Antitrust Anachronism: The Interracial Wealth Transfer in Collegiate Athletics Under the Consumer Welfare Standard

Ted Tatos

Under an illusory nexus to education, intercollegiate athletics in the United States represents a multibillion-dollar enterprise that extracts economic rents from the majority Black athlete labor to the benefit of overwhelmingly White constituencies. Under the aegis of "amateurism," member universities of the National College Athletic Association (NCAA) collude to fix maximum athlete compensation at cost-of-attendance and strip athletes of the economic rights over their own name, image, or likeness. While this anticompetitive restraint encumbers all athletes competing under the NCAA umbrella, it imposes a disparate impact on Black and other minority athletes who represent a majority of the labor in the largest revenue sports: football and basketball. Although White coaches are the most visible beneficiaries of this anticompetitive restraint, the scope of amateurism's interracial distributional effects has largely remained uncovered. This article seeks to fill this gap in the literature. Leveraging data from multiple sources, including institutional financial reports and the NCAA Demographics Database from 2007-2020, this article quantifies the NCAA's wealth transfer away from primarily Black athlete labor to institutions and overwhelmingly White constituencies. Under the NCAA' restraint, we estimate that Black football and men's and women's basketball athletes at the

Article Antitrust Anachronism: The Interracial Wealth Transfer in Collegiate Athletics Under the Consumer Welfare Standard The Antitrust Bulletin 1–35 ª The Author(s) 2021 Article reuse guidelines: sagepub.com/journals-permissions DOI: 10.1177/0003603X211029481 journals.sagepub.com/home/abx Ted Tatos* and Hal Singer** Abstract Under an illusory nexus to education, intercollegiate athletics in the United States represents a multibillion-dollar enterprise that extracts economic rents from the majority Black athlete labor to the benefit of overwhelmingly White constituencies. Under the aegis of “amateurism,” member universities of the National College Athletic Association (NCAA) collude to fix maximum athlete compensation at cost-of-attendance and strip athletes of the economic rights over their own name, image, or likeness. While this anticompetitive restraint encumbers all athletes competing under the NCAA umbrella, it imposes a disparate impact on Black and other minority athletes who represent a majority of the labor in the largest revenue sports: football and basketball. Although White coaches are the most visible beneficiaries of this anticompetitive restraint, the scope of amateurism’s interracial distributional effects has largely remained uncovered. This article seeks to fill this gap in the literature. Leveraging data from multiple sources, including institutional financial reports and the NCAA Demographics Database from 2007–2020, this article quantifies the NCAA’s wealth transfer away from primarily Black athlete labor to institutions and overwhelmingly White constituencies. Under the NCAA’ restraint, we estimate that Black football and men’s and women’s basketball athletes at the Division I Power 5 Conference level have lost approximately $17 billion to $21 billion in compensation from 2005 to 2019 or roughly $1.2–$1.4 billion per year. The antitrust status quo’s failure to enjoin the NCAA’s collusive wage-fixing restraint, which causes such obvious antitrust injury and harm to athlete labor, underscores the fundamental shortcomings of using the consumer-welfare standard as the exclusive lodestar to investigate and enjoin anticompetitive conduct; it also exposes the divergence between “amateurism” as described in Board of Regents and the modern-day realities of college athletics. Keywords antitrust, race, amateurism, cross-market, NCAA, demographics, college athletics, consumer welfare standard * EconONE Research ** Georgetown’s McDonough School of Business, Washington, DC Corresponding Author: Ted Tatos, Orlando, FL. Email: ttatos@eaecon.com 2 The Antitrust Bulletin XX(X) I. Introduction At the highest levels, the status quo in college athletics reflects the anodyne repackaging of the economic conditions that many Black Americans faced prior to the U.S. Civil War. Certainly, we are not the first to note the similarities between National College Athletic Association (NCAA) amateurism and the plantation economy that characterized the antebellum South. Nor are we the first to observe that overwhelmingly White coaches and administrators benefit from multimillion dollar contracts, while the majority Black athletes in high-revenue sports must forego even the basic rights over their own names and likenesses. Billy Hawkins’s The New Plantation, published over a decade ago, detailed the status of Black athletes in predominantly White academic institutions as wealth generators for the White minority, while receiving little beyond scraps for their labor.1 Since Hawkins’s book and Pulitzer Prize winner and civil rights historian Taylor Branch’s description of the “unmistakable whiff of the plantation”2 that characterizes the exploitation of U.S. college athletes, the odor has grown into a stench. Investigative journalist Patrick Hruby’s article, Four Years A Student-Athlete: The Racial Injustice of Big-Time College Sports, detailed the disparate impact that the NCAA’s restraint inflicts on the Black athletes.3 More recently, professors Nathan Kalman-Lamb, Johanna Mellis, and Derek Silva addressed the obvious racial dynamics and negative effect on minority athletes, who again drew the inescapable analogy to a Southern plantation.4 Such comments are particularly poignant in light of NCAA member institutions’ use of majority Black athlete labor as de facto essential employees to “run money”5 through their respective states during the recent COVID-19 pandemic. Athletes and their families have been well aware of the plantation dynamics that characterize highrevenue college sports. Former University of North Carolina (UNC) at Chapel Hill basketball player Rashad McCants recounted his time during the school’s academic fraud scandal that nearly cost the university its accreditation in the book Plantation Education. Kylia Carter, the mother of Duke basketball standout Wendell Carter and herself a former NCAA Division I (D-I) college athlete, described the NCAA’s amateurism model as a system in which . . . the laborers are the only people that are not being compensated for the work that they do while those in charge receive mighty compensations . . . The only two systems where I’ve known that to be in place are slavery and the prison system. And now I see the NCAA as overseers of a system that is identical to that.6 More recently, Creighton basketball coach Doug McDermott’s exhorting his team that “I need everybody to stay on the plantation . . . I can’t have anybody leave the plantation” garnered widespread 1. B. HAWKINS, THE NEW PLANTATION - BLACK ATHLETES, COLLEGE SPORTS, AND PREDOMINANTLY WHITE NCAA INSTITUTIONS (Palgrave Macmillan 2010). 2. Taylor Branch, The Shame of College Sports, THE ATLANTIC, Oct. 2011, https://www.theatlantic.com/magazine/archive/ 2011/10/the-shame-of-college-sports/308643/. 3. Patrick Hruby, Four Years A Student-Athlete: The Racial Injustice of Big-Time College Sports, VICE, Apr. 6, 2016, https:// www.vice.com/en/article/ezexjp/four-years-a-student-athlete-the-racial-injustice-of-big-time-college-sports. 4. Nathan Kalman-Lamb et al., I Signed My Life to Rich White Guys: Athletes on the Racial Dynamics of College Sports, THE GUARDIAN, Mar. 17, 2021, https://www.theguardian.com/sport/2021/mar/17/college-sports-racial-dynamics. 5. Pat Forde, Mike Gundy’s Pandemic Plan Is Ridiculous, SPORTS ILLUSTRATED, Apr. 7, 2020, https://www.si.com/ college/2020/04/08/mike-gundy-coronavirus-economy-comments-dangerous. The article refers to Oklahoma State football coach Mike Gundy laying bare the revenue-maximization goal that drives NCAA members by commenting, “In my opinion, if we have to bring our players back, test them. They’re all in good shape. They’re all 18, 19, 20, 21 and 22-year-olds. They’re healthy. A lot of them can fight it off with their natural body, the antibodies and the build that they have. There’s some people that are asymptomatic. If that’s true, then we sequester them. And people say that’s crazy. No, it’s not crazy because we need to continue and budget and run money through the state of Oklahoma.” 6. Khadrice Rollins, Wendell Carter’s Mom Kylia Compares NCAA System of Compensation to Slavery and Prison, SPORTS ILLUSTRATED, May 7, 2018, https://www.si.com/college/2018/05/08/wendell-carters-mom-kylia-carter-compares-ncaacompensation-slavery-prison. Tatos and Singer 3 condemnation.7 Yet the NCAA plantation remains very much intact, even as it faces another challenge to its restraint, albeit a limited one, in the Alston v. NCAA case. In defense of its hegemony over college athletics, the NCAA’s amateurism model benefits from a cabal of acolytes, comprised of coaches, athletic administrators, sports writers, commentators, and reporters who profit from and thus routinely offer glowingly self-serving assessments of the status quo. The NCAA has also availed itself of various opportunities, including the annual basketball “March Madness” tournament to publish its own propaganda. Its “A Day in the Life of Student-Athlete” commercial that aired during the 2019 NCAA tournament received widespread derision from former college athletes, who commented that their own experiences bore no resemblance to the Potemkin village that the NCAA portrayed to sports audiences.8 While the NCAA’s own surveys indicate that college athletes often dedicate well in excess of forty hours per week to their sport,9 leaving little time for academics, and universities themselves acknowledge the conflict between high-revenue sports and their educational mission, the NCAA continues to hide behind the facade of education to justify its anticompetitive restraint on labor. Indeed, even after the longstanding10 academic fraud scandal at UNC, the NCAA refused to implement regulations that would prevent its recurrence.11 Neither should it escape attention that UNC chose the Afro and African-American Studies Department in which to deliver the fraudulent “paper courses” that ensured athlete eligibility and thus continued financial benefits to the school. Yet the NCAA and its defenders perpetuate the myth that the substandard education many athletes receive represents a consumer benefit that justifies the restraint on their ability to monetize their labor and their very identities. The treatment of labor may have ostensibly improved from the days of the plantation economy (though abuse and mistreatment of athletes continues to occur with disturbing frequency).12 As we explain herein, however, the progress has been largely superficial and designed to mask a professional industry that methodically arrogates value from the majority Black labor, and funnels said value to institutions, administrators, coaches, and various other, predominantly White constituencies. The plantation has morphed into a more visually palatable form, as attested by eight of the ten largest sports stadiums on the planet belonging to American college football programs.13 Yet highly compensated White coaches and administrators in collegiate sports unduly benefit from the marginal revenue product (MRP) of predominantly Black college athletes.14 When assessing a restraint limiting payments to assistant collegiate basketball coaches over two decades ago, the antitrust system deemed 7. Jerry Brewer, The Difference between a Plantation and College Sports: A Plantation didn’t Pretend, WASHINGTON POST, Mar. 11, 2021, https://www.washingtonpost.com/sports/2021/03/11/greg-mcdermott-plantation-ncaa-basketball/. 8. Andrew Joseph, Former College Athletes Destroyed the NCAA’s ‘a Day in the Life’ Commercial, USA TODAY, Mar. 19, 2019, https://ftw.usatoday.com/2019/03/ncaa-day-in-the-life-ad-reaction-athletes-college-twitter. 9. NCAA, NCAA GOALS Study of the Student-Athlete Experience, Initial Summary of Findings, Jan. 2016 (“FBS football players continue to report the highest weekly in-season time commitments (median¼42 hours/week, up from 39 hours/week in 2010). FCS football and Division I baseball also reported 40 hours/week or more.”) https://www.ncaa.org/sites/default/ files/GOALS_2015_summary_jan2016_final_20160627.pdf. 10. University of North Carolina at Chapel Hill, Response to the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC) Letter of Nov. 13, 2014 (Jan. 12, 2015). 11. Jeremy Bauer-Wolf, Keeping the Status Quo, INSIDE HIGHER ED, Sept. 5, 2019, https://www.insidehighered.com/news/ 2019/09/05/ncaa-does-not-move-forward-new-academic-reform-rules. 12. Ted Tatos. Abuse and Mistreatment of Athletes at US Universities: Legal Implications for Institutional Duty-to-Protect, TEXAS REVIEW OF ENTERTAINMENT & SPORTS LAW (Summer/Fall 2020). 13. Robert J. Wood, List of the World’s Largest Sports Stadiums, TOP END SPORTS, May 2021. https://www.topendsports. com/world/lists/stadiums-largest.htm. 14. As of the writing of this article, only thirteen of the 130 Football Bowl Subdivision coaches are Black. Ivan Maisel, The Lack of Black College Football Coaches is Still Glaring, and so are the Excuses behind It, ESPN, Dec. 3, 2020, https://www.espn. com/college-football/story/_/id/30435797/the-lack-black-college-football-coaches-glaring-the-excuses-it. In 2020, 119 football coaches for whom pay levels were reported received a total of $321.8 million in compensation. Black coach compensation represented 11.6% if this total. See NCAA Salaries, USA TODAY, https://sports.usatoday.com/ncaa/salaries/. 4 The Antitrust Bulletin XX(X) that restriction to violate Section 1 of the Sherman Antitrust Act. In Law v. NCAA, the Tenth Circuit affirmed the district court’s decision and issued a permanent injunction restraining the NCAA from “promulgating this or any other rules embodying similar compensation restrictions.”15 At the recent Alston v. NCAA Supreme Court hearing, NCAA defense attorney Seth Waxman attributed the rise in coaching salaries generally to this decision but ignored that the Law v. NCAA decision affected only a small number of assistant basketball coaches. The income disparity between athletes and coaches that amateurism enables only captures a fraction of the degree to which Black labor powers the economic engine of the collegiate sports industry, which yields economic gain captured by predominantly White constituencies. To document the degree to which such constituencies profit from Black labor and to estimate the interracial transfer of wealth that the NCAA’s amateurism model has enabled, we leverage public sources of information, including the Equity in Athletics Disclosure Act (EADA) Database, the Knight Commission College Athletics Finances database (which relies in part on the NCAA Member Financial Reporting Services or MFRS database), the NCAA Demographics Database from 2007 to 2020, and National Basketball Association (NBA) compensation and race data. We also acknowledge earlier work by Huma, Staurowsky, and Montgomery (2020), whose research addressed the wealth transfer to White coaches and administrators over the four-year period from 2017 to 2020.16 As we document herein, even though such a transfer to coaches and administrators is economically significant, it understates the degree to which primarily White constituencies in both athletic and academic areas at institutions of higher education benefit from athlete labor. This article proceeds as follows. In Part I, we seek to estimate the percentage of NCAA revenues that would have otherwise gone to Black athletes absent the NCAA’s collusive restraint on athlete compensation. We begin by analyzing the racial demographics at the NCAA D-I level, focusing particularly on the dominant Power 5 conferences (the Atlantic Coast Conference [ACC], the Big Ten Conference [B1G], the Big Twelve Conference [Big 12], the Pacific Twelve Conference [PAC12], and the Southeastern Conference [SEC]). We generate a racial breakdown across the full spectrum of college-athletic-department employees covered in the NCAA demographics database. We compare this information to racial demographics of college athletes by sport, again, focusing particularly on the highest revenue sports of football and basketball. We then leverage college-athletics financial data, which provide separate figures for coaching staff versus other employees to estimate the percentage of revenues, generated by majority Black athletes, which accrue to majority White constituencies. Finally, using racial and salary data for the NBA, we estimate the percentage of college basketball and football revenues, or “pay shares,” that would have otherwise gone to all athletes and then to Black athletes in particular, absent the NCAA’s collusive restraint on athlete compensation. In Part II, we discuss the antitrust roots of the current status quo and how interpretation of the consumer-welfare standard’s focus on output and price has enabled the current racial exploitation in college athletics. We briefly review precedent in Board of Regents that has provided the key pillar of support for the NCAA amateurism model. We discuss the consumer-welfare standard’s unfortunate role in rendering predominantly Black athletic worker welfare subordinate to overwhelmingly White consumer interests, even when such interests are either unclear or nonexistent. We then explain why the status of intercollegiate athletics that the Stevens Court described in its seminal opinion no longer applies and why NCAA amateurism has abdicated any plausible ties to education while fully embracing its commercial identity. The fact that the consumer-welfare standard has failed to unwind the 15. Law v. National Collegiate Athletic Ass’n, 134 F.3d 1010 (10th Cir. 1998). 