The most intriguing contest in college sports is not taking place in any football stadium, basketball arena or any athletics venue.
It is playing out in the United States District Court for the 9th Circuit.
That is where the case of Jenkins v. NCAA is on appeal. The case began in a federal court in California in 2014. Former NCAA student-athletes sued the NCAA for limiting their athletic scholarships, claiming that it was illegal to exclude certain college-related costs from athletic scholarships.
The trial judge ruled that the NCAA had violated federal antitrust law (The Sherman Act). The court said that the NCAA could no longer dictate the terms of athletic scholarships and that only the conferences could do so. The decision was a direct assault on the NCAA’s authority over its member institutions, 347 of which are larger schools in Division 1. So the NCAA filed an appeal that should be decided in the next few months.
If the 9th Circuit upholds the lower court decision, it would be a major erosion of the the NCAA’s authority.
In a second challenge to the NCAA’s authority, California passed the so-called “Fair Pay To Play” law that will allow student-athletes to profit from product endorsements when it takes effect in 2023. Florida and several other states are expected to pass similar laws.
The NCAA is scrambling to devise rules that will preserve some semblance of amateurism while respecting the right of student-athletes to profit from the use of their names, images and likenesses.
What’s behind all of this?
In part, it is a reaction to the enormous growth in revenue from television, apparel sales and other sources. The NCAA is collecting nearly $20 billion over 22 years from CBS and Turner for TV rights to March Madness alone.
Universities are sharing their revenue with coaches, but not players. Even average coaches such as Mike Leach are being paid excessive salaries. Leach amassed a so-so 52-46 record as football coach at Washington State for eight years and was rewarded last month with an extension until 2024 at $4 million a year. And that does not include lucrative side deals with apparel companies and others.
Leach was so grateful that he breached his contract less than five weeks later by signing to coach Mississippi State at $5 million annually. So the fair market value for a head coach who will never be confused with Nick Saban or Urban Meyer appreciated 20% in just one month. This is what can happen in a market that is awash in money.
Another reason for the push against the NCAA is its failure to keep up with the times. As more and more cash flowed in, it took no steps to address the financial concerns of student-athletes unless a court ordered it to do so.
As with most businesses that are not responsive to changes in the market, the NCAA’s day of reckoning seems to have arrived.