Student-Athlete Compensation
in College Athletics:
An Examination of Edward O’Bannon, et al. v.
NCAA; Electronic Arts Inc.; and Collegiate Company
Zach Pogust
Professor Jordi Comas
Mgmt 302: The Stakeholder Organization
12/18/14
Zachary Pogust
2
Executive Summary
The NCAA was founded in 1905 by sixty-two college presidents with the intention of
creating a uniform set of rules to regulate intercollegiate football. Today, the association
monitors roughly eleven hundred member schools, regulating intercollegiate athletic
competitions in roughly two-dozen sports (Edward O’Bannon v. NCAA, 2). According to the
NCAA manual, the association seeks to “initiate, stimulate and improve intercollegiate
athletic programs for student-athletes and to promote and develop educational leadership,
physical fitness, athletics excellence and athletics participation as a recreational pursuit”
(NCAA Academic and Membership Affairs Staff, 15). To achieve these objectives the
NCAA enforces a set of rules and regulations governing athletic competitions and the actions
of its member-school’s student-athletes. Among other things, these rules prohibit studentathletes from receiving any compensation resulting from their athletic performance and place
a limit on the size of the athletic scholarships that the member-schools can provide to their
student-athletes. These rules and regulations remained relatively untouched from 1973 (when
the NCAA began to re-organize itself into the three distinct divisions that are still in
existence today: Division 1, II & III) and 2009 (when a group of current and former FBS
football and Division 1 basketball student-athletes sought to challenge the NCAA
restrictions, claiming that they violate the Sherman Antitrust Act).
This policy paper is directed at the NCAA and will first proceed by examining
the Edward O’Bannon, et al. v. NCAA; Electronic Arts Inc.; and Collegiate Licensing
Company case, including the assertions of the Plaintiffs and Defendants, and ultimately
discussing the decision issued by the court. Next, the evolution of the collegiate sports
industry (specifically FBS football and Division 1 basketball) will be reviewed as a way to
3
show why this court remedy is necessary and can even benefit the NCAA. Lastly, The policy
paper will provide a few strategic recommendations for the NCAA that, in combination with
the court injunction, will help rid the them of the contradictions that exist between their
stated mission/objective and consequences that result from their regulations.
4
Table of Contents
EXECUTIVE SUMMARY ........................................................................................................................... 2
EDWARD O’BANNON, ET AL. V. NCAA; ELECTRONIC ARTS INC.; AND COLLEGIATE
LICENSING COMPANY ............................................................................................................................. 5
CASE OVERVIEW .......................................................................................................................................................5
SHERMAN ANTITRUST ACT ....................................................................................................................................6
THE MARKETPLACE .................................................................................................................................................7
College Education Market .................................................................................................................................. 7
Group Licensing Market ...................................................................................................................................... 8
THE CHALLENGED RESTRAINT ..............................................................................................................................8
ASSERTED PURPOSES OF RESTRAINT ................................................................................................................ 10
REMEDY & CONCLUSION ...................................................................................................................................... 10
WHY THIS CHANGE? ............................................................................................................................ 11
EVOLUTION OF THE INDUSTRY ........................................................................................................................... 11
NCAA: The Best Monopoly in America ........................................................................................................12
“Amateurism” and the “Student-Athlete”..................................................................................................13
The Black Market ..................................................................................................................................................15
RECOMMENDATIONS........................................................................................................................... 16
DECISION TO APPEAL ........................................................................................................................................... 16
ONE-YEAR VS. FOUR-YEAR SCHOLARSHIP OPTION ........................................................................................ 17
SCHOLARSHIP REQUIREMENT ........................................................................................................................ 18
CONCLUSION ........................................................................................................................................... 19
FIGURES, DATA, TABLES .................................................................................................................... 21
WORKS CITED ........................................................................................................................................ 23
5
Edward O’Bannon, et al. v. NCAA; Electronic Arts Inc.; and
Collegiate Licensing Company
Case Overview
Edward O’Bannon, et al. v. NCAA; Electronic Arts Inc.; and Collegiate Licensing
Company is an antitrust class action lawsuit that was initiated in 2009, however it wasn’t
until August 8th, 2014 that United States District Judge Claudia Wilken entered a decision.