16. Ramogi Huma, Ellen Staurowsky, and Lucy Montgomery. How the NCAA’s empire robs predominantly Black athletes of billions in generational wealth. Riverside, National College Players Association, 2020, https://drive.google.com/file/d/ 1z97vhcjErrHIvuO3Nu2wUWbG90bFKnm_/view. Tatos and Singer 5 NCAA cartel’s restraint, which causes obvious and direct anticompetitive effects, underscores its fundamental inflexibility and ineffectiveness at policing antitrust injury. We urge the application of a broader set of policy tools, including ensuring coordination rights among college athletes, to address the deficiencies created by the antitrust status quo. II. Quantifying the Racial Exploitation in College Athletics In this section, we analyze the economic chasm that exists between the predominantly Black athlete labor who generates the revenues in college athletics and the majority White constituencies who profit from them. College football and basketball coaches commonly top the lists of highest paid public employees in their respective states. Entertainment and Sports Programming Network’s (ESPN) 2017 analysis of coach salaries found that thirty-nine such coaches (eight basketball and thirty-one football) topped their state’s list, with only four black coaches among them.17 Yet the focus on coach compensation understates the wealth extraction from Black labor that college athletics perpetuates, much in the same manner as the visible portion of an iceberg obscures the behemoth that lies below the water. To illuminate this interracial transfer of wealth, we leverage several data sources, each of which we detail in Appendix A. Even though various other sources of college athletics data exist, we focused on these principal data sets because they inform the beneficiaries of economic rents from athlete labor. Astronomic college coach salaries populate the sports pages, yet the amount university athletic departments spend on additional athletic staff, including sports information directors, equipment and facility managers, ticket managers, and other positions, has received far less scrutiny, despite the fact that the amount that NCAA members spend on such support staff often exceeds that spent on coaching staff. In every year over the 2005–2019 period covered by the College Athletics Financial Information (CAFI) database, athletic administrative staff expenditures at public institutions that comprise the Power-5 (P5) Conferences18 exceeded coach compensation and athlete aid. As shown in Figure 1, over this same period, coach compensation and support and administrative compensation at P5 public universities exceeded aid to athletes by 46% and 52%, respectively (in constant 2020 dollars). More concerning, each of these compensation sectors has grown faster in constant dollars than the amount of athlete compensation over this period, with the compound annual growth rate (CAGR) of coach compensation exceeding athlete aid by 6.4%–4.4%. Thus, not only does a persistent gap exist between athlete aid and coach/administrative compensation, but it is widening. Of course, athletes outnumber both coaches and administrative staff, further exacerbating the differences in benefits accrued by each constituency. Moreover, these data do not take into account additional benefits that coaches receive from third parties, including financial windfall from sports camps, television and radio appearances, and advertising, all of which the NCAA’s restraint on athlete compensation prohibits. It should be patently obvious at this point that referring to the athletes whose labor enables this economic system to exist as “amateurs” represents a gross fallacy. The magnitude and thus the economic relevance of institutional expenditures on coaches and athletic-support personnel stand in sharp contrast to the claimed financial woes that have prompted universities to limit professor salaries and institute other austerity measures. The inevitable question then arises as to how such institutions source the revenues to pay these exorbitant sums associated with athletic activities that are ancillary, if not outright antithetical, to the 17. ESPN, Who’s the Highest-Paid Person in Your State, Mar. 20, 2018, http://www.espn.com/espn/feature/story/_/id/ 22454170/highest-paid-state-employees-include-ncaa-coaches-nick-saban-john-calipari-dabo-swinney-bill-self-bobhuggins. 18. Private institutions are not required to make public the data submitted to the NCAA Member Financial Reporting Service. As a result, the College Athletics Financial Information data are limited to public institutions. The number of such institutions ranges from forty-seven to the current fifty-two as of the last year in our data. 6 The Antitrust Bulletin XX(X) Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total CAGR19 (above inflation) Coach Compensation $497,066,304 $532,334,867 $565,889,614 $594,241,753 $650,357,900 $702,028,047 $737,938,441 $784,899,173 $845,639,853 $890,803,463 $1,003,867,856 $1,054,685,492 $1,098,542,888 $1,184,918,536 $1,243,126,354 Support and Admin Compensation w/ Severance $557,844,397 $564,580,323 $613,422,119 $654,781,562 $718,958,220 $715,701,923 $749,758,560 $796,763,720 $880,629,637 $905,838,808 $1,012,719,043 $1,067,585,831 $1,137,572,332 $1,273,672,864 $1,245,282,332 Athletic Student Aid $402,476,285 $411,161,840 $429,348,824 $439,077,668 $472,361,938 $500,455,454 $515,877,478 $538,154,708 $570,580,029 $593,764,666 $646,392,151 $711,596,705 $733,127,407 $739,927,644 $752,225,237 $12,386,340,543 $12,895,111,671 $8,456,528,034 6.4% 6.1% 4.4% Figure 1. Growth in compensation at public Power-5 universities (inflation adjusted, 2020 dollars). Source: Knight Commission College Athletics Financial Information Database. academic mission of the university. While many sports add to the athletic department’s coffers and promote the institution’s brand, two stand out in popularity and revenues: football and basketball. Football revenues approach or eclipse basketball revenues even at institutions known more for their athletic prowess in basketball than football.19 Football revenues alone covered 90% of the team expenses across all sports among P5 programs from 2003 to 2018. Together, football and basketball revenues exceeded all athletic team expenses by nearly six billion dollars over the same period. Figure 2 shows athletic department team revenues for basketball, football, and all other sports, including percentage of the team revenue that the two sports represent. As illustrated, athletic revenues from football and basketball substantially exceed sportspecific expenses of all sports20 by an annual average of $419 million over the 14-year period from 2003 to 2018. Of course, it bears noting that limiting the analysis to athletic department revenues understates the contribution success in these sports can make to the university and its brand.21 19. For example, Duke University’s athletic revenues from 2003 to 2004 to 2018 to 2019 equaled US$381 million and US$338 million for men’s basketball and football, respectively. However, in three of the last 4 years covered in these data, football revenues exceeded men’s basketball revenues, including 2014–2015 when Duke’s team won the NCAA men’s basketball championship. (Source: EADA Database). 20. The NCAA requires all Division I programs to offer at least sixteen varsity sports. Some, such as Stanford University, which offers thirty-six, offer substantially more. 21. Those who incorrectly focus on the excess of expenses over revenues prevalent among NCAA athletic programs to claim that institutions “lose money” on athletics conveniently overlook the fact the university’s revenue maximization solution includes the contributions these sports make the university’s total coffers not just to those of the athletic department. We make this point not to justify the integration of athletics and academics under the NCAA system or to suggest that profit maximization should be the goal of an educational institution, but rather to highlight the error of focusing on local (i.e., athletic department), rather than global (university-wide) maxima. 7 Tatos and Singer 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total CAGR Total Athletic Revenues $3,213,294,036 $3,434,506,261 $3,670,328,748 $3,815,496,380 $4,050,127,593 $4,218,206,972 $4,343,301,044 $4,525,569,092 $4,839,609,168 $5,030,904,650 $5,610,585,515 $5,926,838,888 $6,169,928,081 $6,549,120,864 $6,531,977,905 Total Team Revenues (all sports) $2,260,904,132 $2,378,500,501 $2,550,589,509 $2,734,167,259 $2,896,881,878 $3,049,448,829 $3,075,169,283 $3,346,111,815 $3,598,837,201 $3,722,586,473 $4,075,492,696 $4,333,168,589 $4,471,143,653 $4,711,509,064 $4,820,670,931 Basketball and Football Revenues $2,079,939,326 $2,163,954,991 $2,326,158,973 $2,504,890,796 $2,650,917,236 $2,771,282,807 $2,788,960,650 $2,981,077,040 $3,202,871,959 $3,306,270,592 $3,690,765,202 $3,895,783,181 $4,005,592,546 $4,227,055,363 $4,293,988,107 Total Team Expenses (all sports) $1,714,827,299 $1,881,955,196 $1,978,452,929 $2,024,152,232 $2,261,879,951 $2,280,801,601 $2,381,058,555 $2,571,794,234 $2,745,718,217 $2,941,590,683 $3,165,007,812 $3,413,488,124 $3,588,685,311 $3,810,654,072 $3,942,543,850 $65,397,817,292 $47,204,510,882 $42,595,520,662 $36,760,066,214 5.6% 5.8% 5.6% 6.3% Figure 2. National College Athletic Association Power-5 conference public institution athletic revenues (inflation-adjusted to constant 2020 dollars). Source: College Athletics Financial Information and Equity in Athletics Disclosure Act Data. Figure 3 highlights the contribution of football and basketball to athletic department revenues as well as recent growth trends. From 2005 to 2018, these sports have contributed between 89% and 92% of total sport-specific revenues. Further, not only has football cemented its position as the primary breadwinning sport of intercollegiate athletic departments at P5 Conferences, but football also exhibited substantially higher growth than basketball (6.1% vs. 3.8% CAGR over this period, respectively). Football athletes face significant occupational risks, including brain injury and other long-term damage associated with such a collision sport. Those who play at the next level face the execrable practice of race-norming22 that the National Football League (NFL) uses to adjudicate disability claims. Thus, to the extent that Black athletes represent a majority of the college football players, not only are they prohibited from earning the economic benefits commensurate with their contribution to revenues (to which economists refer as MRP), but they also face the potential for reduced quality of life as a result of their sport. We now turn to the racial breakdown of college athletic departments. We also analyze other university constituencies that extract economic rents from athlete labor, particularly that in the highest revenue-generating sports, and compare their demographic structure with those of the athletes who generate those revenues. The economic rents generated by the NCAA cartel’s wage-fixing agreement and extracted from majority Black college basketball and football athletes flow to multiple beneficiaries: (1) athletes in majority White sports, (2) college coaches, (3) athletic department employees, and (4) university researchers who benefit from grants using college athletes as research subjects. The benefits that 22. Race-norming refers to the NFL’s practice of adjusting cognitive test scores for race when determining eligibility for disability claims. This practice assumes Black athletes begin with lower scores than White athletes. See, e.g. Pete Madden, NFL, Class Counsel Poised to Remove Race-Norming from Concussion Settlement Program, ABC NEWS, Mar. 23, 2021, https://abcnews.go.com/Sports/nfl-class-counsel-poised-remove-race-norming-concussion/story?id¼76615565. 8 The Antitrust Bulletin XX(X) Figure 3. Basketball, football, and all other sport revenues, National College Athletic Association Power 5 conference public institution only. Inflation-adjusted to 2020 Dollars. Source: College Athletics Financial Information and Equity in Athletics Disclosure Act Data. coaches accrue have been covered elsewhere and extensively in the media.23 We focus on the remaining three beneficiaries here. A. Racial Demographics and Finances of College Athletics by Sport Three simple realities characterize college athletics finances: (1) Football and basketball generate a majority of sport-specific revenues, (2) those revenues have exceeded expenses in those sports by approximately $19 billion at P5 Conference public universities over the 2003–2018 period, and (3) the excess revenues over expenses from football and basketball support the inference that these sports cover athletic expenses of other sports populated by predominantly White athletes. In other words, within the current NCAA framework, Black labor creates opportunities for White constituencies. As Figure 4 shows, net revenues24 from football and basketball ($20.6 billion) exceed net revenues in all other sports combined ($9.3 billion), leaving over $11 billion still remaining in total team profits, a stark contrast to the NCAA trope that college athletic programs “lose money.” Yet as we explain herein, athlete demographics in these sports differ significantly, particularly among the highest grossing D-I institutions that comprise the P5 Conference membership. Even among all NCAA D-I schools, the demographic discrepancy is clear, as seen in Figure 5. 23. A detailed listing of college coach salaries is available from USA Today’s database at https://sports.usatoday.com/ncaa/ salaries/. 24. We define net revenues here specifically as total team athletic revenues minus total team athletic costs, without including additional brand enhancement or other benefits that institutions accrue from athletic programs. 