Bilas: Welcome to the NCAA’s overdue summer of reckoning, and what happens next

NCAAF

If the NCAA office in Indianapolis were to put out one of those “How It Started; How It’s Going” posts on Instagram, it would be pretty revealing of where we are. My sense is, taking things to the extreme to make a point, the left side of the post would look like the Titanic leaving the harbor with Mark Emmert at the helm, while the right side would be the ship just as it hit the iceberg, while Emmert signed a contract extension for the next voyage. The only difference between the NCAA and the Titanic in this analogy is that the NCAA knew the iceberg was there, but stayed on course to hit it because the iceberg was in front of the bank holding the NCAA’s billions in revenue. Mission accomplished.

This summer has seen the NCAA’s influence and role lessened, and real questions are being asked about the NCAA’s very existence and viability going forward. There are many reasons for the NCAA’s current, wounded posture. There’s over a decade of incompetent leadership, effective legal challenges to NCAA policies, the NCAA’s miscalculation of those legal challenges, legislative efforts by different states across the country to force change to NCAA policy, an intentionally slow moving bureaucracy and the NCAA’s hubris and stupidity. Yet, while all of that was happening, the money continued to roll in for the NCAA membership, which was the main reason the above intolerable factors were tolerated.

Yet, for all of the handwringing over its continued existence, the NCAA is not going anywhere. It will still exist and play an important role. However, it’s clear the NCAA’s role in college sports will be diminished. Think of it this way: The Amateur Athletic Union (AAU) was once the most powerful athletic organization on the planet. Now, it runs sports programs and athletic events. It is still here, but it is no longer the dominant, “my way or the highway” organization. That is where the NCAA seems headed and, some might argue, it is headed there due to its intentional and purposeful decisions over the past four decades.

How the NCAA Got Here

People think this is the time of the greatest change in NCAA history. It is not. 1984 was the time of the greatest change, and the change that occurred after 1984 was monumental, dwarfing the current climate.

The NCAA is an athletic association with more than 1,000 member schools in more than 100 different conferences. The overwhelming majority of NCAA members have little in common, except the agreement to band together to make policies, rules and regulations to govern the industry of college sports.

And the NCAA is a serial violator of federal antitrust law.

In 1984, the NCAA was before the Supreme Court of the United States (SCOTUS) being challenged for its policies governing college sports. Yet, it wasn’t athletes challenging the NCAA, it was the members themselves. In one of the NCAA’s “traditions,” the NCAA decreed exactly how many times schools could appear on television. The NCAA believed television exposure could oversaturate the market and lead to loss of gate receipts from the viewing public deciding not to attend games but to watch them at home on television. The schools didn’t like being told when and how often they could appear on television because it impacted their ability to make money and recruit talent, so they sued the NCAA for violating federal antitrust law.

And the schools won. The NCAA v. Board of Regents of the University of Oklahoma held that the NCAA’s rules limiting television appearances were a violation of the Sherman and Clayton Antitrust Acts, which prohibit monopolies and cartels from restraining open trade. And, as a result, the conferences could then negotiate their own media rights deals. That was a colossal change that led to the generation of billions of dollars by conferences and schools. That change led to astronomical salaries, palatial facilities, private travel and the exponential growth of the college sports industry into a multibillion-dollar business.

In time, NCAA conferences became media rights consortia, and the money rolled in. Schools started making hundreds of millions of dollars, and coaches started making millions of dollars. Yet, nobody really complained about that change as the demise of college sports, or that traditions would be compromised, or college sports would cease to exist. It was just business.

In the Board of Regents decision by SCOTUS, there were some offhand comments from the Court known as “dicta” that were later interpreted by most lower courts to give deference to the NCAA’s rules on amateurism to the point of being an antitrust exemption. The “dicta” had no real bearing on the decision in the Board of Regents case but protected the NCAA from successful legal challenge for decades, until the Alston case reached SCOTUS.

Here is where the NCAA’s incompetent leadership, hubris and stupidity converged to bring the association to its knees. After the NCAA’s rules governing exactly what could be provided to athletes, a federal court in the Ninth Circuit held that the NCAA could not limit what schools could give to athletes, related to academics. So, if the ruling were to stand, the NCAA could no longer prohibit a school from providing a laptop, a semester abroad or a paid internship to an athlete. The ruling was limited in scope and was, overall, very good for the NCAA because it preserved the NCAA’s ability to keep schools and others from allowing compensation beyond academics to athletes.

But very good just wasn’t good enough for the NCAA, so it petitioned SCOTUS for review, which was granted. In the ultimate “be careful what you wish for,” the NCAA went before SCOTUS and got its ass kicked, 9-0. In addition to a shutout, SCOTUS eviscerated the NCAA’s protection from the dicta in the Board of Regents case and basically declared open season on NCAA policies limiting athlete compensation. So, from now on, the NCAA will not get deference from the courts and will likely lose future legal challenges to NCAA policies that limit athlete compensation in any way. All because the NCAA would not stand for anyone telling it what it could and could not do.