The Plaintiffs in the case consist of twenty current and former college student-athletes, all of
whom play or played for an FBS football or Division 1 men’s basketball team between 1956
and present (Edward O’Bannon v. NCAA, 6). The Plaintiffs brought about the case to
challenge the NCAA’s long-standing rules restricting compensation for elite men’s football
and basketball players at the collegiate level. More specifically, the Plaintiffs contend that the
regulations placed upon them violate the Sherman Antitrust Act and that they should be
entitled to receive a “share of the revenue that the NCAA and its members schools earn from
the sale of licenses to use the student-athletes’ names, images and likenesses in videogames,
live game telecasts, and other footage” (Edward O’Bannon v. NCAA, 1). The defendants in
the case are the NCAA, Electronic Arts Inc. and the Collegiate Licensing Company, however
the NCAA is the primary defendant and at the center of this case. The NCAA denied the
claim that its rules restricting compensation violate the Sherman Antitrust Act and assert that
the regulations are necessary to “uphold its educational mission and to protect the popularity
of collegiate sports” (Edward O’Bannon v. NCAA, 2). “Wilken was not asked to rule on the
fairness of a system that pays almost everyone but the athletes themselves. Instead, the case
was centered on federal antitrust law and whether the prohibition against paying players
6
promotes the game and does not restrain competition in the marketplace” (ESPN.com News
Services). Although the case raises important questions and considerations regarding athletic
competition on the field and court, it is principally about the rules governing competition in a
different arena – the marketplace (Edward O’Bannon v. NCAA, 1).
Sherman Antitrust Act
In order for one to understand the framework through which this case was viewed and
ultimately decided by Judge Wilken, it is important to understand the basic idea of the
Sherman Antitrust Act and its intended purpose.
The Sherman Antitrust Act is a federal anti-monopoly and anti-trust statute that was
passed in the Senate on July 2nd, 1980. It was initially established to alleviate concern
regarding monopolies dominating America’s free market economy throughout the late 1800s
and was viewed as a way to combat anti-competitive practices. The act was the first Federal
act to outlaw monopolistic business practices, specifically trusts (“Sherman Anti-Trust Act
[1980]”). According to the government-produced article entitled, “Sherman Anti-Trust Act
(1980),” a trust, at the time, was “an arrangement by which stockholders in several
companies transferred their shares to a single set of trustees. In exchange, the stockholders
received a certificate entitling them to a specified share of the consolidated earnings of the
jointly managed companies” (“Sherman Anti-Trust Act [1980]”). Trusts came to dominate
various major industries, destroying competition along the way. Section 1 of the act states,
“[e]very contract, combination in the form of trust or other-wise, or conspiracy, in restraint of
trade or commerce among the several States, or with foreign nations, is hereby declared to be
illegal” ("Transcript of Sherman Anti-Trust Act [1890]”).
7
Congress derived its power to pass the Sherman Act through its constitutional
authority to regulate commerce. Therefore, the Sherman Act can only be used when
the conduct in question restrains or substantially affects…interstate commerce...To
satisfy this jurisdictional requirement, the Pmust show that the conduct in question
occurs during the flow of interstate commerce or has an appreciable effect on some
activity that occurs during interstate commerce. (“Antitrust”)
The Sherman Antitrust Act, which is at the heart of most federal antitrust litigation in
the United States, is the principle area of focus in this case, as the Plaintiffs attempt to prove
that the NCAA restrictions restrain trade in the marketplace.
