It's Time to Break Up the College Football Monopoly

I’ve had real philosophical and moral issues with college football for quite some time. I stopped attending games a decade or so ago and have probably watched a total of 30 hours of games since then. My objections are around treatment of labor, the monopoly power of the colleges and their organizations, the huge tax subsidies for what are essentially profit-making businesses, the cynical exploitation of loyalty to home and college, and the potential for lifelong (and life-shortening) damage to promising young men who are disproportionately Black and low-income.

There are good aspects of college football, too, of course. It’s entertaining, connects people with their colleges and fellow alums in ways that academics can’t, builds support for public colleges among taxpayers, and offers a path to prosperity for players, albeit a tiny sliver of all who participate.

I won’t bore you (too much? I hope?) with the progression of my analysis and prescriptions for reform, other to say that I started this to argue for an end to college football (knowing there’s no chance of that in my lifetime) and settled on relatively modest reforms that can keep the good and reduce the bad impacts. This will start with a look at the economics of college football, dive into how much money it makes and spends (and, more importantly, doesn’t spend), and ends with some reforms that give more opportunity and protection to players, makes those who benefit from college football pay a fair share of the costs, and preserves what’s good about the industry.

College Football is a Cartel with Monopoly Power

College football isn’t a corporation; it’s more like the textbook definition of a cartel. There are over 130 colleges hosting teams in Division 1 Football Bowl Subdivision (FBS, the largest and best-known programs). However, they are far from independent; they operate under the supervision of the National College Athletics Association, or NCAA. The NCAA makes the rules, decides who can field teams, and oversees the money and the behavior of players, coaches, and institutions. The NCAA has near monopoly power over amateur football beyond the high school level. There’s another college sports association, the National Association of Intercollegiate Athletics (NAIA), but it comprises small colleges and trumpets its lower costs in recruiting schools. It targets private colleges and regional state schools, not Notre Dame and Alabama.

The NCAA takes its monopoly power seriously and works hard to protect it. It asks Congress to exempt it from antitrust laws, so it can control television rights, athlete compensation, and nearly every aspect of football and other sports. It fought laws that would allow athletes to earn income from their name, image, and likeness (NIL). The NCAA isn't always successful, though. In 1984 it lost control of television rights to all college athletics when the Supreme Court ruled that power violated federal antitrust law. In 2015 the Court overturned the NCAA’s ban on players receiving compensation for NIL, ruling that it violated the same law. While the NCAA fights NIL laws in Congress, many states have passed their own laws allowing NIL compensation.

College Football is a Profit-Making Industry

Major college football makes big money, and it all starts with TV revenues, which have grown dramatically in the last couple of decades and will just keep doing so. Within the NCAA, schools create conferences, which organize competitions and collect and divide money from a number of sources. Television networks contract with conferences; recent deals in the Big 12 and Big 10 conferences are netting $30-100 million per school per year, before counting playoff revenue.

While football programs need to share TV revenue, they can increase their own revenue by selling tickets and an ever-expanding inventory of hats, shirts, foam hands, and on and on. They also negotiate contracts with shoe and clothing companies, which can exceed $10 million a year in cash and clothing. All that money adds right up! Updated data shows that a number of major programs make over $100 million a year from all sources, and all programs average $30 million a year.

So where’s all the money going? Costs of running a major program have grown, too, from an average of $8 million in 2003 to $22 million in 2018. In 2018 costs ran as high as $60 million at Alabama. Just like in major corporations, a lot goes to chief executive pay. In 2020-21 the average major college head football coach made $2.1 million. Alabama's Nick Saban is pulling down $11 million a year.

It’s well known that college sports programs don’t pay their players, but we often overlook the other ways they hang on to profits. College football programs aren’t paying for facilities, nor are they paying to use the brand names of the colleges that created and host the programs. Most football programs contribute some profits to subsidize the cost of other athletic programs, but that’s likely a small amount compared to the free use of stadia, practice facilities, thousands of parking spaces, and the opportunity to call your collection of highly-rated high school players from around the country the “University of” Alabama football program. Football programs also don’t pay taxes, since they are affiliated with state universities or non-profits. That means they are making no contributions to local governments who provide millions each year in public safety staffing for games, not to mention years of developing players in high school.

Players have suffered under the NCAA’s Monopoly Power…

College athletes don’t get paid. Colleges do provide scholarships, at an average cost of $36,070 in FBS. These include food (a lot!), a place to live, facilities and coaches, and access to an education the football player might or might not want (In fairness, I’m impressed by graduation rates for football players, especially Black ones.) A program with average revenue of $30 million would use about 10 percent of that to pay for its maximum allowed scholarships (85).

It isn’t just compensation where football players are disadvantaged. They don’t have any say in governance at their college or in the NCAA. They haven’t yet been able to form unions, though they are making legal progress. They also have no recourse for potentially life-changing and life-shortening injuries they sustain playing football (without pay). While many other college sports have significant injury rates, football is responsible for the most serious injuries, like those requiring emergency transport and/or surgery. Injuries often have negative lifelong impacts. A recent study of former Notre Dame players found they were more likely than non-players to be cognitively impaired, have and have heart disease, and to die from brain and other nervous system cancers. Five of the University of Southern California’s 12 linebackers who played in 1989 died before they turned 50. Media attention and public concern often focus on chronic traumatic encephalopathy (CTE), which can’t be either diagnosed or treated while the player is alive. While CTE is often associated with professional football, a 2018 study found players from over 100 different college programs had CTE. While they’re playing football, players have great doctors and trainers and their health is closely monitored. For anything that happens after they leave school, they’re on their own.

