Twice a year in Vienna, the members of the Organization of Petroleum Exporting Countries gather to decide on the short-term direction of oil prices. Sometimes, O.P.E.C. agrees to cut back on oil production, pushing up the price of oil. Other times, it decides to boost production. Always, the goal is to fix the price of oil, rather than allow it to be set by the competitive marketplace. Indeed, collusion and price-fixing are the main reasons cartels exist — and why they are illegal in America.
Joe Nocera
Yet, in Indianapolis a few weeks from now, a home-grown cartel will hold its annual meeting, where it, too, will be working to collude and fix prices. This cartel is the National Collegiate Athletic Association. The N.C.A.A. would have you believe that it is the great protector of amateur athletics, preventing college athletes from being tainted by the river of money pouring over college sports.
In fact, the N.C.A.A.’s real role is to oversee the collusion of university athletic departments, whose goal is to maximize revenue and suppress the wages of its captive labor force, a k a the players. Rarely, however, will the cartel nature of the N.C.A.A. be so nakedly on display as at this year’s convention.
In The Times Magazine this weekend, I lay out a proposal to pay the players in the two big revenue sports, college football and men’s basketball, something the N.C.A.A. won’t countenance. In the course of my reporting, I gained a new appreciation for the cartel characteristics of sports leagues.
Sports leagues can’t exist without at least some collusion. As Andy Schwarz, an economist and litigation consultant, puts it, “If steel companies got together to decide when and where to produce steel, that would violate the antitrust laws. But if sports teams in a league get together to decide when and where to play games, that’s generally allowed.” Major League Baseball has long had an antitrust exemption; other professional leagues have salary caps, which are legal because they have been agreed to by the players.
The N.C.A.A. has neither an antitrust exemption nor a player’s union to negotiate with. In other words, it lacks some of the legal protections that shield professional sports from antitrust suits. What it has, instead, is a work force full of young adults dreaming of becoming pros and willing to sign any document, no matter how onerous, if it will help them reach that goal. The document the N.C.A.A. forces them to sign completely stacks the deck against them. To cite just one outrageous example, if a player runs afoul of an N.C.A.A. rule, he isn’t allowed legal counsel to defend himself.
Recently, Mark Emmert, the president of the N.C.A.A., tried to make the rules a tad less onerous. He got the N.C.A.A. board of directors to approve an optional $2,000 stipend as well as a four-year scholarship instead of the current one-year deal for players.
And how did the cartel react to these modest changes? It rose up in revolt. Enough universities signed an override petition to temporarily ice the new stipend. The same thing happened with the four-year scholarship.
A lawyer in Fort Worth, Christian Dennie, who specializes in sports law, got ahold of an internal N.C.A.A. document outlining some of the objections. One is especially worth repeating: “The new coach may have a completely different style of offense/defense that the student athlete no longer fits into,” wrote Indiana State. Four-year scholarships might mean that the school would be stuck with “someone that is of no ‘athletic’ usefulness to the program.” Thus does at least one school show how it truly views its “student athletes.” (Andy Staples at Sports Illustrated first reported on this document.)
At the N.C.A.A. convention in mid-January, both of these rules will be reviewed. In all likelihood, the N.C.A.A. will roll them back. However benignly it characterizes this action, it will be as clear-cut an example of collusion as anything that goes on at an OPEC meeting.
How can it be that the N.C.A.A. can define amateurism in one moment as allowing a $2,000 stipend and in the next moment as forbidding such a stipend? How can it justify rolling back a change that would truly help student athletes, such as the four-year scholarship, simply because coaches want to continue to have life-or-death power over their charges? How can the labor force that generates so much money for everyone else be kept in shackles by the N.C.A.A.?
The N.C.A.A. claims it has the legal right to do all the above and more. And maybe it does. But it certainly would be worthwhile to see someone challenge its cartel behavior in court. The inevitable rollback of the $2,000 stipend and the four-year scholarship would be an awfully good place to start.
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