The NCAA Cartel and Antitrust Policy
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The National Collegiate Athletic Association (NCAA) was originally founded to protect student athletes from the brutality of college football. The NCAA has established a number of prominent athletic programs and achieved huge commercial success. In spite of this success, the NCAA has limited the compensation of student-athletes through collusive monopsonistic restraints. Ordinarily, these restraints would be vulnerable to antitrust attack, but the NCAA has enjoyed benign neglect by the U.S. Department of Justice and the Federal Trade Commission. The root of this is the Board of Regents [National Collegiate Athletic Association v. Board of Regents of the University of Oklahoma, 468 U.S. 85 (1984)] decision, which requires rule-of-reason treatment of the NCAA’s restraints. The essential role of amateurism of student athletes is used to justify the NCAA’s cartel behavior. In this paper, we demonstrate that amateurism is a myth. We suggest that the NCAA will be unable to provide an evidentiary foundation for its claim that amateurism is crucial to the success of college athletic programs. In addition, we reject the possibility of an efficiency defense for the NCAA’s cartel behavior.
KeywordsSports economics Antitrust
JEL ClassificationZ2 L4
We are grateful for some useful advice provided by Debbie Garvin; and Jill Harris. Brad Humphreys, Jane Ruseski, Larry White, and other participants at the NCAA Cartel Symposium provided constructive comments that improved our exposition. We thank Bailey Fell, Jonathan Hulzebos, and Jeon Shim for research assistance.
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