While the NCAA was mismanaging its legal position and getting beaten in court, it was also mismanaging the legislative process and watching its policies be challenged by different state legislatures across the country. It started with California and Senator Nancy Skinner, who believed the NCAA’s restrictive policies on athlete compensation to be a civil rights issue. Instead of working with Senator Skinner and re-working its policies on Name, Image and Likeness (NIL), the NCAA basically threatened her with retribution against California athletes should legislation be passed that conflicted with NCAA policies. That was not a good idea, as Senator Skinner is not only very smart, she is formidable. California passed a law allowing its athletes to profit from NIL. To show what competition in the marketplace really looks like, several other states followed suit and passed their own NIL legislation. Rather than passing its own NIL legislation, which would likely have obviated the need for states to step into that void, the NCAA passively stood by and watched the states do the NCAA’s job and pass legislation governing athlete compensation.

Due to the crushing loss before SCOTUS in Alston and the litany of state laws allowing what the NCAA has always fought tooth and nail to disallow, athletes can now make money off of endorsements with the NCAA powerless to stop it. The NCAA is so powerless it has completely stepped away from that area of regulation, telling the schools and conferences to abide by state law or make up their own NIL policies.

Meanwhile, longtime administrators and coaches are decrying the monumental change and wondering whether they wish to remain in the college sports business any longer. Yet, those longtime administrators and coaches didn’t bristle over the change on the revenue generation side. They don’t seem to care as much about multibillion-dollar media rights deals, apparel deals and unchecked facilities spending. It doesn’t move them to threaten quitting over conference realignment. The real problem to them is only the change that empowers athletes. The transfer portal and player compensation are just too much, and some are threatening to retire.

I get it, and I understand that position. I just differ with it. If coaches and administrators are moved to leave the industry because the recent change bothers them so much, they should go. The industry will miss them, but not for very long. The industry will move on, and quickly.

As for the NCAA, it bizarrely declared victory after the 9-0 loss in SCOTUS because the Court did not specifically rule that it could not restrict athlete compensation completely. But, it is clear that the NCAA’s policies restricting athletes are illegal, and it is just a matter of time before they are struck down in court. The NCAA is moving to deregulate and decentralize, giving conferences authority over certain policies because it knows that NCAA policies violate federal antitrust law. Now, the only hope the NCAA has that it can continue to restrict athletes is if Congress provides the NCAA with an antitrust exemption.

Where College Sports is Going

First, let’s admit what college sports is and is not. College sports are a multibillion-dollar entertainment industry. The most profitable conferences are media rights consortia that are each the equivalent of the NFL and NBA in revenue generation, profitability and in the way they are run. While the industry claims that college sports isn’t about money, it absolutely is about money. Going forward, conferences like the SEC and Big Ten will be the dominant forces, not the NCAA. And those conferences will do what is in their best interests to be dominant players in the marketplace in this cutthroat business. That is called competition.

College sports are not the minor leagues for the pros. Minor leagues do not have multibillion-dollar media rights deals and pay coaches and administrators millions. College sports are major league in every way.

The fan and fan interest is being catered to in college sports, and all decisions are made because of fan interest and behavior. Oklahoma and Texas are not leaving the Big 12 for the SEC because they don’t understand the college sports fan, but rather, because they do understand the college sports fan. Fans did not leave in protest over ballooning coaches salaries, more games than ever on television, or the building of Taj Mahal facilities, and those in charge know that. They know who college sports fans are and what they will spend and give, to the penny. All of these decisions have been made purposefully and intentionally.

College sports have traditions, but it is not about tradition, and it is not reliant upon tradition. The tradition thing is trotted out mostly by old men that have been in charge for too long, and cannot wrap their heads around where they have steered this ship. Nobody complained so loudly over colossal revenue generation. It is only when the athlete benefits that we worry about tradition.

The NCAA is no longer the vehicle that will run college sports. The NCAA will take a step back from rules and regulations that govern college sports across the board and cede authority to conferences to make their own rules. That is by necessity. The NCAA has been ruled to wield monopoly power by SCOTUS, and any NCAA rules that restrict trade are subject to legal challenge. SCOTUS made clear that conferences, as long as they don’t collude, may make their own rules governing the treatment and compensation of athletes. That is why we see the NCAA announcing a November Constitutional Convention, to decentralize power and deregulate, so that such decision can be made by conferences. The NCAA will simply run championships and determine initial eligibility.

The only hope the NCAA has to keep its monopoly power over athletes is Congress. Unless Congress provides the NCAA safe harbor to continue to violate federal antitrust law, it will be up to each conference in the future to determine what athletes will be allowed. In the coming months and years, Congress may decide college sports is running just fine without Congressional intervention. The NCAA has cried wolf for a long time. When all of the games are played, the money is collected and the world remains firmly on its axis with NIL allowed, there is less incentive for Congress to get involved. But who knows?

Absent Congressional intervention, the major conferences will continue to compete with each other for money, markets and power. Right now, the SEC is the dominant player and will be into the future. We have not seen the last of conference realignment, and we can expect that the bigger, more powerful conferences will separate from the rest to consolidate power. We have already seen it in football, and it is coming in basketball. As we have seen with media rights deals and conference networks in the past, content is king. We will see more college sports, not less. It will be more valuable, not less.

Lastly, athletes will make money and everything will be just fine. We will all get used to it, just as we got used to Olympic athletes making money. No fan ever left in protest over facilities spending, private travel or exploding coaches’ salaries. They won’t leave in protest over athletes being paid. The NCAA’s own incompetence and hubris has made a mess of its influence and governing power over college sports and is the sole reason its power is diminished. But, the NCAA cannot screw up or diminish the earning power of college sports in the marketplace. Thankfully, the business of college sports is idiot-proof.

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