The fallout from the recent Supreme Court decision in NCAA vs. Alston continues. On July 1st, a number of state laws allowing for various forms of athlete compensation went into effect. Within hours, athletes began inking name, image, and likeness (NIL) deals. The grab for cash is on. If you thought that the last year of collegiate athletics was a fiasco, you were right. If you think the future will resemble a circus, you’re probably right.
Last fall, we all saw the very public struggles of football conferences to figure out what to do about balancing player and fan safety with the need for revenue. It wasn’t just football. My daughter played soccer for Houston and they saw the regular (fall) season cancelled and an attempt at a modified (spring) season start, stop, and limp along.
I see the root cause of all of this confusion in a dominant mindset originating with the NCAA: just hope for the best and rely on the goodwill of all our stakeholders. Let me outline why this turned out to be strategic risk management at its worst.
The NCAA’s Fundamental Planning Failure
“Hoping for the best” is only a good strategy if you also “plan for the worst.” The NCAA has had ample time to plan for the worst. In 2016, the Supreme Court upheld a lower court ruling in O’Bannan vs. NCAA that its policies of limiting compensation to athletes violated the Sherman Antitrust Act. O’Bannan set the stage for Alston and a further erosion of the NCAA’s historical stance against athlete compensation in the name of amateurism. A concurring opinion in Alston written by Justice Kavanaugh opens the door to future litigation that would erode what’s left of the concept of amateur sports at the collegiate level, at least in the big money sports.
Put simply, the NCAA had five, count them 5, years to anticipate the Alston decision and be proactive in setting up a player compensation system. Why couldn’t the organization figure out a response before the 30th of June this year? After all, the leaders of the NCAA are college presidents, people who should be pretty smart. Their main challenge is their diversity. The NCAA has number of Snow White Schools (Alabama in football and Duke in basketball), but they have far more than seven dwarves (small schools Bemidji State or Claremont McKenna College). The Snow White’s live in a different world than the dwarves, economically, scholastically, and athletically. The NCAA, as an umbrella organization, hopes for a world of Snow White and the Dwarves, not Snow White or the Dwarves.
So, the plurality of interests mean that any agreement would be difficult and bring pain all around. Snow White had no desire to be seen as murdering the dwarves, and the dwarves had no desire to see their commitments to athletics die. So, no one had a strong incentive to make a deal, and the hard decisions could all be put off because both Snow White and the Dwarves could cling to an illusion that they didn’t really need to change.
Holding on to Illusions
The first illusion was that the US Congress would make the hard choices for the organization. Why make a tough choice if someone else will do it for you? The NCAA put their faith in Senators and Representatives, who would surely craft meaningful legislation that worked for all. Anyone who has watched the US Congress in action over the last decade realizes that Congress does nothing that it absolutely doesn’t have to do. Much of the legislation that does get passed is in response to emergency situations—think natural disasters, the 2008 financial crisis and recession, the COVID-19 pandemic—or funding the government. The idea of a highly partisan and divided Congress reaching common ground on collegiate sports wasn’t just a hope, it was a wish and an illusion.
The second illusion was that courts would uphold the NCAA’s antitrust exemptions in the name of “amateurism.” Few of us believe the illusion that universities, administrators, and coaches are acting out of benevolence or a love of sport. When coaches make 7-figure salaries and their universities rake in 8-9-digit revenues, it’s hard to talk seriously about the purity of sport. Justice Kavanaugh pulled away the curtain on the last remnants of the amateur model with his biting commentary about how an appeal to amateurism would play in other industries.
On June 30th, the NCAA, facing fourth and a country mile, punted. The organization acquiesced to the principle to athletes signing NIL deals, and effectively ceded control of the issue to state legislatures, athletic conferences, and individual colleges. My prediction is that we won’t see any meaningful action on this issue until payments for NIL either reach obscene levels or lead to the NCAA’s worst nightmare: Snow White but no Dwarves. Long after the horse leaves the barn, the organization might figure out a way to close the door, long after the barn has been abandoned.
Bottom Line: “hoping for the best” is not a strategy. We all live in ecosystems where we’re either Snow White or a Dwarf. Putting our faith in illusory solutions, particularly a government bailout, is a reactive way to manage both strategy and risk. Abandon illusions, live in reality, and work to forge agreements that maintain the ecosystem. You’ve got to give something to get something.