…but the Tide May be Turning

Players are getting more control over their lives, however. Until recently, football programs held players to noncompete clauses. If they wanted to transfer to another program, they had to sit out a year. Starting in 2018 the NCAA Transfer Portal allows athletes (in all sports, not just football) to make their availability known to all other programs. In 2021, the NCAA ended the requirement to sit out a year before playing for the new program. Purists hate it, but the portal gives players a chance to find a program with a more compatible coach, better players, and a better shot at some NIL income and perhaps the NFL.

Name, Image, and Likeness is another big plus for the labor force of college football. Others, including football programs, colleges themselves, television networks and game makers, have profited from athletes’ NIL for decades. Now the players can do so themselves. There are down sides, like opening the door to corruption. The NCAA did exactly that by preventing schools from paying for NIL directly. Now fans of colleges will compete with each other to lure players to their school with the best NIL deal. Professional sports agents are figuring ways to get in on the action as well. There’s also a huge potential for gender and racial discrimination in NIL, though one small early study shows women basketball stars received more compensation on average than their male counterparts. Regardless of any issues with corruption and inequality though, many players will be better off with NIL than they were without.

Take on the Monopoly…

College football has value for colleges, students, and players. But the lack of competition hurts players and keeps colleges from having real control over their football programs. It also costs taxpayers a bundle. I don’t know if college football will last forever, but it can be improved in the short run by providing competition for the NCAA cartel and fixing what the organization and its members won’t tackle on their own.

Football needs a professional minor league. Every major sport except football gives players a paid alternative to college right out of high school. You can even go straight to the major leagues at age 18, except in basketball, and that may change soon. It’s even more important to have this option in football, since the window for earning is so short. The average National Football League (NFL) professional career lasts just over three years. If they spend four or five years in college football, players are spending more than half their career without getting paid.

The NFL makes $17 billion a year, but it manages to avoid paying for player development. It can afford to support minor leagues and will benefit from the greater control it gets over building player skills once they graduate from high school, as well as a chance to develop and evaluate coaches and other staff in low-pressure environments. The NFL draft, which now just taps graduating college players, can operate like the baseball and hockey drafts, which mix high school graduates and college players. With one or more professional minor leagues, players will get paid, be able to make their own financial choices, and build relationships with their professional teams and teammates. Given short careers, the NFL should make minor leaguers eligible for its retirement program as well.

…and the NCAA needs work

Where would a professional minor league leave college football? Probably better off for a while, because a for-profit professional competitor would reduce the pressure to pay players and give it time to manage NIL rights and maybe even make the game safer. It can continue to market and lobby on the basis that their workers really are "student-athletes." Sure, college programs would face competition for players, but things may not change that much. There are about 1,700 players in the NFL; assuming a minor league grows to that many in a few years, it’s still less than a quarter of the number of players in FBS, much less other NCAA and NAIA divisions. Some of the players the NCAA loses, whether right out of high school or part way through college, will be among the best, but others will just want to make a living and have a shot at the NFL earlier, or maybe had no interest in college in the first place.

It’s way too much to ask for, but athletic directors, coaches, and the NCAA bureaucracy aren’t listening to me anyway, so here’s what I think the NCAA must do once there is reasonable competition from the professionals:

• Provide players at all levels with lifetime disability insurance. Players should be compensated for risking future earnings, health, and even years of life by playing college football. This is a risk that should be compensated, and it’s an easily insurable one. The NFL is making progress in compensating players for long-term damage and the NCAA can learn from that.

• Share revenues with the colleges and communities that subsidize their operations. This could be negotiated between schools and football programs, but really requires a coordinated approach. The NCAA should establish a share of gross revenues (5 percent perhaps) to be paid annually to the college the program is affiliated with and the community where it plays. Payments should be transparent, direct, and auditable. In the event the NCAA can’t pull this off, Congress and/or the Internal Revenue Service should remove the nonprofit status of college football programs so they’ll be subject to federal, state, and local taxes.

• Clean up the NIL market before it gets really ugly, by allowing football programs to pay NIL directly and encouraging (or mandating) team-based NIL deals and revenue sharing within programs.

• Find a way to pay players, whether in the form of wages, deferred compensation, or adding a cash living allowance to scholarships.

College Football Has its Place, but it Needs to Earn it

College football is fun and as a result it's hugely popular. For the vast majority of players, it will be the last organized football they ever play. For those with the talent and good luck to make it professionally, college will be half their career, but they won't get paid for it. They need to be given an option. Every other sport provides professional, paid alternatives to college sports, and football must do the same. Once it does, college football can support players by improving health and safety and providing reasonable income opportunities, and it can support colleges and communities by sharing a reasonable part of its billions in revenue.