9 Tatos and Singer Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total Football and Basketball Revenues $2,079,939,326 $2,163,954,991 $2,326,158,973 $2,504,890,796 $2,650,917,236 $2,771,282,807 $2,788,960,650 $2,981,077,040 $3,202,871,959 $3,306,270,592 $3,690,765,202 $3,895,783,181 $4,005,592,546 $4,227,055,363 $4,293,988,107 Football and BB/FB All Other Team Basketball All Other Team All Other Team Revenues Minus Revenues Expenses Revenues Expenses Expenses Minus Expenses ($450,621,719) $1,083,240,774 $180,964,807 $631,586,525 $996,698,552 $1,201,423,664 $214,545,511 $680,531,532 $962,531,327 ($465,986,022) $1,276,909,331 $224,430,536 $701,543,598 $1,049,249,642 ($477,113,062) $1,299,346,974 $229,276,463 $724,805,258 $1,205,543,822 ($495,528,796) $1,453,384,206 $245,964,642 $808,495,745 $1,197,533,030 ($562,531,103) $1,462,061,936 $278,166,022 $818,739,665 $1,309,220,870 ($540,573,643) $1,520,203,661 $286,208,633 $860,854,893 $1,268,756,989 ($574,646,260) $1,645,147,138 $365,034,775 $926,647,095 $1,335,929,901 ($561,612,320) $1,750,290,171 $395,965,242 $995,428,046 $1,452,581,788 ($599,462,804) $1,879,913,810 $416,315,881 $1,061,676,872 $1,426,356,782 ($645,360,991) $2,045,255,785 $384,727,494 $1,119,752,027 $1,645,509,417 ($735,024,533) $2,204,207,945 $437,385,408 $1,209,280,179 $1,691,575,236 ($771,894,771) $2,328,348,141 $465,551,107 $1,260,337,169 $1,677,244,404 ($794,786,062) $2,509,616,513 $484,453,701 $1,301,037,558 $1,717,438,850 ($816,583,857) $2,587,231,281 $526,682,824 $1,355,312,569 $1,706,756,826 ($828,629,745) $46,889,508,768 $26,246,581,331 $5,135,673,045 $14,456,028,733 $20,642,927,437 ($9,320,355,688) Figure 4. Revenues and expenses for basketball and football versus other sports, Power-5 public institutions (inflation-adjusted to constant 2020 dollars). These figures expose several trends. While the percentage of Black athletes in other sports categories have remained relatively stable (13%), the percentage of White basketball and football athletes has decreased from 40% in 2012 to approximately 34% in 2020. Likewise, the percentage of White athletes has declined in other sports from 69% to 62% over the same time period. This decline has been consistent annually. In contrast, the participation of other minorities in college athletics has increased on a percentage basis at the NCAA D-I level. Focusing on P5 Conferences yields a more granular view of athlete demographics in the two revenue sports that dominate intercollegiate athletics both in terms of finances and exposure.25 To analyze these figures, we rely on the NCAA Demographic database both prior and subsequent to its format change and subsequent sequestration. Figure 6 combines data from both of these database versions to create a 2007–2020 longitudinal view of percentage White and Black football athletes by P5 Conference. We use football as the primary sport to illustrate the demographic differences because, as shown previously, it generates the greatest revenues for college athletics programs. This analysis yields several points of interest. First, the greatest disparity between Black and White football athletes exists at SEC and ACC. The PAC-12 Conference shows an even split, while the B1G, which is concentrated in the Midwest, shows a greater percentage of White athletes than Black, though the difference has diminished over time. The presence of the ACC and SEC at the top of this list, conferences that over this same period have yielded fourteen of fifteen national football champions, points to the contribution Black athletes have made to the success of their teams and to their universities’ brands. Indeed, in 2019, the SEC and ACC ranked first and third among all conferences in the 25. The last non-Power 5 school to win a national football championship was Brigham Young University in 1984, though nonPower-5 (P5) programs have found more success in basketball. Since 1990, non-P5 programs have won the national championship 8 times, with seven of these victories all coming from former Big East teams. 10 The Antitrust Bulletin XX(X) Year Sports 2012 Basketball/Football Other Sports Basketball/Football Other Sports Basketball/Football Other Sports Basketball/Football Other Sports Basketball/Football Other Sports Basketball/Football Other Sports Basketball/Football Other Sports Basketball/Football Other Sports Basketball/Football Other Sports 2013 2014 2015 2016 2017 2018 2019 2020 Race of Athlete Participants Black White Other Races 18,418 17,072 18,403 17,553 18,812 17,930 19,020 18,341 19,234 18,237 19,011 18,660 19,555 18,378 19,674 18,508 19,571 18,345 15,018 91,650 14,667 91,551 14,719 93,225 14,322 91,759 14,378 90,641 14,007 89,747 13,743 88,635 13,606 88,340 13,501 88,330 4,005 24,100 4,562 25,949 4,920 27,542 5,341 29,128 5,622 30,476 5,968 32,414 6,327 33,492 6,639 34,929 6,763 36,168 % Black % White Total % Minority 49% 13% 49% 13% 49% 13% 49% 13% 49% 13% 49% 13% 49% 13% 49% 13% 49% 13% 40% 69% 39% 68% 38% 67% 37% 66% 37% 65% 36% 64% 35% 63% 34% 62% 34% 62% 60% 31% 61% 32% 62% 33% 63% 34% 63% 35% 64% 36% 65% 37% 66% 38% 66% 38% Figure 5. Number of National College Athletic Association (NCAA) athletes by race, all Division I. Source: NCAA Demographics Database. number of former players on NFL Rosters, boasting 339 and 215, respectively.26 In that year, the percentage of Black athletes among SEC schools reached 61%, compared to 31% White athletes. We summarize basketball data across P5 Conferences in Figure 7, where we observe a similar trend. While minority athletes represented 64% of college basketball players in 2007, that figure has increased to 76% in 2020. Conversely, White athlete participation has declined from 36% to 25% over the same period. These figures underscore the extent to which minority athletes contribute to the economic rents that institutions reap from their labor. To emphasize the racial disparities among sports (and out of consideration for the reader’s patience), we limit our sport-specific breakdown to one year, 2020, across all D-I members as shown in Figure 8. For additional division-wide racial demographics, we refer the reader to Professor Richard Lapchick’s and Professor Shaun Harper’s excellent work at the University of Central Florida’s TIDES research center27 and the USC Race and Equity Center,28 respectively. The economic relevance of these racial disparities comes into sharp focus when compared to the revenues generated in each sport. To perform this analysis, we matched annual revenues and expenses by sport from the EADA and CAFI databases to sport-specific demographic data from the NCAA Demographics database. The resulting match permitted a comparison of sport-specific revenues with 26. Spencer Parlier, Colleges most represented on 2019 NFL rosters, NCAA, Sept. 8, 2020, https://www.ncaa.com/news/ football/article/2019-09-03/colleges-most-represented-2019-nfl-rosters. 27. Richard Lapchick, The 2020 Racial and Gender Report Card – College Sport, The Institute for Diversity and Ethics in Sport (TIDES), UNIV. OF CENTRAL FLORIDA, 2020, https://43530132-36e9-4f52-811a-182c7a91933b.filesusr.com/ugd/ 8af738_3b5d1b6bdb10457ebe8d46cc5a2fcfd0.pdf. 28. Shaun Harper, Black Male Student-Athletes and Racial Inequities in NCAA Division I College Sports, USC Race and Equity Center, 2018, https://race.usc.edu/wp-content/uploads/2020/08/Pub-2-Harper-Sports-Report.pdf. 11 Tatos and Singer Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ACC Big Ten Big 12 PAC-12 SEC % % % % % % % % % % Black White Black White Black White Black White Black White 55% 55% 53% 51% 52% 51% 50% 50% 51% 51% 51% 51% 51% 52% 42% 40% 39% 36% 39% 38% 39% 39% 38% 37% 37% 36% 37% 36% 43% 43% 42% 43% 42% 41% 39% 42% 41% 42% 42% 40% 39% 39% 54% 52% 51% 51% 52% 51% 49% 49% 47% 46% 46% 45% 45% 44% 46% 45% 45% 46% 51% 47% 49% 50% 51% 49% 49% 47% 46% 45% 48% 48% 47% 47% 43% 42% 41% 41% 38% 39% 39% 39% 39% 40% 43% 42% 42% 43% 41% 40% 41% 38% 35% 35% 35% 35% 35% 31% 43% 40% 42% 39% 38% 37% 36% 36% 33% 33% 32% 33% 32% 31% 55% 54% 53% 55% 58% 58% 56% 58% 58% 58% 58% 59% 61% 57% 42% 40% 43% 40% 37% 35% 38% 37% 36% 36% 36% 35% 31% 32% Figure 6. Percentage of college football athletes identified as Black or White. Source: National College Athletic Association Demographic Database. Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 % Black 58% 58% 60% 59% 57% 56% 56% 56% 56% 53% 53% 54% 50% 50% % White 36% 35% 32% 31% 30% 29% 28% 27% 26% 27% 27% 24% 25% 25% % Other 6% 7% 8% 11% 13% 15% 17% 17% 19% 20% 20% 23% 25% 26% Figure 7. Percentage of basketball players by race, Power-5 conferences only. Source: National College Athletic Association Demographic Database. the percentage of Black and White athletes in that sport every year from 2012 to 2019. The annual figures show little variation. Figures 9 and 10 provide the results of this comparison for the 2018–2019 academic year for men’s and women’s sports, respectively. These data indicate that Black athletes represent a greater percentage than White athletes in the highest revenue-generating sports and a small minority of the athlete population in sports such as golf, lacrosse, tennis, and others. Overall, sportspecific revenues show a positive 71% correlation with the percentage of Black athletes in that sport and a negative 46% correlation with the percentage of White athletes. 12 The Antitrust Bulletin XX(X) Figure 8. Racial demographics by men’s sport, National College Athletic Association Division I, 2020 only. At the D-I level, only two sports show positive net revenues: football and basketball, hence the term “revenue sports” accorded them, supporting the inference that predominantly Black athletes generate the revenues that fund sports in which predominantly White athletes compete. As historian and Arizona State University Professor Victoria Jackson explained regarding her time as a National Champion track and field runner at the UNC, “Thanks to the labor of football and basketball players, I did not pay for college, took full advantage of attending one of the top public universities in the nation, and traveled to cool places on the school’s dime.”29 Figures 9 and 10 provide the net revenue for both women’s and men’s sports. While the above figures inform in part the financial relationship between D-I level sports, revenues do not follow a uniform distribution among schools. As former NCAA Vice President Wally Renfro explained, “what we have is the haves, the have-nots, and the forget about its,”30 with the haves, that is, the highest revenue-generating athletic programs, populating the P5 conferences. Over the fourteenyear period covered by the EADA data, there are 934 school-year combinations among P5 Conference members (i.e., # of P5 schools reporting each year). Of these, 757 (81%) showed a positive net team revenue, defined as total team-related revenues across all sports in that year at that institution exceeding total team-related expenses. As expected, the corresponding figure for non-P5 NCAA D-I schools paints a far different picture. Of the 4,485 school-year combinations analyzed, net team revenues 29. Victoria Jackson, Take it from a former Division I athlete: College sports are like Jim Crow, LA TIMES, Jan. 11, 2018, https://www.latimes.com/opinion/op-ed/la-oe-jackson-college-sports-20180111-story.html. 30. O’Bannon v. NCAA, Trial Transcript at 237. Tatos and Singer 13 Figure 9. National College Athletic Association (NCAA) Division I 2019 athletic revenues by men’s sport with % Black and % White athletes in that sport. Source: College Athletics Financial Information, Equity in Athletics Disclosure Act, NCAA Demographics Database. Figure 10. National College Athletic Association (NCAA) Division I 2019 athletic revenues by women’s sport with % Black and % White athletes in that sport. Source: College Athletics Financial Information, Equity in Athletics Disclosure Act, NCAA Demographics database. 14 The Antitrust Bulletin XX(X) exceed net team expenses in only 1,317 (29%) of cases. These results (1) confirm Renfro’s previous observation regarding the presence of “haves” and “have nots” in collegiate athletics, undermining the notion that “competitive balance” exists with regard to resources and (2) confirm that even when accounting for team-related expenses, college athletics teams overall earn positive net revenue, as a result for football and basketball. Indeed, if we supplement Figure 2 to include all P5 universities, public or private, these institutions show a positive $12.2 billion team-specific net revenues over 2005– 2019.31 These results indicate that the generally smaller private P5 institutions also earn positive net revenues from team-specific intercollegiate athletic activities. Finally, we urge the reader not to misinterpret the net revenue results above as indicating that certain sports are “money losers” and thus cannot afford to compensate athletes beyond the current level. Such a conclusion would be erroneous, as the total sports-specific expenses32 already reflect athlete aid,33 coach compensation, promotional activities, and other costs whose MRP falls well below that of labor. Absent the restraint, athlete labor would receive priority in the order of compensation, as it does in professional sports leagues such as the NBA, NFL, and Major League Baseball (MLB). Moreover, while these revenues reflect only athletically related earnings, athletics allow schools to enjoy benefits such as brand-enhancement and greater prospective student interest on the academic side. We accompany our findings with a word of caution. Lest these results tempt others to misinterpret them, the above findings do not assign social importance or value to one sport or another. Nor do these revenue disparities measure the relative popularity of sports on equal terms. One might claim that the revenue discrepancy between men’s and women’s sports reflect revealed preferences and thus relative popularity. Such a claim risks drawing an erroneous causal inference, similar to attributing the result of winning a 100 m race to a runner’s ability when that runner started at the 50 m line, rather than at the starting line with the other competitors.34 After all, while men’s sports dominated the early twentieth century, women were not only largely excluded from these opportunities but they were still fighting for basic rights such as suffrage. As such, women’s sports, while continuing to gain popularity, still suffer from fewer opportunities, and this reality should not lead to the erroneous conclusion that fan interest in women’s sports is lacking.35 Moreover, college athletic finances suffer from a lack of transparency, which complicates the assessment of sport-specific finances. 31. This net figure is inflation-adjusted to 2020 dollars using the Consumer Price Index. 32. Department of Education, Users’ Guide for the Equity in Athletics Disclosure Act Web-Based Data Collection (2007) at 50 (“Expenses means expenses attributable to intercollegiate athletic activities. This includes appearance guarantees and options, athletically related student aid, contract services, equipment, fundraising activities, operating expenses, promotional activities, recruiting expenses, salaries and benefits, supplies, travel, and any other expenses attributable to intercollegiate athletic activities.”). 33. Athletic-related aid represents an internal transfer among institutional cost centers, whereas other expenses, such as coach compensation, represent external payments. 