The 2026 Northwestern Essay #3--College Sports, Amatuerism and Anti-Trust Law

Northwestern (1-0) plays Colorado (2-0) tomorrow at 7:30 pm Eastern.  The game will be the final game at NU's lakeside stadium, and will be broadcast on FOX.  Colorado is best known for its head coach, Deion Sanders.  If you have watched any college football so far this season, you likely have a seen a commercial featuring Deion Sanders promoting a proposed piece of Congressional legislation called the Protect College Sports Act.  ESPN also spent a significant portion of its (now unwatchable IMO) pre-game show College Gameday promoting the Protect College Sports Act via giving its primary author Senator Ted Cruz a ton of screen time.  Given this, I thought it would make sense to talk through the legislation, its purpose, and the history of the NCAA's legal misadventures.

The Sherman Anti-Trust Act, codified beginning at 15 U.S. Code section 1, states that "[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal."  Included in the definition of "restraint of trade" is a cartel arrangement designed to suppress wages.  If you and I are the only two employers in a given market and we agree that we will only pay X amount in wages, then we are a combination or conspiracy in restraint of trade.  That's prohibited under anti-trust laws.

Now, you might see how this is potentially a problem in the context of college athletics.  Prior to the recent events we will get to in a moment, the National Collegiate Athletic Association (a body formed by the the post-secondary schools in the United States) put out a series of rules that said that no member institution could provide any compensation to those playing sports on behalf of the institution beyond a full tuition scholarship.  This is, at least on a facial level, a combination or conspiracy that restrains trade in the sense that it limits wages for a service (i.e. playing sports for the school).  But the NCAA not simply an anti-trust problem because of the rules on scholarships--basically everything the NCAA does is potentially an anti-trust violation.  Telling schools who they can and cannot schedule games against is potentially an anti-trust violation, to take one example.

And this is not just an NCAA problem--organized sports that have a commercial component are inherently anti-trust violations, because separate economic actors have to collude to limit and control how the economics of their sport plays out.  The fact that the Dallas Cowboys would refuse to play a team you put together because your team is not one of the 31 other recognized NFL franchises is a restraint of trade.  So every sports enterprise must exist within one of the established anti-trust exemptions--specific carve-outs that put certain kinds of economic activity outside the purview of anti-trust law.  In the case of professional sports, the solution more or less is the organized labor carve-out.  After all, collective bargaining agreements are the definition of a combination designed to restrain the labor activity of workers, so would be prohibited under anti-trust law.  But the moment a union is formed, the whole operation gets taken out of the world of anti-trust law and into the world of labor law, in which a whole different set of rules apply.  Professional sports in the United States could not exist without organized labor. 

[The possible exception here is Major League Baseball, which might still have an anti-trust exemption from a Supreme Court case from 1922.  But given the way the Supreme Court recently handled college sports' anti-trust status (see below), I think it is very unlikely that Federal Baseball Club v. National League would be followed by the modern Supreme Court].

The NCAA has chosen a different path.  It has asserted, to simplify their argument, that they should not be viewed as "trade or commerce," and thus are not subject to anti-trust regulation from the jump.  The idea here is that the NCAA consists of non-profit entities whose purpose is to provide education, and anything they do in the sports space is ancillary to that mission and thus shouldn't be considered bona fide economic activity.

The first time this theory was really tested was in the early 1980s in a case called NCAA v. Board of Regents of the University of Oklahoma.  Back in the 1980s, the NCAA limited the number of college football games that could be broadcast on TV, in theory to protect gate revenues for member schools.  The University of Oklahoma and the University of Georgia sued to challenge the broadcast restrictions, and the case went to the US Supreme Court.  The Supreme Court held for the University of Oklahoma, saying that the NCAA's enforced restrictions on broadcasts was an anti-trust violation, and that the University of Oklahoma had the right to shop its broadcast rights to willing TV partners 

[Which it eventually did via the conferences it was a member of--the Big 8, then the Big 12, and now the SEC. If you want a history of college football broadcast rights, and other issues related to the development of the business of college sports, I highly, highly recommend Ryan Nanni and Steven Godfrey's podcast series Who Killed College Football?]

As is often the case with appellate court opinions, the Supreme Court's 7-2 majority went out of its way to say that just because it was saying that the broadcast restrictions were an anti-trust violation (the issue in front of the Court), it was not saying that other things the NCAA did were also anti-trust violations.  As such, even though the NCAA lost in the Board of Regents case, it took from it the position that its restrictions on "amateurism" (i.e. limits on student-athlete compensation) were permissible--even though Board of Regents does not explicitly say that.

