By: Jansen Carver
The last few years have seen many changes and dramatic moments in college football from name, image and likeness (“NIL”), conference realignment, and even a sign-stealing scandal. NIL has become a major part of the college football world, and with NIL has come antitrust law.
In the past five years, the NCAA has undergone many antitrust challenges related to student-athlete compensation. In 2019, the Supreme Court heard NCAA v. Alston, an antitrust case relating to the restriction of benefits to student-athletes and whether the NCAA’s restriction of benefits to student-athletes rose to the level of a violation of §1 of the Sherman Antitrust Act.[1] The Court found that the NCAA’s restriction rose to a violation and enjoined the NCAA from restricting education-related benefits paid to student-athletes from third-parties.[2] This has led to an explosion of payments to student-athletes in return for NIL rights.[3] The ramifications of this decision on the landscape of college football have been unprecedented.[4] This has especially been true in the fortunes and misfortunes of many of the Power 5 conferences. This transformation has not exclusively been related to NIL, much of it has to do with television deals and profits for the member schools, but the result has been to potentially expose the winners of this reshuffle to the same restrictions imposed on the NCAA in Alston.[5]
The major issue for the NCAA is that it has market power. Market power is “the ability to raise prices above those that would be charged in a competitive market.”[6] The NCAA controls college football completely. This is why they were able to choose not to allow payments to players for so many years, there was nowhere else to go. In Alston, while the types of payments covered by NIL were not specifically enjoined, Justice Kavanaugh made clear in his concurrence they likely would be if the issue were in front of the Court.[7]
The Power 5 conferences, however, do not have this problem. The Court made clear they were free to impose their own rules as they choose.[8] However, as mentioned, we have seen a massive shift in the college football landscape. Conferences have realigned, and one of them has essentially gone extinct.[9] Although we don’t know where this process will lead us, but one possibility is that conference concentration continues. It’s not hard to imagine a scenario where only the SEC and Big 10 contain every major institution in college football. The question would then be, do those conferences have market power such that the athletes have no reasonably interchangeable alternatives?
The goal of a Power 5 athlete, in general, is to make it to the NFL, and their path to doing so is currently through the NCAA. However, one is much more likely to make the NFL from a Power 5 school than a Group of 5 school.[10] If the Power 5 were to become one or two conferences, almost everyone with NFL ambitions would desire to attend a school in this “super conference,” thus creating market power because they would be able to restrict payments to players while players would choose to attend because they feel there is no alternative.
There is ongoing litigation between schools and athletes of the Ivy League conference which could provide insight into the issue of market and market power.[11] As a conference, the Ivy League restricts schools from giving out athletic scholarships to its athletes.[12] The plaintiffs argue that the market the schools are recruiting from is academically and athletically elite athletes, a group that is interested almost exclusively in the Ivy League and which the Ivy League is a significant portion of.[13] The plaintiff claims there is no reasonable alternative for their services, and the defendants have market power, allowing them to restrict athletic scholarships.[14]
This is a situation almost exactly like what could happen with the “super conferences” – almost complete control over a specific sector of college athletes. I am not confident the conferences would ever attempt to restrict NIL, as the public perception is very supportive of student athletes being paid. However, if they were to try, the Courts would likely find fault with it like in Alston, and the Ivy League case will give us even greater insight into that possibility.
It will be interesting to see the landscape of NIL and conference realignment unfold over the next few years. Will the power conferences try to become the NCAA and impose their own restrictions? It’s very possible, but they will have major problems if they do, from both antitrust law and the public.
[1] Nat’l Collegiate Athletic Ass’n v. Alston, 141 S. Ct. 2141, 2151 (2021).
[2] Id. at 2166.
[3] Id.
[4] See Sarah Traynor, California Says Checkmate: Exploring the Nation’s First Fair Pay to Play Act and What It Means for the Future of the NCAA and Female Student-Athletes, 20 Wake Forest J. Bus. & Intell. Prop. L. 203, 216 (2020) (“California’s passage of the Fair Pay to Play Act has resulted in an unprecedented wave of state legislation seeking to control the NCAA.”).
[5] See Associated Press, NCAA Releases Draft of Streamlined Constitution That Would Give Power to Schools, ESPN (Nov. 8, 2021, 10:21 AM), https://www.espn.com/college-sports/story/_/id/32583346/ncaa-releases-draft-streamlined-constitution-give-power-schools.
[6] NCAA v. Bd. of Regents of the Univ. of Oklahoma, 468 U.S. 85, 109 n.38 (1984).
[7] Alston, 141 S. Ct. at 2167 (explaining “[T]here are serious questions whether the NCAA’s remaining compensation rules can pass muster under ordinary rule of reason scrutiny. Under the rule of reason, the NCAA must supply a legally valid procompetitive justification for its remaining compensation rules. As I see it, however, the NCAA may lack such a justification.”).
[8] Id.
[9] Brent Schrotenboer, Who’s to blame for college football conference realignment chaos?, USA Today (Aug. 10, 2023, 6:13 AM), https://www.usatoday.com/story/sports/ncaaf/2023/08/10/big-ten-big-12-pac-12-college-football-conference-realignment/70559721007/.
[10] NCAA, https://www.ncaa.org/sports/2015/2/27/football-probability-of-competing-beyond-high-school.aspx.
[11] Complaint at 1, Choh et. al. v. Brown et. al., No. 3:23-CV-00305-AWT (D. Conn. 2023).
[12] Id. at 8.
[13] Id. at 45.
[14] Id. at 49.
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