34. This reflects the same concept the subject of Barry Switzer’s famous quote, “Some people are born on third base and go through life thinking they hit a triple.” Tom Shatel, The Unknown Barry Switzer, CHICAGO TRIBUNE, Dec. 14, 1986, https://www.chicagotribune.com/news/ct-xpm-1986-12-14-8604030680-story.html. 35. Paul Lee et al., Women’s Sports Gets Down to Business: On Track for Rising Monetization, DELOITTE Insights, TMT PREDICTIONS 2021 (“Women’s sports events have demonstrated their mass-market appeal, and thus monetary potential, on multiple occasions. Historically, these occasions have been infrequent. In some cases, the ability for women’s sports to thrive on a sustained basis has been artificially constrained. In sports where men’s and women’s games have relatively equal marketing support, their commercial impact has been roughly equivalent. Tennis, for which the prize money at Grand Slam events is the same for women as men, is arguably the best example.”) Available online at https://www2.deloitte.com/xe/en/ insights/industry/technology/technology-media-and-telecom-predictions/2021/womens-sports-revenue.html. See also, Nielsen Sports, The Rise of Women’s Sports (“While they often don’t receive the same level of attention as men’s sports, a new Nielsen Sports research project highlights untapped potential and new commercial opportunities for rights holders, brands and media. A survey across eight key markets around the world (U.S., U.K., France, Italy, Germany, Spain, Australia and New Zealand) found that 84% of sports fans are interested in women’s sports. Of those, 51% are male, which Tatos and Singer 15 As Rachel Bachman recently reported in the Wall Street Journal, brands pay in excess of $200 million per year for the right to associate themselves with the NCAA championships,36 though this does not include college football, whose postseason is managed by ten Football Bowl Subdivision (FBS) conferences themselves. The NCAA transferred this sponsorship program to CBS and Turner Broadcasting, which currently pay the NCAA $850 million per year. In exchange, the networks earn revenues by selling advertisements primarily during the men’s basketball tournament. However, the networks only sell broad advertising sponsorships, not sport-specific ones. As such, sports currently rising in popularity, such as women’s softball and gymnastics, forego a potentially significant source of funding that they could otherwise obtain if they had the ability to sell individual sponsorships for their own sports. Further, while the NCAA has trademarked its “March Madness” phrase for both men’s and women’s tournaments, it has historically withheld its use from women’s basketball.37 Finally, it should be clear that the fact that some college sports remain predominantly White does not reflect disinterest from Black athletes, but rather lack of access. Nonetheless, the positive net revenues from team-related activities that NCAA member universities enjoy begs two questions. First, because the NCAA’s restraint on athlete compensation prohibits even this excess revenue38 from going to the athletes, where does it go? Second, how do the racial demographics of the beneficiaries of this revenue compare to those of the athletes who produced it? We address these questions next. B. Racial Demographics of College Athletic Department Staff We now turn to an analysis of the racial demographics of athletic department administration and support personnel whose compensation results primarily from MRP of college athlete labor. Figure 11 summarizes the total compensation and Black/White percentages of such employees aggregated at the NCAA D-I level. These figures highlight the interracial transfer of wealth that characterizes D-I NCAA collegiate athletics. While the NCAA members leverage monopsony power to impose a collusive restraint on athlete compensation limiting their earnings well below MRP (the economic definition of exploitation), the product of this majority-Black labor funds a variety of middle class and high-income administrative and support staff positions that accrue to overwhelmingly White employees. Naturally, the compensation associated with these positions is not uniformly distributed and thus can mask an even greater racial discrepancy after accounting for positional differences. Figure 12 provides such an analysis for 2016, though previous years exhibit similar patterns. Racial demographics of athletic administrative and support staff at P5 Conference member institutions exhibit similar patterns as Figure 13 shows. confirms that women’s sports engage a gender-balanced audience.”), https://nielsensports.com/global-interest-womenssports-rise/. 36. Rachel Bachman, NCAA Corporate Sponsorships Are for 90 Championships. They Revolve Around One, WALL ST. J., May 13, 2021, https://www.wsj.com/articles/ncaa-march-madness-basketball-sponsorship-11620865601. 37. Rachel Bachman et al., NCAA Withheld Use of Powerful ‘March Madness’ Brand From Women’s Basketball, WALL ST. J., Mar. 22, 2021, https://www.wsj.com/articles/march-madness-ncaa-tournament-womens-basketball-11616428776? mod¼article_inline. 38. We do not prescribe that only the net revenues should be distributed to athletes. In a competitive market, workers would earn the marginal revenue product (MRP) of their labor, that is, their work’s contribution to the firm’s revenues. Among professional leagues, labor (players) and management (ownership) may enter into collective bargaining agreements (CBAs). While the resulting revenue distribution can reflect each side’s relative bargaining power, these agreements specify the gross, not net, revenue distribution. There is no economic basis for prioritizing, for example, coach compensation, over the athlete compensation. Such a fallacy rears its head with every mention of the “college athletic programs operate in the red)” argument. 16 The Antitrust Bulletin XX(X) Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Support and Admin Staff 19,557 20,648 21,785 22,743 24,265 26,560 27,140 28,626 29,062 30,898 Wgt. Average Support and Annual Admin Individual Compensation Compensation $1,056,346,514 $54,014 $1,130,397,944 $54,746 $1,252,933,363 $57,514 $1,254,472,772 $55,159 $1,319,987,474 $54,399 $1,386,633,084 $52,208 $1,479,661,091 $54,520 $1,526,635,343 $53,330 $1,628,998,038 $56,053 $1,694,341,535 $54,837 % Black 9% 9% 9% 9% 9% 8% 9% 9% 9% 9% % White 86% 86% 85% 84% 84% 84% 83% 83% 81% 81% Figure 11. Annual athletic support/admin personnel salaries with percentage Black and White, National College Athletic Association (NCAA) Division I. Source: College Athletics Financial Information, NCAA Demographics Database (compensation is inflation-adjusted to 2020 dollars). Position Sports Information Director Head Athletic Trainer Assistant or Associate Director of Sports Information Chancellor President Assistant or Associate Athletic Trainer Ticket Manager Promotions/Marketing Manager Fund Raiser/Development Manager Business Manager Equipment Manager Administrative Assistant Faculty Athletics Representative Facility Manager Assistant Director of Athletics Director of Athletics Other Associate Director of Athletics Graduate Assistant (excluding Football) Compliance Coordinator/Officer Strength Coach Intern Senior Woman Administrator Academic Advisor/Counselor Life Skills Coordinator Total Staff 444 368 1,086 99 277 2,214 782 872 1,249 744 822 1,861 332 1,143 1,527 330 6,503 1,943 2,115 825 1,571 1,445 320 1,654 372 % Black % White 2% 94% 2% 90% 2% 92% 3% 86% 4% 88% 5% 84% 5% 86% 7% 84% 7% 87% 7% 85% 7% 84% 8% 84% 8% 87% 9% 82% 9% 85% 9% 86% 9% 76% 10% 86% 10% 75% 10% 82% 12% 79% 13% 72% 14% 82% 21% 71% 21% 71% Figure 12. National College Athletic Association (NCAA) Division I administrative and athletic support personnel, 2016. Source: NCAA demographics database. The relevance of these figures comes into view when juxtaposed against the billions of dollars these universities spend to fund these positions predominantly populated by White employees using the revenues that predominantly Black athlete labor produced. This comparison appears in FIgure 14. 17 Tatos and Singer Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ACC 14% 13% 13% 13% 13% 13% 13% 12% 12% 11% BIG10 8% 8% 7% 8% 7% 7% 7% 8% 8% 8% BIG12 8% 8% 9% 8% 8% 8% 8% 10% 11% 10% PAC12 7% 7% 7% 7% 7% 7% 7% 7% 6% 7% SEC 11% 12% 13% 14% 12% 11% 12% 13% 13% 13% Figure 13. Percentage of athletic administration and support personnel who are Black, by Power-5 conference. Source: National College Athletic Association demographics database. Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total ACC BIG10 BIG12 PAC12 SEC Total $95,647,132 $135,423,283 $147,947,343 $87,118,787 $147,285,574 $613,422,119 $97,702,260 $142,630,445 $168,480,054 $89,098,327 $156,870,476 $654,781,562 $109,019,895 $147,831,255 $174,098,486 $94,899,139 $193,109,446 $718,958,220 $171,235,345 $98,781,592 $179,956,771 $715,701,923 $104,554,384 $161,173,831 $107,920,906 $173,528,356 $177,396,353 $99,861,554 $191,051,390 $749,758,560 $115,662,970 $194,157,236 $158,277,347 $128,890,553 $199,775,614 $796,763,720 $119,401,250 $215,334,963 $143,814,022 $146,529,159 $255,550,244 $880,629,637 $121,656,843 $228,621,002 $148,677,453 $154,562,177 $252,321,333 $905,838,808 $134,581,473 $273,890,843 $163,688,223 $162,141,565 $278,416,938 $1,012,719,043 $136,979,106 $296,369,038 $171,064,350 $168,255,348 $294,917,989 $1,067,585,831 $1,143,126,218 $1,968,960,253 $1,624,678,976 $1,230,138,201 $2,149,255,775 $8,116,159,423 Figure 14. Athletic administration and support staff expenses, by Power-5 conference. Source: College Athletics Financial Information database. Focusing the position-specific analysis on the P5 Conference members yields similar patterns and both positive and concerning results. This analysis appears on Figure 15. We limit the analysis presented herein to 2016, the most recent year available, for the sake of brevity. On the positive side, a greater percentage of Athletic Directors are Black at the top conferences than in D-I overall, although the top positions administrative positions remain overwhelmingly White. More concerning, Black assistant coaches have made few inroads in breaking into head coaching ranks, which remain dominated by Whites. Although limited to 2015, the data obtained from the Dallas Morning News data set provides the most in-depth view of athletic department positional compensation for football team staff. These figures therein indicate that football staff, even excluding head coach salaries, receive approximately three times the average athletic department staff compensation. These results appear in Figure 16. The lowest salaries among football staff (less than $25,000 per year) include positions such as laundry assistant, equipment manager, receptionist, and interns, though salaries in this range generally reflect compensation paid to graduate assistants. Data for the limited number of institutions that appear in the Dallas Morning News data set and specifically identify such positions appear in Figure 17. This fact undermines a common refrain proffered by the NCAA that compensating athletes would subvert the “educational mission” of the intercollegiate athletics. Paying graduate students to work in the same sport that prohibits direct compensation to the athletes that generate the revenues exposes the NCAA 18 The Antitrust Bulletin XX(X) Position Chancellor & President Director of Athletics Associate / Assistant AD Faculty Athletics Rep. Head Coach Assistant Coach Athlete Race Black White Black White Black White Black White Black White Black White Black White 2012 1% 85% 8% 88% 10% 87% 8% 88% 9% 85% 20% 72% 20% 64% 2013 3% 81% 8% 88% 11% 86% 6% 92% 11% 84% 20% 74% 20% 63% 2014 3% 84% 13% 84% 10% 87% 6% 93% 10% 84% 20% 73% 21% 63% 2015 3% 85% 13% 84% 11% 85% 7% 91% 10% 83% 20% 71% 22% 62% 2016 1% 99% 14% 80% 11% 83% 11% 85% 9% 81% 20% 69% 22% 61% 2017 3% 97% 17% 79% 11% 83% 15% 84% 9% 82% 21% 67% 22% 60% 2018 3% 97% 17% 74% 11% 81% 15% 79% 10% 80% 21% 66% 21% 59% 2019 3% 97% 16% 75% 11% 82% 14% 81% 11% 79% 20% 67% 21% 58% 2020 1% 99% 13% 79% 10% 83% 19% 76% 11% 80% 21% 66% 21% 57% Figure 15. Demographics of athletic administrative and support staff, Power-5 conference members. Source: National College Athletic Association demographics data. Note: Data include some nonathletic position, such as president or chancellor. argument for the canard it represents. Certainly, graduate assistants, who can also receive scholarships and financial assistance, work long hours and balance the rigors of academic and athletic life.39 But athletes work under the same or even more rigorous constraints, incur the risks of injury, and forego earnings during the relatively limited time period they have to exploit their age-dependent, and thus perishable skills. Yet the NCAA’s restraint only applies to the athletes. Moreover, a positional examination of these data indicate that, at the top athletic revenue-grossing institutions in the United States, middle-class salaries extend a variety of positions whose compensation exceeds even the grant-in-aid paid to the athlete labor.40 As shown in Figure 17, equipment manager and recruiting assistant compensation can exceed the grant-in-aid paid to an athlete who would be later chosen in the professional draft. In a race-neutral scenario, we would expect the opposite of what we observe above: a higher percentage of Black administrative and support staff across these positions, particularly in light of the experience of Black athletes at the highest level and the educational preparation that colleges and universities claim to instill in participants in intercollegiate athletics. While the NCAA claims that a relatively minute fraction of athletes in football and basketball “go pro,”41 there appear to be myriad postgraduation opportunities for Black athletes to further their careers in intercollegiate athletics 39. Mike Barber, Long Hours, Low Pay and the Love of Football: The Life of a College Football Graduate Assistant, RICHMOND TIMES-DISPATCH, Aug. 23, 2018, https://richmond.com/sports/college/schools/university-virginia/longhours-low-pay-and-the-love-of-football-the-life-of-a-college-football/article_b9c43eaf-60d3-51d8-9088-6976fdf03f18. html. 40. In 2015, the NCAA limited allowable compensation to grant-in-aid. Following settlement in the In Re Grant-in-Aid Cap Antitrust Litigation, the limitation has been raised to cost-of-attendance. 41. While the NCAA and its acolytes parrot this claim repeatedly, it is both misleading and incorrect. Athletes themselves, by virtue of receiving compensation in exchange for their athletic labor are already professional in the normal sense of the word. The fact that they cannot be compensated beyond cost-of-attendance does not reflect amateur status, but rather the imposition of NCAA members’ monopsony power to compensate them below MRP. In other words, labor exploitation cannot logically be the distinguishing factor between amateur and professional status. Third, as even the NCAA has acknowledged, a significant percentage of basketball athletes continue their careers after college once overseas opportunities are taken into account. 19 Tatos and Singer Excluding Head Coach Compensation University Alabama Arkansas Auburn Florida Georgia Iowa State Kansas Kansas State Kentucky LSU Mississippi Mississippi State Missouri North Texas Oklahoma Oklahoma State South Carolina Tennessee Texas Texas A&M Texas Tech West Virginia Totals/Avg. Number of Staff 39 37 35 30 39 33 33 35 35 38 38 40 44 28 44 33 43 37 55 47 39 35 Total Football Staff Salary $13,989,596 $9,953,397 $9,361,725 $6,172,264 $9,563,940 $5,835,003 $5,113,790 $6,370,623 $8,295,094 $12,369,628 $2,879,715 $8,248,940 $8,821,163 $2,969,874 $12,373,433 $7,780,550 $8,321,944 $9,038,426 $14,365,088 $12,399,602 $7,760,032 $7,339,030 Lowest Highest Total Salary Salary Salary $7,119,596 $38,327 $1,350,000 $5,953,397 $12,000 $750,000 $5,261,725 $13,860 $620,000 $2,672,264 $16,744 $1,285,250 $6,360,340 $20,000 $950,000 $3,935,003 $20,400 $600,000 $4,313,790 $15,600 $600,000 $4,660,623 $7,822 $600,000 $5,295,094 $17,930 $835,000 $8,069,628 $24,225 $1,500,000 $2,879,715 $295,454 $725,000 $4,248,940 $15,000 $575,000 $5,296,163 $13,608 $652,375 $2,259,874 $12,480 $282,200 $6,373,433 $20,720 $1,200,000 $4,080,550 $15,080 $600,000 $4,321,944 $23,660 $750,000 $6,078,426 $14,000 $865,884 $9,265,088 $24,000 $1,435,000 $7,399,602 $25,250 $1,500,000 $4,660,032 $11,872 $650,000 $4,459,030 $16,533 $651,000 Average Salary $187,358 $165,372 $154,757 $92,147 $167,377 $122,969 $134,806 $137,077 $155,738 $218,098 $77,830 $108,947 $123,167 $83,699 $148,219 $127,517 $102,903 $168,845 $171,576 $160,861 $122,632 $131,148 837 $189,322,857 $114,964,257 $137,353 Figure 16. 