Jake Goidell argues that the ongoing NCAA lawsuit settlements will not create a lasting solution unless athletes form a players association that is involved in determining industry-wide decisions.
In 1950, the United Auto Workers signed a five-year contract with General Motors in which the union relinquishedits ability to strike and conceded any sort of systematic control over the company. Dubbed the Treaty of Detroit, Daniel Bell wrote in Fortune that, “GM may have paid a billion for peace,” but “it got a bargain.”
Today’s autoworkers are college athletes whose industry is now at a similar crossroads. The players can accept a lawsuit settlement that makes them a lot of money but gives them no control over the industry; or, they can fight for real power over key decisions in college sports, from contracts and health benefits to schedules and conference re-alignments.
In late May, the National Collegiate Athletics Association (NCAA) and the five largest conferences in college sports agreed on a settlement of three antitrust cases—House v. NCAA, Hubbard v. NCAA, and Carter v. NCAA—with a group of former and current athletes. In House, the most important of the three cases, the plaintiffs argued that the NCAA’s rules which banned players from profiting off their name, image, and likeness (NIL)were a collusive effort to avoid paying players and a violation of antitrust law. Among other constraints, these rules prohibited conferences from sharing television broadcast revenue with players. If the lawsuits had gone to judgment and the plaintiffs prevailed, former athletes would be owed restitution and current athletes would have received a significant share of the billions of dollars of television revenue that college sports generates annually.
Indeed, facing a likely defeat in court and the mandatory treble damages of antitrust law, the NCAA and the major conferences decided to settle. The NCAA and the conferences agreed to pay $2.8 billion in back-pay damages to current and former athletes and create a system of revenue-sharing with athletes, with most of the money going to football players and men’s and women’s basketball players. The agreement, whichwould last ten years, is the most consequential financial agreement in the history of college sports, and the final nail in the coffin of college sports amateurism.
The House settlement seems poisedto be the foundation for a new system of college sports. However, a one-off agreement with a group of former players will not be a stable, long-term solution. Legal challenges from current and future athletes who opt-out of the agreement will continue unless the players are genuinely involved in NCAA decisions on an ongoing basis. The only enduring solution for both the players and the NCAA requires a permanent players organization.
Rules of the game—merely a metaphor in other industries— can only be created in sports leaguesthrough an explicit agreement between competitors. The Ninth Circuit and Supreme Court have both made clear that the assent of the players is required for the NCAA to reobtain the power to set industry-wide rules that it lost in the 2021 case Alston v. NCAA, which opened the door to subsequent lawsuits regarding student athlete compensation. Justice Brett Kavanaugh, in his 2021 concurring opinion, declared that the only way to deescalate the conflict—to lower the temperature from the intensity of antitrust litigation—was for the NCAA and the schools to engage in some form of collective bargaining with athletes. Brown v. NFL and Wood v. NBA both provide examples of how bargaining seriously with labor affords leagues more ability to set internal standards. Through a decade of court cases, the NCAA has been forced into a similar position as these other leagues.
The Supreme Court’s unanimous decision in Alston v. NCAA found that colleges ran a collusive price-fixing scheme to depress the educational benefits (the scholarships, room and board, etc.) players could receive.The relatively narrow decisiononly impacted the NCAA’s rules about educational benefits, not the rules prohibiting direct payment to players. Still, the decision permitted athletes to profit off of their name, image, and likeness (NIL), a decision that has transformed college sports. Boosters now openly pay athletes and recruit them to schools, and athletes appear in advertisements and make sponsored posts on their social media accounts. Players have become far more powerful and far better paid, but only through individual player-by-player gains. Their victories are ephemeral and can disappear entirely with a bad season.
The NCAA itself, meanwhile, has become a beleaguered regime that lacks any ability to regulate college sports. There are virtually no rules regarding NIL deals, booster payments, or recruitment. In recent weeks, after losing yet another lawsuit, the NCAA entirely paused enforcement of their remaining NIL regulations.
The loss of the NCAA as the dominant regulatory force in college sports has left a power vacuum that has been filled by a combination of old players, new groups, and vestiges of the old regime. Conferences, schools, boosters, and NIL brands all jockey for power in messy and often public fights. The era is chaotic and exhausting for everyone involved, but it is impossible to return to the amateur era. Everyone in college sports knows that something new is needed to stabilize the industry.
With this reality, the settlement of House appears to present a welcome solution for the NCAA and its constituent schools. The settlement seems to placate every interested party without forfeiting any power to players in determining the rules and regulations of college sports. The settlement is negotiated with the lawyers who have brought every important lawsuit against the NCAA, will be approved by the district court judge who has heard every case, and handsomely pays a certain subset of players. The NCAA is convinced that money is the main issue at stake: that by paying athletes, the antitrust and labor issues plaguing college sports will become less important. Through the settlement, the NCAA hopes to regain regulatory powers without conceding control over industry-wide decisions. Players would still have no say over new NIL rules, changes to the transfer portal, increased travel requirements, and other nearly all other NCAA regulations.
Most importantly for the NCAA, the House settlement ostensibly shields it from the antitrust suits that brought down the amateur system and prevented it from creating any regulations during the NIL era. The settlement prevents any individual player from suing for antitrust harms, which has been the case in every ongoing private lawsuit against the NCAA. Instead, the players may only sue for antitrust harms as a class. Future players would be absorbed into this class unless they opted out, a decision that could potentially cost them their roster spot. Without the creation of a players association, the settlement is merely creating and centralizing a legal class, stripping athletes of their individual rights without building up collective power.