The Marketplace
As is the case with any antitrust litigation, the Plaintiffs must identify an economic
market that has been impaired by the restraint of trade. The Plaintiffs in the case allege that
the NCAA has restrained trade and competition in two national markets: the “college
education market” and the “group licensing market.” “Although these alleged markets
involve many of the same participants, each market ultimately involves a different set of
buyers, sellers and products” (Edward O’Bannon v. NCAA, 7).
College Education Market
Evidence presented at trial, including testimony from both experts and lay witnesses,
or witnesses not testifying as experts, established that FBS football programs, along with
Division 1 basketball programs, both compete to recruit the best high-school players. The
schools act as the sellers and the high-school athletes act as the buyers in this scenario.
“[T]hese schools compete to sell unique bundles of goods and services…[including]
scholarships to cover the cost of tuition, fees, room and board, books, certain school supplies,
tutoring and academic support services” (Edward O’Bannon v. NCAA, 7). Additionally, they
compete to sell access to high-quality athletic coaching, medical treatment, state-of-the-art
8
athletic facilities and even the opportunity to compete in front of large crowds and television
audiences (Edward O’Bannon v. NCAA, 7). In exchange for these unique bundles of goods
and services, the recruits agree to provide their respective schools with their athletic abilities
and allow for their names, images and likenesses to be used for commercial and promotional
purposes. Additionally, the court found that no viable substitutes exist, as the bundle of
goods and services offered by schools with major sports programs is truly unique. Thus,
these schools comprise a market that is relevant to the discussion of the alleged violations.
Group Licensing Market
The Plaintiffs argue that in the absence of the NCAA restrictions on student-athlete
compensation, athletes would be able to offer group licenses to be sold to their respective
schools, third-party licensing companies, or media companies hoping to use athletes’ names,
images and likenesses (Edward O’Bannon v. NCAA, 13). The Plaintiffs identify three
submarkets in which group licensing would be practical:
1. Live game telecasts
2. Videogames
3. Game re-broadcasts, advertisements and other archival footage
The Plaintiffs show that a demand exists for the rights to each of these three potential grouplicensing submarkets to which the court agrees.
The Challenged Restraint
In the next section of the ruling, “The Challenged Restraint,” Judge Wilken discussed
the means by which the NCAA is able to impose limits on their student-athletes, and the
implications of these limits.
To start, the NCAA “prohibits any student-athlete from receiving ‘financial aid based
on athletics ability’ that exceeds the value of a full ‘grant-in-aid”’(Edward O’Bannon v.
9
NCAA, 19). According to the NCAA bylaw 15.02.5, a full “grant-in-aid” is defined as
“financial aid that consists of tuition and fees, room and board, and required course-related
books” (NCAA Academic and Membership Affairs Staff). The NCAA also prohibits any
student-athlete from receiving financial aid in excess of his “cost of attendance,” “an amount
calculated by an institutional financial aid office, using federal regulations, that includes the
total cost of tuition and fees, room and board, books and supplies, and other expenses related
to attendance at the institution” (NCAA Academic and Membership Affairs Staff).
Additionally, the NCAA bylaws state that an athlete may not receive any compensation due
to their publicity, reputation, fame or personal following they may have obtained because of
athletic performance or ability and may not endorse any commercial product, regardless of
whether or not they receive compensation for it (Edward O’Bannon v. NCAA, 21).
After an examination of these restraints by Dr. Noll, the Plaintiff’s economic expert,
he explained, “because the NCAA has the power to and does suppress the value of athletic
scholarships through its grant-in-aid rules, it has increased the prices schools charge recruits”
(Edward O’Bannon v. NCAA, 21). The court subsequently agreed, claiming the price-fixing
agreement among FBS football and Division 1 basketball schools are harmful to studentathletes at these schools.