2015 Football staff salaries—schools reported in Dallas morning news data. Source: Dallas morning news data set. administration. Yet colleges and universities fill these positions with predominantly White staff. With regard to the preponderance of White head coaches, institutions of higher education appear comfortable with Black individuals leading their teams to victory on the field but far less so with affording them the opportunity to do so from the sidelines as coaches. C. Amateurism’s Other Institutional Beneficiaries While this study has thus far largely focused on the interracial wealth transfer within the confines of institutional athletic departments, the rent extraction from Black labor extends to the academic side, where institutional researchers benefit from a ready pool of college athlete study subjects. A prominent example of such a practice lies with the use of collision sport as subjects, particularly in “sports-related concussion research.” For example, we searched the National Institutes of Health’s (NIH) RePORT database,42 which contains grant-specific information for the term “college football.” We then focused only on the results that identified “football” in the project abstract and listed either direct or indirect total grant cost amounts. We identified seventy-two such grants to colleges or universities totaling 42. National Institutes of Health (NIH) RePORT Database, https://reporter.nih.gov/. 20 The Antitrust Bulletin XX(X) University Alabama Arkansas Auburn Georgia Florida Iowa State Kansas Kansas State Kentucky LSU Mississippi Mississippi State Missouri Oklahoma Oklahoma State South Carolina Tennessee Texas Texas A&M Texas Tech West Virginia Recruiting Staff40 Avg. Staff Salary 1 $44,160 4 $45,258 3 $49,704 4 $63,500 ----2 $32,500 1 $32,474 6 $30,504 2 $91,299 ----4 $51,229 3 9 1 3 2 2 1 3 1 2 $44,863 $29,073 $30,992 $60,904 $48,000 $35,302 $122,000 $42,366 $50,000 $46,400 Graduate Assistants Avg. Staff Salary ----2 $12,000 ----2 $22,598 ----------------1 $17,930 --------3 12 ----4 3 --5 ----- $15,000 $18,361 ----$23,660 $14,167 --$34,776 ----- Equipment Manager/Staff Avg. Staff Salary 2 $63,672 2 $50,000 1 $47,030 2 $53,684 1 $73,100 ------------2 $57,501 4 $36,656 ----1 1 ----3 3 --3 ----- $60,984 $44,500 ----$40,556 $47,100 --$50,850 ----- Figure 17. Selected staff football salaries, 2015. Source: Dallas morning news dataset. approximately US$38 million.43 These do not include grants from private entities, such as corporations, sports industry, or associations such the National Operating Committee on Standards for Operating Equipment. In 2014, the NCAA signed a cooperative research and development agreement with the U.S. Defense Department (USDoD) with an initial grant amount of approximately US$20M.44 The USDoD has continued to provide additional funding or this joint agreement, named the Care Consortium. The basis for this agreement resides in large part with institutional researchers’ claims that college football athletes serve as a comparable population to U.S. military service members. While research has challenged the basis for this claim,45 our focus here concerns the beneficiaries of this grant. While Black athletes represent a significant percentage of football athletes, the most popular collision sport in the United States, we could not find any Black researchers among the main structure of the Care Consortium (a.k.a., the NCAA-DoD “Grand Alliance”). Not only do White researchers appear to comprise the entire Care Consortium Operating Committee, but none of thirty major research centers located at universities throughout the United States identify a Black Principal Investigator. 43. We excluded grant recipients such as Simbex, who represent for-profit entities, even though such entities may have also relied on college athlete samples. 44. Congressionally-Directed Military Research Program (CDMRP), HE NCAA-DOD GRAND ALLIANCE: Concussion Assessment, Research, and Education Consortium (CARE). https://cdmrp.army.mil/search.aspx?LOG_NO¼14132004. 45. Ted Tatos & Don Comrie, Cognitive Deficits and LD/ADHD Among College Football Athletes and Undisclosed Inclusion in Concussion Research, 1(1) J. SCI. PRAC. & INTEGRITY 1-23 (2019). Tatos and Singer 21 Certainly, previous research has acknowledged the disparity between White and Black research grant award recipients and the lower rate of NIH awards to Black scientists.46,47 The low prevalence of Black faculty among the tenured or tenure-track ranks exacerbates this problem.48 Our analysis of 2019 Integrated Postsecondary Education Data System (IPEDS) data for institutions that are members of the P5 Conferences, detailed in Figure 18, confirms this result. The direction of funding for research based on a predominantly Black athlete population laboring under a cartel-wide restraint on compensation adds to the racial funding gap. Nor does the argument that Black athletes are somehow beneficiaries of this concussion research hold validity. Indeed, Care Consortium grant recipients, including UNC’s Kevin Guskiewicz and Medical College of Wisconsin’s Michael McCrea, have had close ties to the NFL, the same sports league that has employed the discriminatory practice of “race-norming” to deny Black athletes compensation for damage to cognitive facilities resulting from the impacts to the head that characterize the sport. Moreover, such individuals have also received sports industry grants, served as expert witnesses for such entities, and coauthored articles antagonistic to Plaintiff claims, again undermining any potential arguments that such research serves the college athletes’ interests.49 D. Quantifying the Counterfactual Having provided the evidence that the MRP of Black athlete labor funds a variety of activities that benefit White constituencies, we now turn to quantifying the amount of this interracial wealth extraction. We begin by characterizing the counterfactual. In doing so, we distinguish between two relevant conditions: (1) athlete wages that would prevail in a competitive market and (2) those that would prevail under race-neutral conditions (i.e., discrimination-free). Clearly, the former does not imply the latter. Discrimination with respect to race or other protected classes can and does exist even in the face of competitive markets. Professional status does not insulate athletes from racial discrimination. Scully (1973) found that “race discrimination in professional team sports exists to a degree at least equal to that found in the larger society.”50 Kahn (1992) studied 1,363 players from the 1989 NFL season and found relatively small (4%) difference in compensation favoring Whites, after controlling for performance differences and other factors. However, the findings also showed a positive correlation between White and minority salaries and the demographic constitution of the metropolitan statistical area where the team was located, suggesting team management decisions reflected fan preference for watching players of their own race.51 Analyzing NBA free agent contract signings from 2011 to 2017, Condon and Minuci (2020)52 found that Black athletes were paid significantly less than their White counterparts. Also recently, econometric analysis by Watanabe and Cunningham (2020) employed various 46. Travis A. Hoppe et al. Topic Choice Contributes to the Lower Rate of NIH Awards to African-American/Black Scientists, 5(10) SCI. ADVANCES (2019), https://advances.sciencemag.org/content/5/10/eaaw7238. 47. Kelly R. Stevens, et al. Fund Black Scientists, CELL, 184, 2021. https://www.cell.com/action/showPdf?pii¼S00928674%2821%2900011-8. 48. U.S. Department of Education, National Center for Education Statistics. The Condition of Education 2020 (NCES 2020144), Characteristics of Postsecondary Faculty, https://nces.ed.gov/fastfacts/display.asp?id¼61. 49. Andrew Muscato et al., Failure to Disclose: The Mysterious Absence of Critical Data from UNC’s Renowned Concussion Research, THE ATHLETIC, Oct. 2019, https://theathletic.com/video/21-adhd/. 50. Gerald Scully, Economic Discrimination in Professional Sports, 38(1), L. & CONTEMP. PROBS. 67–84 (1973), https:// scholarship.law.duke.edu/lcp/vol38/iss1/4/. 51. Lawrence Kahn, The Effects of Race on Professional Football Players’ Compensation, The Effects of Race on Professional Football Players’ Compensation, 45(2) INDUS. & LAB. REL. REV. 295–310. doi:10.2307/2524836. 52. Condon Johnson & Eduardo Minuci, Wage Discrimination in the NBA: Evidence Using free Agent Signings, 87 SOUTHERN ECON. J. 517–39 (2020), https://doi.org/10.1002/soej.12461. 22 The Antitrust Bulletin XX(X) Black Faculty As % of: * All Tenured Faculty Male Tenured Faculty Female Tenured Faculty All Tenure-Track Faculty Male Tenure-Track Faculty Female Tenure-Track Faculty All Tenured Professors Male Tenured Professors Female Tenured Professors Tenure-Track Professors Male Tenure-Track Professors Female Tenure-Track Professors Power 5 Conference ACC BIG10 BIG12 PAC12 3.80% 3.40% 2.90% 2.30% 3.00% 2.80% 2.40% 1.90% 5.60% 4.50% 4.10% 2.90% 5.60% 4.50% 3.70% 2.70% 4.70% 3.40% 2.70% 2.20% 6.80% 6.00% 4.90% 3.40% 3.80% 3.40% 2.90% 2.30% 3.00% 2.80% 2.40% 1.90% 5.60% 4.50% 4.00% 2.90% 5.60% 4.50% 3.70% 2.80% 4.80% 3.40% 2.70% 2.30% 6.80% 6.00% 5.00% 3.40% SEC 4.00% 3.10% 6.20% 5.40% 4.20% 6.80% 4.00% 3.10% 6.20% 5.40% 4.20% 6.80% Figure 18. Percentage of faculty who are Black, Power-5 conference members. Source: Department of Education, Integrated Postsecondary Education Data System Database. Note: Gender-specific categories refer to Black faculty of that gender as a percentage of all faculty of that same gender. For example, the percentages in the category “Female Tenured Faculty” reflect Black female faculty as percentage of all female faculty. measures of racial attitude to investigate effects on in-person attendance at games.53 The authors found that market-specific racial sentiments could predict changes in market behaviors, results particularly relevant to the potential motivation for alleged negative consumer demand effects from compensation athletes at market rates. These issues have drawn attention in the press as well, particularly in light of criticism of Black athletes from the former chief occupant of the White House.54 Thus, in defining our counterfactual as the percentage of the revenues that would accrue to Black athletes absent the NCAA’s restraint, we note that racial discrimination may already contaminate our competitive benchmark—namely, NBA player salaries in 2020. To the extent it does so, our approach understates the economic benefits that would have accrued to Black athletes competing at the highest levels of the NCAA and thus provides an underestimate of the interracial transfer of wealth. We aim to estimate the overall revenues that Black athletes would have earned absent the NCAA’s restraint, not to estimate specific player salaries that would have prevailed absent the NCAA’s restraint. We refer the reader interested in the latter analysis to David Berri’s seminal 2016 article “Paying NCAA Athletes.”55 In addressing the former issue, we use the NBA as a benchmark for several reasons. First, the NBA and the NFL provide the professional counterparts to the two NCAA “revenue sports.” Second, the NBA has arguably the most equitable collective-bargaining agreement between the parties.56 Third, the NFL has been plagued by racial injustice, including the practice of race-norming. 53. Nicholas M. Watanabe & George B. Cunningham, The Impact of Race Relations on NFL Attendance: An Econometric Analysis, 15(1) PLOS ONE (2020), https://journals.plos.org/plosone/article?id¼10.1371/journal.pone.0226938. 54. Chris Cillizza, The Dark Racial Sentiment in Trump’s NBA and NFL Criticism, CNN, Sept. 23, 2017, https://www.cnn.com/ 2017/09/23/politics/donald-trump-nfl-nba/index.html. 55. David J. Berri, Paying NCAA Athletes, 26 MARQ. SPORTS L. REV. 479 (2016), https://scholarship.law.marquette.edu/ sportslaw/vol26/iss2/11. 56. Aaron Ross Coleman, How NBA Players Became the World’s Highest Paid Union Workers, GQ, Oct. 14, 2019, https:// www.gq.com/story/nba-players-union. For a detailed discussion of collective bargaining in professional sports, see Gabriel Feldman, Collective Bargaining in Professional Sports: The Duel Between Players and Owners and Labor Law and Antitrust Law, in O XFORD H ANDBOOK OF A MERICAN S PORTS L AW (M ICHAEL M C C ANN , ed., 2017), https://www. oxfordhandbooks.com/view/10.1093/oxfordhb/9780190465957.001.0001/oxfordhb-9780190465957-e-10. Tatos and Singer 23 One approach would be to estimate the counterfactual racial distribution of revenues on a headcount basis. However, such a calculation would underestimate the contribution of athletes whose MRP exceeds 1/n percent (the total revenue divided by the number of athletes or the per-athlete average). To address this issue, we use the total salaries for Black versus White players in the NBA during the 2020 season as a proxy for Black athletes’ overall contributions to their schools’ revenues during prior seasons. The assumption underlying this approach, which we believe to be reasonable, is that the athletes who contributed the most to their schools’ success would be more likely to reach the NBA and to earn a higher salary. We acknowledge some limitations to this approach. The intersection between a high league revenue year and a player’s contract expiration and thus potential for contract extension can affect such salaries in an especially strong revenue year for the NBA. Moreover, instances can occur when a player’s contributions far exceed his salary, an incongruity that might not be addressed until the next contract extension. A notable example of such an occurrence was Stephen Curry’s status as the eighty-second highest paid player in the league during the 2016–2017 season despite having won two consecutive NBA titles and the NBA’s most valuable player award in backto-back seasons.57 To analyze NBA player salaries, we rely on data from ESPN58 and Basketball-Reference.com.59 We extract annual salary data for each player by team for the 2020–2021. We then investigate each athlete’s race and supplement our data with this information. Our data set contains data for 506 NBA players, though we could not obtain salary data for sixty-nine athletes who all appear to have shortterm or two-way contracts. A summary of these data appear in Figures 19 and 20. Black athletes represent 80% of the NBA by count and collect approximately 83% of the total player salary. These data include athletes who entered the NBA ranks without ever playing collegiate basketball. If we limit the analysis to athletes who played in the collegiate ranks, Black representation in terms of head count and salary becomes even more stark. Black athletes earn approximately 90% of the total salary paid to 2020–2021 NBA athletes who previously played in college. Yet these are the same athletes whose earning potential the NCAA’s anticompetitive restraint stymied in the collegiate ranks. Assuming that a fifty–fifty revenue split (i.e., 50% athlete pay share) similar to that in the NBA’s forty-nine–fifty-one split in favor of players would predominate at the collegiate ranks, these results indicate that Black athletes would command approximately 45% of revenues in the two NCAA revenue sports (equal to 90% of *50% of total revenues).60 We then compare this figure to the current athlete pay share, estimated as the athlete aid percentage of total revenues. We acknowledge several reasons why using this statistic overestimates athlete pay share. First, athlete aid is calculated at face value. Absent a restraint, the student would likely receive some form of federal or state financial aid, meaning that the school would likely obtain external revenues from government sources to offset institutional aid. Second, in addition to missing classes, college athletes, particularly those in the revenue sports of football and basketball often face a reduced choice set when evaluating possible majors, as they must take into consideration conflicts with their sport’s obligations. As such, they do not obtain the full benefit of tuition as other students who do not face this constraint. As Duke University’s 2008 Athletics Strategy Report explained in discussing the impact of sports obligations on academic work, “In return for large television contracts, we have 57. Emmie Martin, How NBA Star Stephen Curry Deals with Making Millions Less Than Other Top Players, CNBC, June 13, 2017, https://www.cnbc.com/2017/06/13/how-stephen-curry-thinks-about-making-less-money-than-nba-teammates.html. 58. https://www.espn.com/nba/teams. 