March Madness: Price Fixing and the NCAA

Article by Cornell Law School Student, Samantha Koppel 

In places all over the country, UConn, Florida, Wisconsin, and Kentucky fans are gearing up to cheer their teams on in the Final Four. UConn defeated three top-4 teams en route. Florida is on a thirty game win streak. Kentucky became the first team to knock out the defending championship team and the last runner up (Louisville and Michigan, respectively).¹ All the while, the NCAA is getting sued. Why you ask? Here's the picture the plaintiffs paint.

People make money writing articles like these²:

The NCAA owns websites like these (which means people make money coding it...need I even mention the ad-space?)³:

Men's College Basketball is so profitable, in fact, that back in 2010, CBS Sports and Turner Broadcasting paid close to $11 billion (to the NCAA) for 14 years of broadcasting rights for 68 teams. ⁴ As a result: We know the players' names. We could wear their mass-produced jerseys. We would recognize them if we saw them in an airport somewhere (and some might even ask to take a picture with them). They are famous. Yet, we call them, "student-athletes" and we call college athletics "amateur sports." Moral of the story: college sports are a major industry... unless you are a player. And at first glance, you might think that this structure is fair. The plaintiffs beg to differ.  

They play on a national platform, and most of them will go pro.

Actually, no. The chances of those players, no matter how good they are, of going pro are 1.2%.⁵ And that's just Men's NCAA Basketball. Men's Soccer? 1.0%.⁵ Women's Basketball? 0.9%.⁵ The lesson here, is, if you want the best chances to go pro, play Men's Baseball (where a lucky 11.6% of NCAA players go pro).⁵

Scholarships!

This is a more complicated issue. But, as it turns out, that the average NCAA player is worth $289,031/year to the NCAA.⁶ So, for most players, their participation results in a huge windfall for the NCAA. Why? Because the average full-athletic scholarship is worth $23,204/year.⁶ So, the average basketball player is losing out on $1,063,307 over the course of his four years in college. And even the student-athletes that are famous cannot capitalize off of how much their own face is worth. There is an NCAA rule that prohibits making money off of your likeness.⁷ If an athlete gets hurt, they do not get access to the kind of healthcare that someone else who makes over $200,000/year would get. The kicker is, unless those students can afford that kind of healthcare (and make a recovery), they will lose out on that $23,000 they get for school, not to mention the measly 2% chance they had at going pro.

So the NCAA is getting sued in a New Jersey federal court.⁸ If successful, the rules limiting the amount of full scholarships would be struck (the complaint calls this "price fixing").⁸ But this is not the only lawsuit. A former West Virginia running back has claimed that the NCAA colludes to cap the the value of athletic scholarships.⁹ There's a class-action law suit along the same lines that is out for blood class-action damages.⁸

What do you all think? Sound off in the comments. 

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1 Chris Chase, For The W!N "11 Amazing Facts About the 2014 Final Four http://ftw.usatoday.com/2014/03/final-four-stats-facts-2014-ncaa-tournament-florida-uconn/"^↩
2 Scott Gleeson, USA Today "Bracket Briefing: 10 Most Important Players in the Final Four http://www.usatoday.com/story/sports/ncaab/2014/04/01/bracket-briefing-10-most-important-players-in-the-final-four/7149227/^↩
3 NCAA Official Final Four Website http://www.ncaa.com/final-four^↩
4 Thomas O'Toole, USA Today "NCAA Reaches 14-Year Deal with CBS/Turner" http://content.usatoday.com/communities/campusrivalry/post/2010/04/ncaa-reaches-14-year-deal-with-cbsturner/1#.UzwoG9yZad8^↩
5 Tony Manfred, Business Insider "Here are the odds Your kid Becomes a Professional Athlete (Hint: They're Small)" http://www.businessinsider.com/odds-college-athletes-become-professionals-2012-2?op=1^↩

6 Huma, R., & Staurowsky, E. J. (2012). The $6 billion heist: Robbing college athletes under the guise of amateurism. A report collaboratively produced by the National College Players Association and Drexel University Sport Management. Available online at http://www.ncpanow.org^↩
7 NCAA "Remaining Eligible" http://www.ncaa.org/student-athletes/current/remaining-eligible^↩
8 Jerry Hinnen, CBS Sports "Labor Attorney Jerry Kessler Files Antitrust Lawsuit vs. NCAA" http://www.cbssports.com/collegefootball/eye-on-college-football/24488838/labor-attorney-jeffrey-kessler-files-antitrust-lawsuit-vs-ncaa^↩
9 Mike Singer, CBS Sports "Lawsuit Asserts NCAA 'Colludes' to cap Value of Athletic Scholarships" http://www.cbssports.com/collegefootball/eye-on-college-football/24469742/lawsuit-asserts-ncaa-colludes-to-cap-value-of-athletic-scholarships^↩