In the complex exchange represented by a recruit’s decision to attend and play for a
particular school, the school provides tuition, room and board, fees and book
expenses, often at little or no cost to the school. The recruit provides his athletic
performance and the use of his name, image, and likeness. However, the schools
agree to value the latter at zero by agreeing not to compete with each other to credit
any other value to the recruit in the exchange. This is an anticompetitive effect. Thus,
the Court finds that the NCAA has the power – and exercises that power – to fix
prices and restrain competition in the college education market that Plaintiffs have
identified. (Edward O’Bannon v. NCAA, 22-23)
10
Asserted Purposes of Restraint
The NCAA attempts to defend its restrictions by claiming they are necessary to
preserve its tradition of amateurism, maintain a competitive balance, promote the integration
of academics and athletics and increase the total output of its product. In regard to each of
these, the court did not find NCAA’s evidence to be sufficient in justifying the challenged
restraint and believe less restrictive rules regarding player compensation can still allow for
these corporate objectives to be met.
Remedy & Conclusion
The Court found that the restraints imposed by the NCAA do, in fact, violate antitrust
law. Accordingly, the Court entered an injunction to remove an unreasonable element of
restraint imposed by the NCAA on its member schools and student-athletes. FBS football and
Division 1 basketball teams will not be prohibited from offering their recruits a limited share
of the revenues generated from the use of their names, images and likenesses in addition to a
full grant-in-aid (Edward O’Bannon v. NCAA, 96). While the NCAA will be allowed to set a
cap on the amount of compensation a student-athlete may receive while enrolled in school,
the NCAA will not be permitted to set this cap below the cost of attendance (Edward
O’Bannon v. NCAA, 96). Additionally, the NCAA will be prohibited from enforcing rules
that prevent its members schools and conferences from offering to deposit a limited share of
licensing revenue into trust funds for their student-athletes, payable once they are no longer
enrolled. The NCAA will also be allowed to set a cap on the amount of money that may be
held in trust, yet it cannot be less than $5,000 for every year that the student-athlete remains
academically eligible to compete (Edward O’Bannon v. NCAA, 96). Lastly, the injunction
11
will not preclude the NCAA from enforcing its existing rules – or enacting new rules
– to prevent student-athletes from using the money held in trust for their benefit to
obtain other financial benefits while they are still in school…and will not preclude the
NCAA from continuing to enforce all of its other existing rules which are designed to
achieve its legitimate precompetitive goals. (Edward O’Bannon v. NCAA, 97).
Why This Change?
Evolution of the Industry
With each new college football bowl season we are reminded that the story of
intercollegiate athletics in higher education is rich in history, anchored in tradition,
and tied to the heart of university communities. As enduring as the storied rivalries,
larger than life characters, bruising nature of the game itself, and fervor of fans are, so
too are the issues associated with the compensation of athletes for their services.
(Huma & Staurowsky, 4)
It’s time we take a step back, strip away all of the trivial symbolism and tradition of college
athletics, and analyze the core issues at play. While the feelings of nostalgia and admiration
of imperfect athletic performance are part of what makes college sports so popular and
unique, we must now evaluate the current state of college athletics and the billion-dollar
business it has become in order to understand why the changes initiated by the court were
necessary.
Major collegiate sports industries, such as American college football, have seen
consistent growth since their founding. As seen in Figure 1, revenue generated by college
athletics at FBS schools has grown tremendously over the past few years. The University of
Alabama, for example, generated more revenue from their athletic programs last year than
did any U.S. or Canadian professional ice-hockey team (McDuling). FBS football and
Division 1 basketball programs have become the most popular of all collegiate sports and
have generated millions of dollars of revenue for NCAA member schools. As seen in Figure
2, men’s football and basketball teams often account for up to 50% to 75% of a school’s
12
revenue generated from all of their athletics. For this reason, the case and injunction issued
only pertain to these two sports within Division 1 member schools.
As college athletics has developed into a multi-billion dollar business, the NCAA has
not made the necessary changes to their governance that is needed to keep up with the everexpanding industry that they oversee. Up until the decision issued by Judge Wilken, the
NCAA had exercised unilateral authority and suppressed the value of the very athletes who
are the marketable commodities on which their member colleges and universities build their
sports enterprises (Huma & Staurowsky, 6). The examination of the different actors within
this multi-billion dollar industry, and how their roles have changed over time, will further
illustrate why this class action lawsuit was necessary.