59. https://www.basketball-reference.com/. 60. For the reasons noted previously, we assume the same percentage would prevail in football). 24 The Antitrust Bulletin XX(X) Race Asian Black White Total % Black Players 1 409 96 Salary N/A $2,996,781,025 $617,732,868 506 81% $3,614,513,893 83% Figure 19. Pay share calculations, Public Power-5 athletic programs (figures in constant 2020 dollars). Source: Knight Commission College Athletics Financial Information Database. Note: Facility expenses include debt service payments, leases, and rentals. Race Asian Black White Total % Black Players 1 379 58 Salary 0 $2,778,971,536 $310,749,200 438 87% $3,089,720,736 90% Figure 20. Pay share calculations, Public Power-5 athletic programs (figures in constant 2020 dollars). Source: Knight Commission College Athletics Financial Information Database. Note: Facility expenses include debt service payments, leases, and rentals. surrendered control over a function that can profoundly influence the experience of our students.”61 Third, the marginal costs of an additional athlete in a class would be a small fraction of the actual revenues that the school obtains from that athlete, even if the institution can fill that position with a student who pays full tuition. Acknowledging the above considerations, we estimate our pay shares under two conditions: (1) giving full credit for athlete aid and (2) giving no credit for such aid and assuming that a university would offer room and board and some academic instruction as a supplement to the salary. Beginning with the first conditions, we first calculate the current athlete pay share, which averaged approximately 11% over the 2005–2019 period, as shown in Figure 21.62 We calculate the lost pay share of all athletes due to the restraint, equal to the difference between the but-for pay share (51%) less the actual pay share (11%). Using the aforementioned share of payments earned by Black athletes in the NBA (90%), as total basketball and football revenues, we estimate the total revenues that Black athletes in football and basketball would have earned absent the NCAA restraint in Figure 22. We calculate that, for public institutions that are members of the P5 61. Duke University. Unrivaled Ambition: A Strategic Plan for Duke Athletics, Apr. 28, 2008. https://today.duke.edu/ showcase/reports/athleticsstrategyfinal.pdf. 62. Our figures focus on Power 5 Conference institutions, which garner the highest revenues. As such, our athlete pay share is lower than that previously reported in White v. NCAA. “[P]layer costs are less than 15.5 percent of revenues of NCAA member institutions. This percentage is extremely low . . . In the NBA and NFL, player compensation is approximately 5565 percent of total revenues. These percentages offer a reasonable comparison and estimate of player inputs in the production of sports entertainment.” White v. NCAA, 2006 WL 8066803, Class Certification Order, at *5 & n.4 (C.D. Cal. Oct. 19, 2006). 25 Tatos and Singer Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total Revenues $3,313,841,456 $3,704,314,144 $3,768,292,638 $3,990,957,344 $4,021,403,565 $4,453,534,537 $4,459,336,361 $4,698,722,608 $5,036,331,778 $5,342,802,303 $5,859,341,460 $6,191,977,142 $6,552,674,314 $6,782,569,864 $6,801,202,045 Athlete Pay Share 9% 9% 9% 9% 10% 9% 10% 10% 10% 10% 10% 11% 11% 11% 11% Average $4,998,486,770 11% Coach Pay Share 11% 11% 12% 12% 13% 13% 14% 15% 15% 15% 16% 16% 16% 17% 18% Support Staff Pay Share 13% 12% 13% 14% 15% 14% 15% 15% 16% 16% 16% 16% 16% 18% 18% Total Athletics Debt $2,782,340,630 $3,000,149,090 $2,386,921,376 $3,278,260,388 $4,168,764,865 $4,511,617,408 $4,839,681,384 $5,086,591,300 $5,982,289,689 $6,501,537,145 $7,012,387,964 $7,377,335,604 $7,622,460,146 $7,663,967,398 $7,262,272,142 Ratio of Athlete Aid Dollars to Facility Expenses $1.76 $1.80 $2.24 $1.96 $1.56 $1.30 $1.27 $1.41 $1.27 $1.27 $1.27 $1.23 $1.28 $1.24 $1.30 17% 17% $5,298,438,435 $1.39 Figure 21. Current pay shares, revenues, and athletic debt, 2005–2019, Public Power-5 athletic programs (figures in constant 2020 dollars). Source: Knight Commission College Athletics Financial Information Database. Note: Facility expenses include debt service payments, leases, and rentals. Conferences, Black athletes’ lost wages of between approximately $17.3 billion and $21.5 billion between 2005 and 2019, in 2020 dollars, or approximately $1.2–$1.4 billion per year. As explained above, we assume that Black athletes would earn 45% of only football and basketball revenues. It is likely, however, that athletes would also earn a portion of revenues that are not specifically attributable to a team. The second scenario is well supported by concerns institutions have raised in the debate over name, image, and likeness (NIL) rights debate that restoring such rights to athletes would redistribute revenues that the institutions now accrue by arrogating these rights for themselves. To the extent this is true, our results would underestimate athlete pay share, though we expect that the return of NIL rights to the athletes to whom they belong would at least partly account for this difference. Finally, we address one of the NCAA’s attempted justifications for its restraint, namely, that is that the time spent in the collegiate ranks prepares athletes for the “next level” and enables them to obtain greater compensation. The data do not support such a claim. On the contrary, the average salary for an NBA athlete who played in college was $7.05 million in 2020–2021; NBA players who did not play in the collegiate ranks earned $7.72 million on average, nearly 10% more than their collegiate alumni counterparts. Limiting the analysis to Black athletes, the average salary figures for former college athletes and those who did not attend college in the United States are nearly identical at US$7.33 million and US$7.26 million, respectively, a difference of only 1%. Thus, the descriptive data do not support the claim that, for those who have already entered the NBA ranks, experience in the collegiate ranks results in a higher NBA salary. Rather, for former college athletes now in the NBA, the “college experience” served to enrich the primarily White constituencies who benefited from the collegiate athlete labor. To summarize the point for the reader still dubious about the legitimacy of the analogy of the plantation to modern-day college athletics, Black athletes place themselves at risk of long-term damage and catastrophic injury, as in the recent case of Maryland athlete Jordan McNair, yet the 26 The Antitrust Bulletin XX(X) Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Basketball and Football Revenues Actual Athlete Pay Share Lost Pay Share, All Athletes Lost Pay Share, Black Athletes Lost Pay Share Dollars, Black Athletes (offsetting aid) Lost Pay Share Dollars, Black Athletes (not offsetting aid) (revenue from BB/FB only) (student aid) (51% minus actual) (90% x share of all athletes) (51% less student aid % x 90% x BB/FB revenues) (51% x 90% x BB/FB revenues) $2,079,939,326 $2,163,954,991 $2,326,158,973 $2,504,890,796 $2,650,917,236 $2,771,282,807 $2,788,960,650 $2,981,077,040 $3,202,871,959 $3,306,270,592 $3,690,765,202 $3,895,783,181 $4,005,592,546 $4,227,055,363 $4,293,988,107 9% 9% 9% 9% 10% 9% 10% 10% 10% 10% 10% 11% 11% 11% 11% 42% 42% 42% 42% 41% 42% 41% 41% 41% 41% 41% 40% 40% 40% 40% 38% 38% 38% 38% 37% 37% 37% 37% 37% 37% 37% 36% 36% 36% 36% Total $783,122,796 $824,863,137 $876,641,331 $943,408,723 $984,497,898 $1,035,821,278 $1,027,792,754 $1,095,698,790 $1,176,098,841 $1,215,123,643 $1,358,485,711 $1,414,493,956 $1,456,579,444 $1,537,540,449 $1,548,629,899 $17,278,798,650 $954,692,150 $993,255,341 $1,067,706,968 $1,149,744,876 $1,216,771,011 $1,272,018,808 $1,280,132,938 $1,368,314,361 $1,470,118,229 $1,517,578,202 $1,694,061,228 $1,788,164,480 $1,838,566,979 $1,940,218,412 $1,970,940,541 $21,522,284,525 Figure 22. Black athlete lost pay share, 2005–2019, public P-5 athletic programs. (Figures in constant 2020 dollars). benefits of their labor accrue to White constituencies at multiple levels. These levels include coaches, athletic department personnel, and White constituencies on the academic side. It is of course no surprise that such beneficiaries offer self-serving and counterfactual assessments of the exploitation that college athletics represents. Once institutions have extracted the benefits of their labor, many of these athletes are discarded much like an expended battery. Some return to their communities with little to show for their labor other than physical injuries that may last the rest of their lives and a few memories of bygone days of glory. Meanwhile, the plantation awaits another season to begin a new harvest of Black athlete labor to exploit. We now turn to explaining how it has managed to do so and evade condemnation under antitrust law despite its obvious anticompetitive restraint. III. The Anachronism of NCAA v. Board of Regents The Supreme Court’s seminal Board of Regents63 decision has been dissected ad infinitum, and we do not intend to repeat that exercise here. Rather, we focus on the increasingly obvious incongruities between the current reality of NCAA amateurism and its characterization in Board of Regents. Judge Smith of the Ninth Circuit Court of Appeals explained the status quo in his concurring opinion in Alston v. NCAA: 63. NCAA v. Board of Regents, 468 U.S. 85 (1984). Tatos and Singer 27 The treatment of Student-Athletes is not the result of free market competition. To the contrary, it is the result of a cartel of buyers acting in concert to artificially depress the price that sellers could otherwise receive for their services. Our antitrust laws were originally meant to prohibit exactly this sort of distortion.64 In so doing, we begin with a brief prologue that sets the stage for our evaluation of the status quo. For nearly four decades, NCAA v. Board of Regents has provided the primary judicial pillar of support for the NCAA’s amateurism model and shielded it from legal challenges to the various and obvious anticompetitive restraints it imposes. This is true even though, as the recent noted historians explained in an amicus brief on behalf of college athletes in Alston v. NCAA,65 the NCAA has modified the definition of amateurism to either serve the cartel membership’s own interests or to comply with legal settlements, with the latter exemplified in the extension of permissible pay to include cost of attendance. The obvious irony, of course, lies in the fact that the Stevens Court ruled against the NCAA, finding that the NCAA’s television plan, which limited both the total number of televised intercollegiate football games and the total number of games that any one college may televise, violated Section 1 of the Sherman Act. The Court’s subsequent discussion ruminating that the NCAA should be accorded “ample latitude” to preserve what it described the “revered tradition of amateurism” provided the NCAA the judicial cover to effectively insulate its restraint on athlete compensation from antitrust scrutiny, particularly that dealing with collusive restrictions on athlete compensation. In O’Bannon v. NCAA, the Ninth Circuit upheld the district court’s decision that the NCAA violated antitrust law by its restraint on athletes’ ability to monetize their NIL rights, heralded the first fractures in the NCAA’s blockade of athlete rights in decades. Critically, the Ninth Circuit regarded the Supreme Court’s “ample latitude” language in Board of Regents as dicta, commentaries rather than binding legal precedent. Moreover, the Ninth Circuit rejected the NCAA’s reliance on Board of Regents to claim that its restraint is “presumptively competitive.” While acknowledging that such statements from the nation’s highest court should be accorded appropriate deference, the Ninth Circuit found that Board of Regents “long encomium to amateurism, though impressive-sounding, was therefore dicta.”66 The Ninth Circuit did not stop there, adding that, “even if the language in Board of Regents addressing amateurism were not dicta, it would not support the tremendous weight that the NCAA seeks to place upon it.”67 In short, the O’Bannon Court rejected the NCAA’s argument that Board of Regents had shielded its entire enterprise from antitrust scrutiny and blessed its enterprise as per se legal, an immunity prescription not bestowed upon any entity without an antitrust exemption (e.g., MLB). Disagreement between Courts of Appeal, often a precursor of Supreme Court’s granting certiorari to subsequent appeals, soon followed in the form of the Seventh Circuit’s decision in Deppe v. NCAA.68 Deppe, a D-I football player, filed a class-action suit alleging the NCAA’s “year-in residence” rule requiring athletes in that sport transferring to another institution “sit out” from competition for a year violated Section I of the Sherman Act. It is worth pointing out that this rule applied (and continues to do so for the time being) only to the major revenue sports that include football and 64. In re NCAA Athletic Grant-In-Aid Cap Antitrust Litig (Smith, M concurring in enjoining the National Collegiate Athletic Association from enforcing rules that restrict the education-related benefits that its member institutions may offer students who play Football Bowl Subdivision football and Division I basketball, at 58–59). 65. Alston v. NCAA, Brief of Historians as Amici Curiae Supporting Respondent, Mar. 10, 2021 (hereafter, “amici historians”), https://www.supremecourt.gov/DocketPDF/20/20-512/171481/20210310124813181_20512%20tsac%20Historian%20Amicus%20Br-final2-PDFA.pdf. 66. O’Bannon v. NCAA - 802 F.3d 1049 (9th Cir. 2015) at 30. 67. Id. 68. Deppe v. NCAA, 893 F.3d 498 (7th Cir. 2018). 28 The Antitrust Bulletin XX(X) men’s and women’s basketball.69 Citing to Board of Regents and its own precedent in Agnew v. NCAA, the Seventh Circuit upheld the lower court’s dismissal of the case, finding that “The year-in-residence requirement is an eligibility rule clearly meant to preserve the amateur character of college athletics and is therefore presumptively procompetitive . . . .”70 The Seventh Circuit’s decision has received criticism for its legal formalism71 and stands in direct contrast to the Ninth Circuit’s preference for substance. In finding that “the substance of the compensation rules matters far more than how they are styled,” the O’Bannon Court cited to Simpson v. Union Oil Co. of California72 in proclaiming that “antitrust laws are not to be avoided by such ‘clever manipulation of words,’”73 and added that, The mere fact that a rule can be characterized as an “eligibility rule,” however, does not mean the rule is not a restraint of trade; were the law otherwise, the NCAA could insulate its member schools’ relationships with student-athletes from antitrust scrutiny by renaming every rule governing student-athletes an “eligibility rule.”74 Deppe v. NCAA exemplifies Board of Regents’ enduring judicial sway, despite varying interpretation of its contents as dicta or binding precedent. Yet, for all intents and purposes, this decision reflects at best an anachronistic view of college sports, and to continue to accept its description of amateurism necessitates a willful suspension of disbelief worthy of the Marvel universe. Despite the lip service the NCAA pays to education, the 1929 Carnegie Report, now nearly a century old, observed that “He [the college athlete] works (for it is work, not play) under paid professional coaches. . . . .”75 We further note that the term “education” only appears once in the Supreme Court’s Board of Regents decision and does not do so until Section VII, the final paragraph in the decision and the same section to which the Ninth Circuit referred as dicta. Prior to this section, the Court focused on the commercial product and the perceived necessity of amateur status to the “character and quality” of that product by nature of its identification with an “academic tradition.” We begin our discussion of the incongruities of the world as defined under Board of Regents and the reality of modern-day intercollegiate athletics here. The narrowing distinction between “professional” and “collegiate” sports has devolved into mere semantics rather than one based on substance, placing it at odds with the Ninth Circuit’s emphasis on the latter over the former in O’Bannon. The functional difference between professional and collegiate leagues lies with the fact that the NCAA cartel leverages its monopsony power to fix athlete compensation at cost of attendance, forbidding players from receiving the market wages or compensation for their NIL rights they would otherwise obtain. The use of some perceived skill difference to justify the imposition of the wage restraint represents nothing more than a canard. 