's decision that the NCAA was violating antitrust law by placing limits on the education-related benefits that schools can provide to athletes. The decision allows schools to provide their athletes with unlimited compensation as long as it is some way connected to their education.

Gorsuch wrote that the nation's highest court limited the scope of its decision on those education-related benefits rather than delving further into questions about the association's business model. Justice Brett Kavanaugh published a concurring opinion that takes a harder line, suggesting that the NCAA's rules that restrict any type of compensation -- including direct payment for athletic accomplishments -- might no longer hold up well in future antitrust challenges.


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Alston will change everything, slowly at first; but within three years, I fully expect a completely different American sports business landscape. Here are some of the changes I foresee:

The biggest football schools will immediately explore leaving the NCAA altogether and forming a new league that pays players. I believe these discussions have been happening for a long time, but now, they will accelerate. The NCAA FBS football (a.k.a. Division I) includes 130 schools, but the reality is that perhaps only 25 or 30 have the budget and resources to play at the absolute highest level; the rest are schedule-fillers, notwithstanding the rare upset now and then. Alabama, Auburn, Ohio State, Clemson, USC, Michigan, Texas, Texas A&M, Oklahoma and the like will explore a Super League similar to the effort made by Europe’s top professional soccer clubs this spring. This new Super League of College Football will explore direct salary compensation of players, but probably only if they can get other “special” legislation that no other industry gets, such as exemption from workers’ compensation liability.

Schools that don’t have major football programs will explore eliminating the sport. These schools know big programs don’t care about them, and they also know the majors are looking at programs that require more capital. Deploying a football team is enormously expensive, and the vast majority of non-majors simply shouldn’t be fielding one — if the players aren’t properly trained and equipped, it’s too dangerous. Many universities have ignored this, however, and gone ahead anyway. But Alston is going to supercharge the recruiting wars for talent, and many schools won’t, and shouldn’t, keep up.

U.S. Olympic teams will wind up needing major support from the federal government. College football revenue has driven Olympic success for a long time. The popular U.S. women’s national soccer team? Nearly all of its players were trained by highly paid coaches at top-level facilities at major football-playing schools. Those coaches and facilities were largely paid for with money generated by the efforts of football players.

This dynamic plays out with the U.S. national volleyball team, many American track and field stars, and many other athletes in other disciplines. Football money largely pays for college coaches and top facilities, travel and resources. But if more of that cash goes to paying football players, the subsidies for Olympic sports will slow to a trickle. The federal government will have to make a choice about whether to use taxpayer dollars to fund Olympic sports, as many other countries do.

Enormous battles over Title IX will come. Over the last generation, many men’s sports in college have been eliminated or drained of resources, and administrators often blamed Title IX compliance rules. At football-playing schools, the football team accounts for about 80 scholarships. That’s a lot for one sport. Title IX essentially mandates equal treatment and opportunity for female athletes, so many schools have founded and supported sports for women over the last generation to balance out football, while eliminating many men’s sports.

Alston could play out one of two ways with respect to Title IX. If the major football schools opt out of the NCAA system completely, and their new model doesn’t rely on university funds or scholarships at all, they could eliminate many women’s sports because they won’t need to provide an equivalent number of women’s scholarships to match football scholarships. If non-major football schools drop their football programs, they might also drop women’s sports, for the same reason. Other schools may decide instead to deploy any funds that would have been spent on football to create even more opportunity for women.

Sports investors will come up with new opportunities for college athletes. Rapid change already is happening in this space, and it will accelerate. First, entrepreneurs, including me, have tried and will continue to try to develop an alternative, or supplemental league, for college football. Every other sport has such an alternative (like the NBA G League, or minor leagues in baseball, hockey and soccer), but football doesn’t — at least not yet. Players will finally have choices, outside the NCAA system. If these new efforts are successful, it could cause schools to drop other nonrevenue sports, such as volleyball, gymnastics and track and field. If this happens, however, private sports investors will look into creating new opportunities outside the NCAA system for athletes who play those sports, too. In a post-Alston world, the pie will grow larger.

The sports TV streaming wars will accelerate. Disney, NBC, Hulu, Netflix, Amazon, etc., all are engaged in titanic battles for eyeballs, with billions of dollars at stake, as well as dominance of the future of American entertainment. (Amazon CEO Jeff Bezos owns The Washington Post.)

If Alston results in a significant breakup of the NCAA model in any way, the content providers, ever hungry for new content, could become involved in providing the capital for the creation of new sports entities and entertainment. For example, imagine a new Super League of College Football. Such an entity would command an enormous media rights fee, far greater than even the nearly $3 billion dollars the five biggest football conferences made in 2019, most as a result of football TV deals.


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I’ve been watching college football morph into NFL 2.0 with great interest.  The Big 10 just basically incinerated it’s long-time friend and business partner, the PAC 12, by roaching USC and UCLA.  College Football is currently way more ruthless than the NFL.  The NFL operates a sort of economic socialism business model.  College Football programs are in a sort of death spiral capitalism mode.  Grab everything and anything you can, and let the other guy die.  A lot of these smaller Div. 1 schools are going to see their revenue damn near disappear altogether.  If you aren’t in the big 10 or sec, in a few years your weak conference is going to have to negotiate its own tv deal.  Bottom half programs from the PAC 12, the ACC, and the Big 12, are going to be relegated to a sub MAC status.  

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