NCAA: The Best Monopoly in America
Back in 2002 a panel of Harvard University economists claimed the NCAA was the
clear-cut choice for the best monopoly in America (Barro). Under the guise of amateurism
the NCAA has successfully stifled financial competition in college sports (Barro) and has
handed out hefty paychecks to just about everyone in the industry except for the actual
laborers themselves. Additionally, and as discussed in the findings of facts and conclusions
of law in the case, the NCAA has used its power to suppress the value of athletic
scholarships, ultimately increasing the prices schools charge recruits. With one agency (the
NCAA) governing all of the suppliers that offer a unique bundle of goods and services, there
remains no incentive for the NCAA to improve and meet the demands of their consumers, a
common quality of most monopolies.
As the only governing body in an ever-growing industry, the NCAA’s decision to
resist making changes to their operations seems to be self-serving and is exactly what they
13
had always done. The NCAA has relied on the same arguments over the years to defend
these self-serving antics; “[a]t the core of every position taken by the NCAA regarding
athlete compensation is its principle of amateurism” (Huma & Staurowsky, 11) and idea of
the student-athlete.
“Amateurism” and the “Student-Athlete”
While the NCAA has repeatedly relied on these two concepts to support and defend
its decision making process, they have done a great deal to undermine their own idea of
amateurism and the concept of the student-athlete. To start, NCAA leaders have often been
unable to clearly articulate a logical rationale for its version of amateurism. Below is an
excerpt from an interview that took place between former NCAA President Myles Brand and
Sports Illustrated columnist Michael Rosenberg in 2011:
"They can't be paid."
"Why?"
"Because they're amateurs."
"What makes them amateurs?"
"Well, they can't be paid."
"Why not?"
"Because they're amateurs."
Who decided they are amateurs?
"We did."
"Why?"
"Because we don't pay them."'
“The NCAA assertion that ‘student-athletes’ will not be paid because they are
students first and athletes second does not withstand a basic test of logic” (Huma &
Staurowsky, 9). Football and basketball players attending schools with big-time sports
programs are, according to the NCAA, to be considered an integral part of the student body,
yet NCAA regulations force students to shoulder a burden that no other students share (Huma
& Staurowsky, 7). Scholarships, for example, were changed from four-year athletic
14
scholarships to one-year renewable scholarships in 1973 (Sack & Staurosky). Thus, because
scholarships are now renewable at the discretion of the athletic coaches, the players are
essentially voiceless when it comes to their own educational welfare and under great pressure
to remain athletically competitive.
Subsequently, this pressure leads to a complete and utter disregard of the NCAA’s
own “4 and 20” rule by players, coaches and the member schools themselves. This rule
restricts a college athlete from dedicating more than 4 hours per day and 20 hours per week
to their sport; however, according to data gathered by the NCAA for the 2009-2010 academic
year, FBS athletes reported spending 43.4 hours per week on athletic activities in-season and
Division 1 men’s basketball players reported spending 39.2 hours per week on athletic
activities in-season (Huma & Staurowsky, 8), both approximately double the allotted time.
While NCAA coaches may not explicitly impose certain requirements, such as working out
during the offseason, the players know that if they don’t, they may not remain competitive
and will ultimately risk the renewal of their scholarship. The lead Plaintiff in the trial, former
UCLA basketball star Ed O’Bannon, testified in court that he felt like “an athlete
masquerading as a student” during his college days (Edward O’Bannon v. NCAA, 39).
Between practices, traveling and games, student-athletes playing football at FBS schools and
basketball at a Division 1 schools are far from integrated into their academic communities
and the NCAA’s current rules do not help to promote academics above athletics. While this
problem is not one that the Court was asked to resolve in this case, it undermines the
NCAA’s primary stance on why they restrain student-athlete compensation.