69. Ross Dellenger, Sources: NCAA on Brink of Allowing One-Time Immediate Transfer for All Athletes, SPORTS ILLUSTRATED, Apr. 1, 2021, https://www.si.com/college/2021/04/01/ncaa-transfer-rule-change-no-penalty. 70. Deppe at 2. 71. Michael A. Carrier & Marc Edelman, College Athletics: The Chink in the Seventh Circuit’s “Law and Economics” Armor, 117 MICH. L. REV. ONLINE 90 (2019), https://repository.law.umich.edu/mlr_online/vol117/iss1/7. 72. 377 U.S. 13, 21–22 (1964). 73. O’Bannon at 34. 74. Id. 75. Howard J. Savage et al., American College Athletics, Carnegie Foundation for the Advancement of Teaching, Bulletin Number 23, 1929. Of course, the work that college athletes perform now extends to the female gender, whose athletic exploits have continued to capture fan and commercial interest, despite the relative few resources devoted to women’s sports compared to men (as the recent weight room fiasco during the 2021 NCAA March Madness demonstrated). It merits note that the United States Women’s Soccer Team, the majority of whose members played collegiate soccer, is the most successful team in the history of international women’s soccer, winning a total of four World Cup Championships. The United States men’s soccer team scored its best result in 1930, finishing in third place, losing to Argentina in the semi-finals. Tatos and Singer 29 In the multibillion-dollar world of college football and basketball, an athlete can be an “amateur” during the NCAA tournament, yet immediately become “professional” upon the disposition of the NCAA’s economic shackles. Once the issue of eligibility becomes moot, professional football and basketball teams can sign the athlete to a contract upon the completion of the subsequent draft. To use an extreme example, Duke’s Zion Williamson, who drew enormous interest while at Duke was regarded as an “amateur,” a disparagingly diminutive status, particularly given (1) the recruiting battle that preceded his decision to attend Duke University, (2) corporations waited with bated breath for his release from the NCAA cartel rules, and (3) he was widely acknowledged to be the #1 draft pick in the NBA and within weeks, he signed a multimillion dollar contract. That ESPN took every opportunity to feature his every move, even using a “Zion Cam”76 points to the enormous fan interest he generated. The Board of Regents Court committed its most critical error in claiming that, for the product to maintain its character and the nexus to the “academic tradition,” college athletes “must not be paid.” As amici historians and others have explained, the Court’s interpretation is historically inaccurate. This distinction between the two becomes apparent once we explore the seminal chasm between the vernacular interpretation of “must not be paid” (and likely the Court’s understanding of the term) versus the NCAA mutable definition of it. At the recent Supreme Court hearing, NCAA defense attorney Waxman displayed the NCAA’s definitional sleight of hand: for purposes of defining permissible compensation, being “paid” means whatever the NCAA deems it to mean at any given time.77 . . . the NCAA for decades has defined “pay” to mean compensation in excess of two things: Number one, allowances for educational expenses, and educational can include both academic and athletic. That is the reasonable and necessary expenses to obtain an education. And, number two, certain sort of token prizes and awards for exceptional performance that are characteristic of amateur leagues . . . . Waxman’s representation to the Court offers yet another example of the semantic sleight-of-hand of which NCAA and its members avail themselves as needed to evade attention on the internal inconsistencies that pervade their arguments. In an earlier example, UNC athletic director Bubba Cunningham attempted to explain to CBS’ Dennis Dodd why the school should not receive NCAA punishment for the academic fraud to which it admitted to its own accreditation agency. As Dodd explained, “Revealing what seems to be North Carolina’s defense in the case, Cunningham told CBS Sports, ‘Is this academic fraud? Yes, it is by a normal person’s standards. But by the NCAA definition [it is not].’”78 The NCAA’s semantic gymnastics aside, the distinction between the Court’s “must not be paid” prescription and the nature of athlete compensation merits attention. As a technical matter, universities pay college athletes “in-kind” rather than in cash. In exchange for their labor, injuries, and foregone opportunities, athletes receive some measure of room-and-board services, training, access to facilities, as well as assorted trinkets,79 much in the same way that casinos offer “comps” (e.g., free food/drinks and rooms) to induce patrons to continue gambling and secure profits for the “house.”80 Thus, for all intents and purposes, “pay-for-play” already exists and has 76. Matt Hladic, ESPN Getting Crushed For “Zion Cam” During Duke Game, THE SPUN, Feb. 26, 2019, https://thespun.com/ acc/duke-blue-devils/espn-getting-crushed-for-zion-cam-during-duke-game. 77. Alston v. NCAA, Supreme Court Hearing Transcript at 20-21. 78. Dennis Dodd, North Carolina AD Lays out Academic Fraud Defense: NCAA ‘Overcharged’ Tar Heels, CBS SPORTS, Feb. 8, 2017, https://www.cbssports.com/college-football/news/north-carolina-ad-lays-out-academic-fraud-defense-ncaaovercharged-tar-heels/. 79. David Broughton, College Football Bowls go Digital for Player Gifts this Year, BUS. J., Dec. 17, 2020, https://www. bizjournals.com/jacksonville/news/2020/12/17/college-football-bowls-go-digital-for-player-gifts.html. 80. We credit Don Comrie for the casino analogy. 30 The Antitrust Bulletin XX(X) existed ever since the NCAA abandoned its feeble attempt to enforce a “Sanity Code” between 1948 and 1951.81 Chief Justice John Roberts raised the fact that loss-of-value insurance premiums, which are paid by schools to ensure the risks undertaken by athletes from which the school benefits, is the very essence of “pay for play.”82 But the NCAA has deemed other payments as “permissible.” U.S. Olympic athletes can earn US$25,000 for a gold medal, US$15,000 for silver, and US$10,000 for bronze plus additional awards in an Olympic year.83 Foreign athletes competing within the NCAA rubric can receive any amount of funds because the NCAA places no limit on award money that a national body can offer.84 One might ask at this point how the NCAA can maintain the mirage of amateurism. Indeed, NCAA Bylaw 12.02.11 defines professional status as, “A professional athlete is one who receives any kind of payment, directly or indirectly, for athletics participation except as permitted by the governing legislation of the Association.”85 The NCAA’s own definition of amateur status is whatever it deems it to be at that time, undermining any claim that amateurism represents any “revered tradition” whatsoever. The NCAA can never run afoul of its own ban on “pay for play” because it redefines it to encompass whatever modicum of reform to which litigation, public pressure, or statutory order forces it to accede. To underscore this point, Oklahoma quarterback Kyler Murray maintained his eligibility to play collegiate football despite having signed a professional contract that included a US$4.7 million bonus with the Oakland Athletics of MLB.86 The NCAA resolved the obvious incongruity with amateurism through Bylaw 12.1.3 “Amateur Status if Professional in Another Sport,” which states that “A professional athlete in one sport may represent a member institution in a different sport and may receive institutional financial assistance in the second sport.”87 Whatever tether the Ninth Circuit in O’Bannon may have been led to understand exists between permissible compensation and education reflects nothing more than sleight of hand on the NCAA’s part.88 Nonetheless, the NCAA has justified its ban on direct payment by inundating the public, legislators, and the judiciary with propaganda hailing its mythological link to education.89 E. The NCAA’s Miseducation of Capitol Hill and the Judiciary The ostensible link to academics arises from the perception of classroom attendance and hence the attainment of a “college degree,” which itself purports to indicate some measure of education commensurate with successful graduation. Despite its disavowal of any fiduciary duty to provide any sort of education to students or to protect students from academic fraud on the part of cartel members,90 the 81. Andy Schwarz, The NCAA Has Always Paid Players; Now It’s Just Harder To Pretend They Don’t, DEADSPIN, Aug. 29, 2015, https://deadspin.com/the-ncaa-has-always-paid-players-now-its-just-harder-t-1727419062. 82. Alston v. NCAA Supreme Court Hearing at 8. 83. Steve Berkowitz, Olympics Offer Rare Chance for NCAA Athletes to be Paid, USA TODAY, Aug. 2, 2016, https://www. usatoday.com/story/sports/olympics/rio-2016/2016/08/02/paying-ncaa-college-athletes-at-rio-olympics-kyle-snyder-katieledecky/87709714/. 84. NCAA, Olympians Made Here, Can college athletes accept prize money at the Olympics, https://www.ncaa.org/about/ resources/media-center/olympians-made-here. 85. NCAA, 2020-21 Division I Manual, eff. Aug. 1, 2020 at 62 (emphasis added), https://web3.ncaa.org/lsdbi/reports/ getReport/90008. 86. Alex Kirshner, Why Kyler Murray is NCAA-eligible for Oklahoma Despite Signing a Baseball Contract, SB NATION, Sept. 1, 2018, https://www.sbnation.com/college-football/2018/9/1/17432194/kyler-murray-ncaa-eligible-mlb-draft. 87. NCAA, 2020-21 Division I Manual at 68. 88. This reality also undermines an argument that the NCAA and its experts have raised in litigation, namely that if athletes were professional, they would spend less time on their educational endeavors. 89. Andy Schwarz & Kevin Trahan. The Mythology Playbook: Procompetitive Justifications for ‘Amateurism,’ Biases and Heuristics, and ‘Believing What You Know Ain’t So, 61(1) ANTITRUST BULL. 140–83 (2017). 90. McCants v. Nat’l Collegiate Athletic Ass’n, 251 F. Supp. 3d 952 (M.D.N.C. 2017). Memorandum in Support of Defendant the National Collegiate Athletic Association’s Motion to Dismiss at 17. Tatos and Singer 31 NCAA continues to market itself as an “educational organization,” a description that appears in its audited financial statements.91 Indeed, the NCAA’s Diane Dickman, NCAA managing director for membership and academic affairs, testified in the O’Bannon trial that “at its heart, the NCAA’s an educational entity, and we’re about educating young people.”92 The implication, of course, is that college sports remains an avocation, such that athletes who partake in these contests are there primarily to obtain academic instruction, not to garner millions for their institutions and entertain fans. While this may be true for some sports (e.g., fencing and crew, as Justice Kagan observed at the Alston hearing93), the opposite is true for the main revenue-generating sports that the NCAA itself sets apart: football and basketball. Stark demographic differences exist between sports such as fencing and crew and the majority Black sports of football and basketball that fund not only coaches and a variety of support staff but also the former overwhelmingly White “country club” sports.94 The late economist Gary Becker, posting in the blog he shared with Judge Richard Posner, noted the inconsistency of the NCAA’s pro-education argument with the factual evidence, observing that “Unfortunately for the NCAA, the facts are blatantly inconsistent with these defenses . . . . It is impossible for an outsider to look at these rules without concluding that their main aim is to make the NCAA an effective cartel that severely constrains competition among schools for players.”95 Recent events have ripped apart any remaining facade of an association between this academic tradition and the multibillion-dollar enterprise of intercollegiate athletics as well as any pretense of an educational mission on the NCAA’s part.96 More relevant to the antitrust issues involved, these events undermine the Supreme Court’s Board of Regents decision, which claimed that athletes “must attend class” for the “product” to maintain its character. For approximately two decades, UNC permitted a system of fraudulent courses, which included the now-infamous “paper classes” to continue, ensuring athlete eligibility but little in the form of any educational instruction. The courses never met and the students had no interaction with the professor, only with the Student Services Manager in African and Afro-American Studies, Deborah Crowder. Although not a member of the faculty, Crowder managed the courses, which consisted only of a single paper due at the end of the semester that she graded, “largely without regard to the quality of the papers.”97 The subsequent investigation, conducted by Kenneth Wainstein, then of the Cadwalader law firm, found that such courses were especially popular among athletes in the revenue sports of football and basketball, who were referred to these courses by academic counselors who sought to maintain athlete eligibility and hence allow the institution to reap the financial windfall. UNC did so, winning the 2005 NCAA men’s basketball tournament. Yet one of its top athletes, Rashad McCants, author of the aforementioned Plantation Education, admitted he 91. NCAA, 2019-2020 Consolidated Financial Statements, Independent Auditor’s Report at 6. https://ncaaorg.s3.amazonaws. com/ncaa/finance/2019-20NCAAFIN_FinancialStatement.pdf. 92. O’Bannon v. NCAA, Trial Transcript at 165. 93. Alston v. NCAA Supreme Court hearing at 20–21. 94. Jackson, supra note 29 (Noting the divergence between her own experiences in a sport where coaches prioritized academics, Prof. Jackson explained, “This is not the trajectory for many revenue-generating college athletes. They spend upwards of 50 or 60 hours per week on sports. They frequently are enrolled in easy, sometimes fraudulent courses to maintain their eligibility and often don’t graduate.”). 95. Gary Becker & Richard Posner, The NCAA as a Powerful Cartel, THE BECKER-POSNER BLOG, Apr. 3, 2011, https://www. becker-posner-blog.com/2011/04/the-ncaa-as-a-powerful-cartel-becker.html. 96. Nathan Kalman-Lamb et al. ‘We are being Gaslit’: College Football and Covid-19 are Imperiling Athletes, THE GUARDIAN, Aug. 20, 2020, https://www.theguardian.com/sport/2020/aug/03/college-football-coronavirus-athletes. 97. Kenneth L. Wainstein, A. Joseph Jay III, Colleen Depman Kukowski. Investigation of Irregular Classes in the Department of African and Afro-American Studies at the University of North Carolina at Chapel Hill (Oct. 16, 2016), hereafter “Wainstein Report,” at 2. 