Court: NCAA Must Allow Some Types of Compensation

In related news to the recent approval of more autonomy for the major conferences, a federal judge also announced this past week that the NCAA cannot restrict colleges from offering certain types of compensation, such as a trust holding some percentage of licensing revenue (though it can cap the amount).

This will further erode the competitiveness of Division I since there are vast disparities in resources and popularity between different schools. It is good that the NCAA can impose a cap, since allowing compensation for things like licensing would heavily favor schools in larger states/markets or states with fewer schools. Unlike professional sports, there rules governing which schools get in which division are not that strict. Some major markets (i.e. New York/Boston) have only one or two teams while some small markets (e.g. Raleigh-Durham) can have a number of teams which might dilute the financial resources of any individual school.

This seems like a natural consequence of running athletics like a for-profit business. As I stated before, I would like to see the money taken out of college athletics and for athletics to take a less prominent place in college life. So, I fall into the “reform” camp rather than the “market” camp of Andy Schwarz’s terminology. However, I do think that it’s wrong for colleges to be licensing actual players names and likenesses. This is especially problematic when athletes are specifically outlawed from making any money from their own name. There have been a few cases where athletes with other interests, such as music, could risk their eligibility by performing. Under the current rules, everyone except the players can make money off the players’ names.

Obviously, I’m not a lawyer so I can’t comment on the actual legal effects of the ruling. However, it seems to me like this decision could be either good or bad for the NCAA depending on how the schools respond. It might finally force schools to make a choice between profit and the student-athlete ideal. While I think many schools (the SEC) will choose profit, others (perennial losers as well as top schools like Stanford, Northwestern, Duke, Rice, Notre Dame, etc) may start to de-emphasize athletics since switching to an outwardly for-profit athletics model may be highly unpopular with students and alumni. It will be difficult for many schools to justify paying more money to athletes when athletics are heavily funded by tuition and fees even at many fairly successful schools. Students won’t want to see tuition rise year after year so that some football players can be coddled even more than they already are.