15
The Black Market
“[T]he NCAA’s version of amateurism is not only at the root of the problem, it is
impossible to uphold” (Huma & Staurowsky, 20). Because the athlete’s full “grant-in-aid”
scholarship is typically still a few thousand dollars below the actual cost of attendance, which
includes things such as transportation and other expenses related to attendance at a specific
institution, it is not surprising that scandals involving players receiving money in violation of
NCAA restrictions is common. Inside Higher Education reported that 53 of 120 FBS schools
were caught violating NCAA rules between 2001 and 2010 (Lederman). The fact that over
44% of FBS schools that have been caught violating NCAA rules in a 10 year span, makes
one wonder how many other FBS schools do the same, yet simply haven’t been caught.
While these violates do not all involve player’s receiving “illegal” compensation, the
increasing number of schools committing NCAA violations is alarming and speaks to the
flawed system put in place by the NCAA years ago. In Tim Tebow’s book, Through My
Eyes, he discusses how he felt seeing his coach receive a million dollar bonus at a time when
the only Christmas present he could afford to give his mother was to pull weeds from her
chicken coup. Tebow, known for his “strong personal and moral convictions,” restrained
from accepting money from boosters and agents while in college, yet questions the morality
of the NCAA and their rules that they impose throughout his book (Huma & Staurowsky,
21). Reflecting a similar opinion regarding the NCAA restrictions, University of Southern
California receiver, R. Jay Soward, confirmed to Sports Illustrated a few years ago that he
had accepted benefits from a sports agent while in college, as his scholarship didn’t provide
enough money for rent or food (Huma & Staurowsky, 20). Through exposed
scandals/violations of NCAA rules and the expressed opinions of many current and former
16
college athletes, it has become clear that the evolution of the collegiate sports industry, in
combination with the stagnant NCAA restrictions, has created an environment in which
popular collegiate athletes can be easily manipulated by financial rewards and incentives that
violate NCAA restrictions.
Recommendations
Decision to Appeal
Following the decision of the O’Bannon case, the NCAA filed an appeal with the 9th
Circuit Court of Appeals. In the appeal the NCAA asserts that Judge Wilken erred by not
applying a 1984 Supreme Court ruling that the NCAA believes protects amateurism in
college sports (Solomon). The 72 page filing specifically focuses on what the NCAA
believes are three flaws in the decision:
“Wilken declined to follow the 1984 Oklahoma v. Board of Regents case that ended
the NCAA's monopoly on television broadcast. That Supreme Court ruling included
language that ‘athletes must not be paid’ and the NCAA argued other district courts
have upheld Board of Regents” (Solomon).
2. Antitrust laws don't apply to the challenged rules because they do not regulate
“commercial' activity.” Whatever economic consequences these rules may have, their
purpose is to define who is eligible to play the sports that NCAA member schools
sponsor (Solomon).
3. The O'Bannon Plaintiffs lack antitrust injury. While the players are seeking payments
for the rights to use their names, images and likenesses in live TV, archived footage
and video games, no state recognizes such a right in telecast of games and other
claimed non-commercial uses. Regardless, the First Amendment and the Copyright
Act would bar enforcement of any such right (Solomon).
1.
The overarching purpose of this proposal, however, is not only to show that the court was
correct in the initial decision, but to provide the NCAA with the proper perspective as to why
these changes are necessary and beneficial based on the current state of the industry and the
evolution of the roles played by those within it.
17
Through the examination of the collegiate sports industry it has become obvious that
many regulations enforced by the NCAA have actually undermined their purported mission
of preserving the idea of amateurism and the student-athlete. If addressed properly, the
injunction issued by Judge Wilken can help to align the NCAA’s vision and mission with the
way they treat their athletes and thus, I propose that the NCAA embrace the changes initiated
in the decision rather than appeal them. I will next provide two more specific
recommendations that I believe will help alleviate this dissonance and promote the coherence
of the NCAA’s mission with the imposition of fair compensation deserving of the studentathletes.