32 The Antitrust Bulletin XX(X) even made the dean’s list in the spring of 2005 despite not attending any of his four classes, for which he received straight As.98 As was the case with Wilde’s debaucherous Dorian Gray, the factual record paints a far different portrait of the NCAA than the visage the organization presents to the public. The reader may wonder, if the Board of Regents’ Panglossian view of amateurism stands in such stark contrast to reality, how does the system continue to exist and thereby make a mockery of Section I of the Sherman Act? It is here that we point the finger, and we hope, spur a realization from the adherents to the Chicago School of antitrust that the consumer-welfare standard, or at the very least, its perversion in defense of the NCAA’s exploitation of athlete, bears the blame. The type of rent-seeking behavior, branded under the term of “amateurism,” exists nowhere outside of the United States, despite the NCAA’s attempts to export its exploitative practice elsewhere.99 Some Chicago School scholars have argued that the consumer welfare’s flexibility permits its application in adjudicating anticompetitive conduct on the buyer side (i.e., monopsony power). The fact that it has failed to condemn even blatantly anticompetitive conduct such as the NCAA cartel-wide wage restrictions undermines such claims. Indeed, if the consumer orientation cannot discern harm to competition in such a case, what is the prospect that a standard built around consumer welfare can condemn harm to labor in less obvious instances? As Judge Smith succinctly explained in his concurring opinion in Alston v. NCAA, Although the district court correctly applied our precedents, the result of this analysis seems to erode the very protections a Sherman Act plaintiff has the right to enforce. Here, Student-Athletes are quite clearly deprived of the fair value of their services . . . . Under the Rule of Reason analysis we affirm today, so long as the NCAA cites consumer demand for college sports, we allow it to artificially suppress competition for collegiate Instead of requiring the NCAA to explain how those limits promote schools’ competition for athletes, we leave Student-Athletes with little recourse under the antitrust laws. Student-Athletes are thus denied the freedom to compete and, in turn, “of compensation they would receive in the absence of the restraints.”100 The elevation of spurious output effects in the product market as the lodestar in assessing harm to competition has, thus far, proven ill-suited to addressing such anticompetitive behavior in many labor markets.101 The NCAA’s recent appearance before the Supreme Court offers a clear example. In 98. Steve Delsohn, UNC’s McCants: ‘Just show up, play’, ESPN, June 6, 2014, https://www.espn.com/espn/otl/story/_/id/ 11036924/former-north-carolina-basketball-star-rashad-mccants-says-took-sham-classes. In stark contrast with the NCAA’s attempt to characterize itself as an “educational entity,” it imposed no punishment on UNC. Even though UNC had admitted to its own accreditation agency that it had committed “long-standing” academic fraud, the school reversed its position when in front of the NCAA’s Committee on Infractions, denied any wrongdoing, stood by the validity of the courses it had previous called fraudulent, and claimed that the admission to its accreditor represented a “typographical error.” Despite the Committee’s skepticism and apparent disbelief, NCAA rules could not levy punishment for academic fraud unless the institution admitted it to the NCAA itself. As a result, the only punishment levied was a show-cause finding against a black African American Studies professor and the NCAA continues to list the women’s basketball team as the only program relevant to the scandal. See NCAA, Legislative Services Database, Major Infractions Cases, UNC-Chapel Hill, Oct. 13, 2017 decision, https://web3.ncaa.org/lsdbi/search/miCaseView?id¼100068. 99. Zach Schonbrun, An N.C.A.A. for Japan? Emmert Heads Abroad, Offering Advice, NY TIMES, Aug. 28, 2017, https:// www.nytimes.com/2017/08/28/sports/ncaa-japan-mark-emmert-college-sports.html. 100. In re NCAA Athletic Grant-in-Aid Cap Antitrust Litig (Smith, M concurring at 66–7), citations omitted. 101. Michael Ivadevia, Poach-No-More: Antitrust Considerations of Intra-franchise No-Poach Agreements, 35(1) ABA J. LAB. & EMP. L. (2020) at 155 (“ . . . modern antitrust law’s hyper focus on consumer welfare, as influenced by the Chicago School, poses a significant issue for antitrust claims in the labor market to succeed. Many of the novel antitrust issues hinge on legal form, but much of that legal form was structured with product market principles.”) (citations omitted), https:// www.americanbar.org/content/dam/aba/publications/aba_journal_of_labor_employment_law/v35/number-1/poach-nomore.pdf. Tatos and Singer 33 defending its restraint, the NCAA argued that either the preservation of consumer choice or demand for “amateurism” justifies any anticompetitive effect on athlete compensation. Defense attorney Waxman proffered this cross-market justification at the recent hearing, arguing that, The question—the fact that—the procompetitive differentiation is not necessarily measured by net consumer demand. They’re—the independent value of preserving consumer choice is not the value of maximizing consumer interest. Thus, the NCAA leverages the consumer-welfare standard to argue ad absurdum that, even in the absence of consumer demand,102 the preservation of consumer choice justifies the imposition of a cartel-wide restraint on labor compensation. To be clear, that argument posits that simply generating an option for consumers (i.e., passive use value), even if the characteristics of that option do not drive demand for the product, can offset any direct labor harms. If, under the consumer welfare standard, the mere appeal to an unquantified passive use value serves to overcome direct evidence of antitrust injury and quantifiable harm to labor, then the standard is no more effective in curtailing antirust harm than a wire fence is in holding back a flood. The NCAA’s argument not only flings the door open to a deluge of anticompetitive conduct to the detriment of labor, but it also benefits from no Supreme Court precedent. Nowhere has the Supreme Court blessed the creation of market alternatives as procompetitive per se, regardless of whether any non-de minimis demand exists for them. Indeed, markets determine which products fail and succeed. For example, cable networks cancel shows that they deem unprofitable even in instances (such as Arrested Development) where substantial consumer demand for additional seasons exists. The NCAA appears to argue here that preservation of such shows would justify the imposition of wage restrictions on the labor, thus reducing costs. Notably, the Tenth Circuit rejected “mere profitability or cost savings” as a procompetitive defense in antitrust cases.103 We expect Chicago School economists and legal scholars would concur on this point. More relevant to the thrust of this article, the NCAA’s defense bestows a procompetitive justification on preferences or preservation of choice even when potentially motivated by overt or implicit racial bias rather than consumer surplus-enhancing output effects. We neither raise this potential lightly, nor are we the first to do so. Wallsten et al. (2017) found “evidence not only that racial resentment items tap racial predispositions but also that whites rely on these predispositions when forming and expressing their views on paying college athletes.”104 Certainly, a positive correlation exists between the preferences of downstream consumers of the product (fans), who are majorityWhite, and the percentage of Black athletes in those sports. Based on 2013–2014 college football bowl games and the 2013 NCAA tournament, journalist Derek Thompson found that NCAA basketball and football audiences were 80% and 82% White, respectively.105 These numbers are remarkably 102. While the NCAA has rested claims of consumer demand for “amateurism” on surveys performed by an expert it engaged in litigation, research evidence does not find such effects. Thomas Baker et al., Debunking the NCAA’s Myth That Amateurism Conforms with Antitrust Law: A Legal and Statistical Analysis, 85(661) TENN. L. REV. (2018), https:// tennesseelawreviewdotcom.files.wordpress.com/2019/03/1-baker-debunking-the-ncaas-myth.pdf. 103. Law v. NCAA, 134 F.3d 1010 (10th Cir. 1998). 104. Kevin Wallsten et al., Prejudice or Principled Conservatism? Racial Resentment and White Opinion toward Paying College Athletes, 70(1) POL. RES. Q. (2017) at 210. Id. (“More specifically, we demonstrate that racially resentful whites who were subtly primed to think about African Americans are more likely to express opposition to paying college athletes when compared with similarly resentful whites who were primed to think about whites. Because key elements of contemporary conservatism cannot possibly explain these results, we conclude that racial resentment is in fact a valid measure of antiblack prejudice.”). 105. Derek Thompson, Which Sports Have the Whitest/Richest/Oldest Fans?, THE ATLANTIC, Feb. 10, 2014, https://www. theatlantic.com/business/archive/2014/02/which-sports-have-the-whitest-richest-oldest-fans/283626/. 34 The Antitrust Bulletin XX(X) consistent with previous results from Scarborough Research, whose August 2005–September 2006 data showed that approximately 82% of college football fans were White.106 As we detail in Part I, the majority of athletes that generate the product are Black. To put a finer point on the issue, regardless of whether the NCAA’s defense lies with consumer choice or demand (or both), its claimed procompetitive justification elevates the entertainment of predominantly White consumers over the value of the labor of Black athletes. As such, true essence of the NCAA’s argument reveals itself an attempt to defend its “procompetitive” plantation. NCAA members’ blatant exercise of monopsony power to restrain wages, its disparate impact on Black athletes, its justification on the basis of some perceived consumer benefit primarily to White audiences, and the consumer welfare standard’s failure to condemn such conduct as anticompetitive have exposed a critical flaw in antitrust status quo. The concept of cross-market balancing, offsetting harms to the injured party in the relevant market with some benefit (however illusory in this case) to a party in a different market altogether, epitomizes this problem. The detrimental effects from such “balancing” become even more poignant when harmed or beneficiary party status aligns with protected class membership, as it does under the NCAA framework. In such cases, a focus on consumer welfare places its finger on the scale to the benefit of the (White) majority and at the expense of minority protected class status. Naturally, such a process not only exposes economic inequalities along racial lines but also exacerbates them. It is our position that such cross-market balancing has no place in adjudicating antitrust harm or assessing procompetitive benefits. Procompetitive benefits should be considered only within the confines of the relevant market in which the harm occurred. Indeed, the NCAA’s defense in Alston represents the reductio ad absurdum argument.107 When cross-market benefits in an undefined market—even if potentially motivated by implicit or explicit racial animus— offsets anticompetitive effects in a relevant market, a showing of net harm by the injured party would render Sisyphus’ task effortless in comparison. If such economically bankrupt defenses as the NCAA offers warrant anything more than outright rejection, one can hardly escape the conclusion that perhaps providing defensive cover for anticompetitive constraints has been the thrust of the consumer welfare standard all along. Appendix A Data Sources Used Ø The knight CAFI data: These data originate from individual reports schools submit to the NCAA’s MFRS and to the Department of Education through its IPEDS and cover three NCAA D-I subdivisions: (1) the FBS (formerly NCAA D-I-A), (2) the Football Championship Subdivision (formerly NCAA D-I-AA), and (3) the schools that do not compete in football but compete in other D-I sports (formerly NCAA D-I-AAA). Data from the latter include number of students and institutional ID, the latter of which permits matching to other data sets that use this identification number. The CAFI contains annual data covering the 2005–2019 period and details various athletic department and institutional metrics, including revenues and expenses. However, these data are limited to public institutions only, as private colleges and universities need not respond to such data requests, other than those from the Department of Education. 106. Staff, Fan Frenzy: NCAA Football Attendance Demographics, SPORTS BUSINESS JOURNAL, Aug. 30, 2007, https://www. sportsbusinessjournal.com/Daily/Issues/2007/08/30/College-Football-Preview/Fan-Frenzy-NCAA-Football-AttendanceDemographics.aspx?ana¼register_free_form_2_filled#. 107. Ted Tatos. Relevant Market Definition and Multi-Sided Platforms Post Ohio v. American Express: Evidence from Recent NCAA Antitrust Litigation, 10(2) HARV. J. SPORTS & ENT. L. 147-172 (May 2019). Tatos and Singer 35 Ø U.S. Department of Education data collected pursuant to the EADA:108 These data contain detailed sport-specific data for all coeducational postsecondary institutions in the United States, including athlete and coach count, revenues, and expenses. All coeducational institutions in the United States must respond to the annual EADA survey. Ø The U.S. Department of Education’s IPEDS.109 These data contain institution-specific information, from which we focus on the prevalence of black faculty at P5 conferences. Ø NCAA’s Demographics Database.110 For athletes and coaches, these data contain individual counts by year, race, gender, NCAA division, conference, and sport. For athletic department staff, the data contain counts by employment position rather than sport. The NCAA has recently migrated this database, formerly available in HTML to a Tableau data set. While its previous version could be exported to text easily and began with the 2007 academic year, the NCAA now limits these data to the period from 2012 to 2020 and does not permit downloading of the data set. The current format only allows individual report exports in PDF or Microsoft PowerPoint formats. However, our analysis benefits from the fact that we downloaded historical data from the Demographics Database prior to the NCAA’s migration and imposition of restrictions data exports. Our data cover the period from 2007 to 2017 by individual P5 conference and across all NCAA D-I members. The list of employees includes various athletic department employee levels such as Ticket Manager, Sports Information Director, Academic Advisor, and so on. The granular nature of these data permit a clearer view of the racial demographics in employment at college athletic departments. Ø The Dallas Morning News College Football Salary Data Set111—This data set contains position-specific salary information for the 2015 academic year primarily covering football staff at members of the SEC and Big 12. Authors’ Note The authors have received no compensation, either actual or implied, related to this article. Responsibility for any errors or omissions remain those of the authors. Acknowledgment The authors would like to thank David Berri for his helpful comments. Funding The author(s) received no financial support for the research, authorship, and/or publication of this article. 108. 109. 110. 111. Equity-in-Athletics Disclosure Act Database, https://ope.ed.gov/athletics/. EADA Integrated Postsecondary Education Data System, https://nces.ed.gov/ipeds/use-the-data. NCAA Demographics Database, https://www.ncaa.org/about/resources/research/ncaa-demographics-database. Dallas Morning News College Football Salary Search Dataset, http://res.dallasnews.com/graphics/2015_04/ collegesalaries/.

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