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Friday, June 25, 2021

The Supreme Court Just Struck a Blow for Student Athletes Against the NCAA. Here’s One Reason to Cheer

More free-market principles could soon take root in college sports.

Image Credit: PICRYL Public Domain Image

Two-thirds of Americans now say they believe student athletes should be able to profit off their names and likeness. And 51 percent of those go even further, stating that they should be paid for their labor above the cost of free tuition and board.

But schools have been slow to respond, and rules by the National Collegiate Athletic Association (NCAA) have a lot to do with that. The NCAA prohibits schools from competing for student talent by offering better benefits — a rule that the US Supreme Court unanimously struck down this week.

While the case was not broad enough to address issues surrounding student pay and compensation, the justices did rule that the NCAA must allow schools to recruit athletes by offering additional benefits tied to their education.

What does that look like? Scholarships for graduate or vocational programs, technology equipment, study abroad programs, internships, and at times, small cash rewards for those who excel in the classroom.

The move follows a wave of laws at the state level that are poised to allow student athletes to make endorsement deals, and comes as the top athletic conferences and schools within them are preparing to meet to handle such developments.

Justice Neil Gorsuch wrote the majority opinion in the decision, and in it he noted that, as The Wall Street Journal reported, “while the NCAA is entitled to some leeway to administer the college-sports landscape, that didn’t mean the association enjoyed de facto immunity from the Sherman Act, the central federal law barring anticompetitive conduct…”

But Justice Brett Kavanaugh signaled there could be more legal problems for the NCAA ahead, writing in a concurring opinion that the remaining rules limiting compensation “raise serious questions under the antitrust laws.”

“Traditions alone cannot justify the NCAA’s decision to build a massive money-raising enterprise on the backs of student athletes who are not fairly compensated,” Justice Kavanaugh wrote. “Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate.”

Though the current ruling does not go as far as many wish it to, it could, as the Journal explains, “have a wide impact because it dealt a considerable legal blow to the NCAA’s ability to use amateurism as a shield against efforts by athletes to share in the successes of a multibillion-dollar industry built on their labor.”

The NCAA’s Rules Are an Affront to the American Dream

The athletes have sympathetic supporters among both Democrats and Republicans, who also may choose to take on legislation to address the issue. It seems wide swaths of the American public still believe people should be paid for their labor and that they should be able to negotiate their pay in a free market—and thank God for that. These are important principles for a free society.

In a free market, when a person excels in their work, competition would drive their salaries up. To remove this opportunity for growth is an attack on the American Dream and frankly, unethical.

Compounding the ickiness factor of this entire scenario is the racial component present in many of the league’s dynamics. A large percentage of student athletes are black, and the programs that bring in the most revenue for schools (traditionally basketball and football) are predominantly led by black athletes. The revenue made from their work is used to fund programs and scholarships for lesser-watched sports, like golf or swimming—which have higher participation rates of white students. This means that the work of black athletes is not only paying for the school’s administration, but also funding the tuition and scholarships of other students.

Not a good look.

Capitalism Is the Counter to Inequality

It is not uncommon to see anti-competitive and anti-capitalist policies produce racial disparities such as this. In fact, government interventions into the market have a long history of creating scenarios with racial inequalities. Capitalism is actually the solution to such problems as a free market produces equality of opportunity and merit-based rewards.

Milton Friedman once said, “Business corporations in general are not defenders of free enterprise. On the contrary, they are one of the chief sources of danger….Every businessman is in favor of freedom for everybody else, but when it comes to himself that’s a different question. We have to have that tariff to protect us against competition from abroad. We have to have that special provision in the tax code. We have to have that subsidy.”

So, it isn’t surprising in the least that schools wish to shield themselves from competition or that they wish to pay their employees as little as possible. What prevents a business from being able to get away with that is competition in the free market.

Anti-trust policy is highly problematic from a libertarian perspective, and the rights and responsibilities of the NCAA are a murky matter, given its mixed public-private status. But whether this Supreme Court decision was the right call or not, a freer market in college sports would be a more just one.

  • Hannah Cox is the former Content Manager and Brand Ambassador for the Foundation for Economic Education.