One-Year vs. Four-Year Scholarship Option
As mentioned previously, the four-year scholarship was changed to a one-year
renewable scholarship in 1973. This regulation undermined the NCAA’s idea of the
collegiate sports player being a student first and an athlete second. Things like poor athletic
performance and permanent injury are reasons a coach may choose not to renew an athlete’s
scholarship, yet NCAA institutions are free to renew scholarships of players that are
academically ineligible, highlighting the fact that athletic scholarships hinge primarily on
athletic performance rather than academic performance (Huma & Staurowsky, 7). The oneyear scholarship exerts a tremendous amount of pressure on student-athletes to remain
athletically competitive within their respective teams, which in turn causes them to spend
excessive amounts of time on sport-related activities. Giving FBS football and Division 1
basketball programs the option of offering four-year athletic scholarships will again promote
the NCAA’s dedication to the education of their athletes and can take pressure off the
player’s who already shoulder a burden that no other students share. Players wishing to leave
18
college before graduation to turn pro, or for other reasons, will still be permitted to do so
under a four-year athletic scholarship. This decision will further promote competition within
NCAA member schools, since recruits would then have the benefit of obtaining educational
security from the schools offering four-year athletic scholarships. While some may argue that
this change will promote laziness and a lack of determination amongst some athletes, I
submit that this is not the case. By providing a student-athlete with educational security, he
will focus more on improving his athletic abilities rather than on how many hours he is
putting in just to ensure his continued scholarship. With this four-year scholarship option, the
NCAA will still have the ability to end the scholarship early provided that certain conditions
were not met. With a tribunal process, the NCAA would have the ability to bring a studentathletes case before a board/panel to discuss the issue at hand and a decision would be made
as to whether or not that student deserves the right to retain their scholarship and/or roster
spot.
Scholarship Requirement
The injunction states that the NCAA will be not be allowed to prohibit member
schools and conferences from offering recruits a limited share of revenues generated from the
use of their names, images and likenesses in addition to a full grant-in-aid and also states that
the NCAA will not be permitted to set this cap below the cost of attendance (Edward
O’Bannon v. NCAA, 96). I propose, however, that the NCAA take the ruling a step further
and require all athletic scholarships to fully cover the cost of attendance. As explained
previously, FBS football players and Division 1 basketball players spend incredible amounts
of time on sport-related activities while in season. In fact, student-athletes in both sports
spend approximately double the amount of time on sports-related activities than the NCAA
19
allows. As seen in Figure 3, only one country examined in a United Nations study (Mexico),
had a higher average work hours per week (43.5 hours/week) than the time FBS football
players report spending on sports-related activities while in season (43.4 hours/week).
Additionally, student-athletes must also dedicate a significant amount of time to their
education. These extreme time commitments severely limit the ability of student-athletes to
obtain a means of generating income, as non-athletes can, such as working an off-campus
job. An analysis of the out of pocket expenses that the average FBS “full” scholarship athlete
faces revealed an average yearly shortfall of $3,222 between full “grant-in-aid” scholarships
and the overall cost of attendance (Huma & Staurowsky, 4). The average scholarship
shortfall per student-athlete in some of the largest FBS football programs can be seen in
Figure 4. It only seems right that the laborers who generate millions of dollars for the NCAA
and its member schools are entitled to scholarships that cover the costs of basic school needs,
as determined by institutional financial aid offices. This change will help alleviate the
persistence of the “black market” present in the college athletics industry, thus reducing the
number of NCAA regulations violated by student-athletes and NCAA members schools.