Fast forward to 2009 and O'Bannon v. NCAA.  Ed O'Bannon was a basketball player for UCLA who noticed that you could go on the NCAA College Basketball video game and play his UCLA team with a player who looked a whole lot like him and had all of his stats.  In other words, at the very least the "image and likeness" part of "Name, Image, and Likeness" was being licensed by the NCAA to EA for the video game, without providing any compensation to O'Bannon.  Moreover, while he was a player at UCLA, O'Bannon could not sell his own NIL for compensation, while the NCAA was free to do so without compensating him.  This was, among other things, an anti-trust violation according to O'Bannon.

The federal judge in San Francisco eventually agreed with O'Bannon after a bench trial, and the federal appellate court agreed with the core holding of the judge's decision.  Now, the relief that O'Bannon was seeking was limited to backward-looking NIL-related compensation and a small subset of other compensation.  But subsequent to O'Bannon, other former and current college athletes filed similar suits seeking things like full cost of attendance (not just tuition and room and board but incidental expenses) as well as unlimited NIL rights.  These cases eventually got consolidated into Alston v. NCAA, and the same judge hearing the O'Bannon case found for the plaintiffs as well.  This resulted in a ruling that, in essence would allow the NCAA to prohibit direct cash payments to athletes, but nothing else.

The NCAA appealed this decision to the Supreme Court.  It did not go well.  The Court unanimously upheld the Alston ruling, with Justice Brett Kavanaugh making it clear he thought it didn't go far enough and that he was inclined to declare any restriction on student-athlete compensation to be an anti-trust violation.

Which in turn brings us to the Protect College Sports Act.  While there are a number of provisions in the Act, in a sense the only one that matters is a statutory anti-trust exemption for the NCAA, basically nullifying the Alston decision and allowing the NCAA to put whatever restrictions it wants on athlete compensation subject only to the provisions of the Protect College Sports Act itself.  Schools would be allowed to pay NIL, but would be subject to what is essentially a "salary cap" (a salary cap that would apply to not just football players, but the entire athletic program--including non-revenue and women's sports)  There would also be a series of transfer restrictions (which were also found to be anti-trust violations).  In return, schools would be prohibited from cutting certain non-revenue sports and would have to pay for increased health care for student-athletes after the end of their playing period.

Perhaps the most interesting, if I think ultimately collateral, part of the Act is what it does to compliance.  Everyone understands that schools used to routinely violate the restrictions on student-athlete compensation and would "pay players under the table."  When this would come to light, schools and their proxies would be investigated by the NCAA and the punishment would be things like loss of scholarships or access to post-season tournaments or events.  If the Protect College Sports Act passes, violations of these rules become violations of federal law.  So, you would no longer be getting a visit from a dude from the NCAA, but an FBI agent with full subpoena power and the possibility of criminal charges.  This certainly seems like a raising of the stakes, but perhaps the schools have decided that they want to get out of the under-the-table game given the new world of NIL.  On the other hand, as soon as you have a salary cap, you are going to create incentives to violate that cap--just ask the Los Angeles Clippers.

To be completely transparent, I am conflicted on the Protect College Sports Act.  On the one hand, it feels like it hands the NCAA a win they don't deserve, as they have been incredibly pig-headed and stupid throughout this entire process.  And I think student-athletes that generate massive revenues for these schools should be fairly compensated, and this will necessarily and inevitably reduce that compensation (without any reduction in compensation to, for example, coaches).  And I don't really think that federal law enforcement resources should be devoted to going after various bag-men who surround college campuses.  But I think the current situation is untenable--in large measure as a result of decisions made by the NCAA, but nevertheless untenable.  And I think the proposed rules are relatively reasonable on their face.  

On the third-hand, I think it is unlikely to pass, given the general chaos in Washington, so I think some of this discussion is academic. They had procedural vote in the Senate earlier this week, but there are at least two more procedural votes that it must get through before final passage just in the Senate, let alone the House (which in recess and will be in recess until after the midterm to avoid having to vote on the Articles of Impeachment currently pending on Defense Secretary Pete Hegseth).  And I saw some reports suggesting that changes were being made at the eleventh hour, which is always a bad sign.  I could see it sliding through after the midterms during the lame duck period, but I don't think it is close to being a done deal.