Free Markets
Free markets are the most potent and efficient external regulatory force facing the NCAA and Power 5.
The largely unregulated NIL (and transfer) market has ripped through NCAA and Power 5 fearmongering and false narratives.
The evolving NIL market is dynamic, innovative, competitive, unpredictable, and disorganized.
This is precisely what economics experts would expect in any market that has been artificially suppressed for decades and then comes to life through a single event, which is what happened when the NCAA reluctantly (and conditionally) unshackled NIL on July 1st, 2021, through the “Interim Policy.”
This new feature of the business model has not resulted in:
The fatal collapse of college sports.
The wholesale elimination of women’s and other “Olympic” sports (or scholarships).
Reduced consumer demand for any college sports products.
On the contrary, the NIL (and transfer) markets are evolving alongside an unprecedented boom market for all of college sports.
Even in the face of uncertainty in the structure of big-time football through cut-throat conference realignment caused by the wealthiest conferences themselves, money is falling from the sky, and consumer demand is exploding, not evaporating.
Big-time football conference broadcast media deals have broken the billion-dollar-a-year barrier and an expanded CPF has re-upped its broadcast media deal for over a billion dollars a year (the Power 5 receive 80% of that revenue).
Women’s sports are on the precipice of a historic breakthrough in popularity and market value that is occurring despite the NCAA, not because of it.
In October 2023, Iowa set an all-time women’s basketball attendance record with over 55,000 fans at Iowa’s home opener.
In December 2023, a Nebraska volleyball game set a world record for attendance at a women’s sporting event with over 92,000 fans.
In 2022 and 2023, softball drew record crowds at the Women’s College World Series in Oklahoma City.
Top schools in each sport are selling out home games and bringing in record crowds at away games.
New fan engagement technologies are rapidly entering the college sports space, and the NCAA and Power 4 conferences are positioned to enter the sports gambling space through data collection deals that could be valued in the hundreds of millions of dollars.
The speed with which free markets in college sports are reshaping the business model—for institutional stakeholders and athletes alike—explains much of the regulatory confusion and handwringing among those who are supposed to be in charge.
The NCAA and Power 5 never envisioned a scenario in which they did not have absolute control over college sports markets, including NIL and transfer.
So far, the NCAA and Power 5’s “adaptation” to the NIL and transfer markets is to attempt to stop them in their tracks.
The NCAA and Power 5’s Philosophy of “No!”
In the last year, seven NCAA and Power 5-friendly bills or discussion drafts have been introduced in Congress that would substantially limit the new NIL (and transfer) market.
All of them are built around NIL regulations that would limit athletes’ NIL rights and attempt to restore the regulatory and business models that existed before the summer of 2021.
Sponsors of these regressive bills include Senators Lindsey Graham (R-SC), Tommy Tuberville (R-AL), Roger Wicker (R-MS), Joe Manchin (D-WV), Ted Cruz (R-TX), and Representatives Gus Bilirakis (R-FL), Mike Carey (R-OH) and Greg Landsman (R-OH).
Several of these bills would create a federal entity to act as the policymaking and enforcement arm. Those federal entities would be governed by boards with a majority of NCAA/Power 5 insiders, effectively replicating the NCAA/Power 5 regulatory and governance models with the authorities of federal government agencies.
In the four-year-long congressional debate primarily framed around NIL, NCAA/Power 5 witnesses and allied lawmakers have been reluctant to talk in terms of free markets for NIL or anything else.
When they do, there is a predictable pattern.
They claim to support free markets (how could they not?) and “NIL compensation,” but there is always a caveat, an asterisk that negates their claims of support.
“We support NIL compensation for athletes but only within principles that protect the ‘integrity’ of college sports and are ‘tethered to education.’”
“We support NIL compensation, but only within guardrails that preserve the NCAA’s ‘core values, mission, and principles.’”
“We support free markets, but only when accompanied by ‘sensible government regulation’ that protects athletes from ‘bad actors’ and fraudulent NIL deals.”
Through twelve congressional hearings over the last four years and sixty-two witness slots, a handful of witnesses have advocated for free market principles, including:
Ramogi Huma (Executive Director, National College Players Association; multiple hearings)
Dionne Koller (professor, University of Baltimore School of Law; July 1, 2020, hearing in the Senate Commerce Committee)
George Wrighster (former member of the NFL Players Association; July 22, 2020, hearing in the Senate Judiciary Committee)
Rod Gilmore (ESPN football analyst and attorney; June 9, 2021, hearing in the Senate Commerce Committee)
Jason Stahl (Executive Director, College Football Players Association; March 29, 2023, hearing in House Energy and Commerce’s Subcommittee on Innovation, Data, and Commerce)
Chase Griffin (current UCLA football player; January 18, 2024, House Energy and Commerce’s Subcommittee on Innovation, Data, and Commerce).
Some of these witnesses framed their free market advocacy around broader American freedoms and the injustice of denying them to athletes.
The twelve congressional hearings combined have lasted approximately thirty-one hours or 1,860 minutes.
The video montage below is four minutes long and captures a substantial portion of the discussions on free markets.
Perhaps the most telling quote from the montage is the exchange between Senator Roger Wicker (R-MS) and Rod Gilmore, ESPN football analyst and attorney, at the June 9th, 2021, hearing in the Senate Commerce Committee.
This was a crucial hearing for the NCAA and Power 5 in their last-ditch attempt at a preemption bill that would prevent state NIL laws from going into effect on July 1, 2021.
Six witnesses testified, five supporting emergency federal nullification of state NIL laws. Mr. Gilmore was the lone witness opposing federal intervention.
Mr. Gilmore’s opposition to federal preemption ran through the lens of free market solutions over heavy-handed government regulation.
Wicker prefaced his question to Gilmore by observing that Gilmore was “outnumbered five to one” on the panel.
In mock fairness to Gilmore, Wicker wanted to allow Gilmore to “explain” his opposition to preemption.
Wicker’s framing of his question portrayed Gilmore as out of the mainstream, an outlier in the preemption debate.
While Wicker’s strategy was an effective rhetorical device, he also implies that free market principles are out of the mainstream in discussions over athlete compensation, which is quite ironic for a politician who built his political career on free markets and states’ rights.
Free market advocates like Gilmore have been marginalized and put on the defensive to justify their support for basic American values.
The June 9th hearing was representative of other stacked witness panels throughout the congressional debate that created the illusion of “consensus” on NCAA/Power 5 narratives and legislative goals.
As illustrated by the witness chart below, in eight hearings, only a single athlete-friendly witness testified (hearings and witnesses circled in red).
Moreover, in four of the eight single-witness hearings, the same athlete witness (Ramogi Huma) testified.
This witness profile is not the result of chance. It is a testament to the influence and persistence of NCAA and Power 5 lobbyists, lawyers, public relations experts, and lawmakers who have pushed NCAA and Power 5 narratives.
Flipping The Script and Speaking the Language of Freedom
For decades, the starting point in any discussion of athletes’ rights has been the protection of institutional interests. Only after all institutional interests have been fully protected can there be any discussion about athlete interests.
The problem with this way of thinking is that institutional interests run through values and principles—“amateurism,” the “student-athlete,” and the “collegiate model—that make it impossible to align athlete interests with basic American freedoms.
After applying these mythology-based concepts, what is left for athletes is whatever the institutions choose to give them.
Why not flip that script and err on the side of protecting athletes’ fundamental rights as Americans first, then considering and addressing institutional interests, for the first time since the 1950s?
To do that, we must change the language and make free markets and economic liberty the nonnegotiable rule, not the outlier exception.