Conclusion
The truth is, the NCAA has become part of Corporate America. It is no longer simply
the educational association it purports to be (McCormick & McCormick). For the longest
time the NCAA has used the veil of amateurism as a way to act monopolistically and take
advantage of the very athletes that generate their revenue. While the O’Bannon case, in its
groundbreaking decision, has clearly changed the face of college athletics moving into the
future, it is now up to the NCAA to catch up with the modernization of college sports,
20
embrace the necessary changes and make a positive impact on the collegiate sports industry
as a whole.
21
Figures, Data, Tables
Figure 1: Recent FBS Revenue Growth
Lavigne, Paula. "How Much Colleges Made and Spent on Sports in 2012-2013."ESPN.
ESPN Internet Ventures, 1 May 2014. Web. 18 Dec. 2014.
Figure 2: Revenue Breakdown for FBS Schools
Lavigne, Paula. "How Much Colleges Made and Spent on Sports in 2012-2013."ESPN.
ESPN Internet Ventures, 1 May 2014. Web. 18 Dec. 2014.
22
Figure 3: Average Global Working Week by Country (United Nations Study)
Wesley, Daniel. "The State of the 40-Hour Workweek." VIsual Economics CreditLoan.
N.p., n.d. Web. 17 Dec. 2014.
Figure 4: Scholarship Shortfall Per FBS School Student-Athlete
Huma, Ramogi, and Ellen J. Staurowsky. "The Price of Poverty In Big Time College
Sport." (n.d.): n. pag. National College Players Association. National College
Players Association, 2012. Web. 16 Dec. 2014.
23
Works Cited
"Antitrust." Cornell University Law School. Legal Information Institute, n.d. Web. 14 Dec.
2014.
Barro, Robert J. "The Best Little Monopoly in America." Businessweek. N.p., 08 Dec. 2002.
Web. 16 Dec. 2014.
Edward O'Bannon, et al. v. National Collegiate Athletic Association; Electronic Arts Inc.;
and Collegiate Licensing Company. United States District Court for the Northern
District of California. 8 Aug. 2014. Print.
ESPN.com News Services. "Judge Rules Against NCAA." ESPN. ESPN Internet Ventures,
09 Aug. 2014. Web. 15 Dec. 2014.
Huma, R., & Staurowsky, E. J. (2012). The $6 billion heist: Robbing
College Athletes Under the Guise of Amateurism.
Huma, Ramogi, and Ellen J. Staurowsky. "The Price of Poverty In Big Time College Sport."
(n.d.): n. pag. National College Players Association. National College Players
Association, 2012. Web. 16 Dec. 2014.
Lederman, D. (2011, February 7). News: Bad apples or more? Inside Higher Education.
McCormick, A.C., & McCormick, R. A. (2008, May-June). The Emperor’s New Clothes:
Lifting the veil of amateurism. San Diego Law Review 45, 495
McDuling, John. "A Guide to American College Football, the Multibillion-dollar Business
Where the Labor Is Free." Quartz. N.p., 13 Sept. 2014. Web. 15 Dec. 2014.
"Monopoly Definition | Investopedia." Investopedia. N.p., 24 Nov. 2003. Web. 14 Dec. 2014.
NCAA Academic and Membership Affairs Staff. "NCAA Division 1 Manual." (2014): 1398.NCAA Publications. NCAA, Oct. 2014. Web. 16 Dec. 2014.
Sack, A. L., & Staurowsky, E. J. (1998). College athletes for hire: The evolution and
legacy of the NCAA amateur myth. Westport, CT: Praeger Press.
"Sherman Anti-Trust Act (1890)." Our Documents. General Records of the United States
Government, n.d. Web. 13 Dec. 2014.
Solomon, Jon. "NCAA Relies Heavily on Supreme Court Case to Appeal Paying
Players." CBSSports. CBSSports, 15 Nov. 2014. Web. 17 Dec. 2014.
Tebow, T. (2011). Through my eyes. New York: Harper.
24
"Transcript of Sherman Anti-Trust Act (1890)." Our Documents. General Records of the
United States Government, n.d. Web. 15 Dec. 2014.