The lack of a players association is also a boon for poorly run athletic departments. Athletic departments are textbook examples of bloated and inefficient monopolies, and their reliance on athletes’ unpaid labor have made them sloppy negotiators. The exorbitant contracts freely handed to coaches and the bureaucratic bloat of athletic departments would be unacceptable in any other sport or in any other industry. These organizations would be ill prepared to negotiate with a strong players union.
However, a closer examination of the settlement shows that it will not create a stable solution for the post-amateur era of college sports. First, for college athletes, the proposed revenue-share in the House settlement is far less lucrative than a potential collective bargaining agreement could be. The salary cap would be 22% of the average Power 5 conference school’s revenue from athletics. Though the number will rise during the ten-year agreement (double the length of MLB’s collective bargaining agreement), it will remain paltry compared to the 50% of total revenue received by NBA players or 48% received by NFL players.
Furthermore, the settlement will likely not shield the NCAA and the conferences from the same type of antitrust lawsuit that brought down the amateur system and prevented the NCAA from creating any regulations during the NIL era.
This is because the settlement does not engage with labor in any comparable way to players associations in professional leagues. Athletes will have no say over general NCAA rules, such as those about eligibility and long-term health care, or sport-specific regulations, like those regarding schedules and the postseason. The players, or an association representing them, were not actively involved in negotiating the House settlement, bargaining was limited only to wages, and there will be no permanent group representing the players’ interests to settle future disagreements and grievances. As a result, this settlement likely does not meet the standard of Brown and Wood, since the NCAA can still unilaterally impose terms onto players.
The settlement also does not protect the NCAA against lawsuits for misclassifying athletes as “student-athletes” rather than employees of the school. If athletes win those lawsuits, they will be eligible for employee benefits, including anti-discrimination protections and the right to organize. In fact, the settlement bolsters arguments that athletes are employees of their universities, since they would now receive a salary directly from their school, who would pay the athletes but not adopt the other responsibilities demanded of an employer.
Even before the settlement, a National Labor Relations Board memo stated that college athletes at private schools are employees and have a right to unionize. A pending NLRB case argues that conferences and schools are the athlete’s joint employers, a solution that would allow athletes at public schools to unionize as well. With only the House settlement and no players associations, labor lawsuits and a slow progression of union elections could continue, fracturing any national consensus the NCAA hopes to set. A unionized Big Ten but a non-union SEC would be a legal and logistical nightmare, dwarfing even the confusion of the NIL era. With labor law, just as with antitrust law, only a permanent and powerful collective organization of players can quell the legal challenges facing the NCAA.
Several groups have already been making efforts to organize college athletes. Athletes.org, the largest current players organization, boasts a membership of over 2,000 D1 athletes, including the entire rosters of various D1 football and basketball teams. The College Football Players Association urged players to opt-out of the unnegotiated $600 payment for video game developer EA Sports’ College Football 25 video game. And the Dartmouth men’s basketball team has already successfully won a traditional NLRB union election as members of SEIU Local 560.
It is unclear what form a players association would take and who would be a part of it. Some of the organizations listed above are limited to a specific sport, conference, or even a specific team. Athletes.org welcomes all D1, D2, and D3 college athletes as members regardless of their sport; however, only a smaller subset would bargain over wages.
It is also unclear how a players association would operate when a minimum of 25% of its membership leaves every year and the maximum tenure for a member is five years. However, unions exist in other industries with rapid turnover: coffee shop employees, graduate students at the same universities as college athletes, and professional athletes in players associations whose average career length is less than five years. Fraternities and sororities, while not unions, also offer another example of college institutions that thrive despite the turnover of their members.
Furthermore, college sports teams already have built-in mechanisms for maintaining team culture amid rapid turnover with procedures to introduce newer athletes to the team values and clear patterns of succession. This model could be adapted to the national, union level just as it is for professional players associations. Any college sports players association would also likely be staffed by former rank-and-file leaders, maintaining continuity and securing institutional knowledge.
While the specifics are still up in the air, it remains clear that it is only through collective action that players can gain any real power over college sports. Athletes provide the value for their schools, and they ought to be involved in making decisions that impact their sports: decisions about salaries, healthcare, transfer regulations, and the millions of other details that constitute the system of college sports.
It is also clear that it is only through engaging with a players association that the NCAA and conferences can reestablish stability in the post-amateur era of college sports.In its widest vision, antitrust law regulates what market structures are permissible, giving favorability to combinations that incorporate labor into decision-making processes. In the case of the NCAA, the antitrust harms are against labor, and industry-wide agreements necessary to set league-wide rules will only be permitted if athletes are given a role in determining the structure of college sports. The amateur era and its absolute control over players was both legally and morally unacceptable, but the NIL’s unregulated, perfectly competitive market has only led to chaos. Only a centralized and regulated market with a strong, permanent role for a players association can stabilize the system. The NCAA’s misguided hope that a lawsuit settlement can permanently solve the industry’s problems will only prolong the chaos and uncertainty in college sports.
Conferences, schools, television broadcasters, advertisers, and the NCAA all make enormous sums of money off of college athletes.To continue making money, these groups must make industry-wide agreements, and these agreements are only valid if all groups, including labor, sign off on them. The NCAA and conferences’ resignation to the terms of the House case should make clear just how much leverage athletes have in their negotiations. As with GM and the UAW, the NCAA is paying for peace. It is now up to the players to ensure the NCAA does not get a bargain.
Author Disclosure: Jake Goidell was previously employed at the Professional Tennis Players Association (PTPA) as a researcher. The PTPA has made no comment on the topic of NCAA player organizing, and the author has no current connection with the organization.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
