The NCAA Is Trying to Hustle Congress for an Antitrust Exemption

When the NCAA lost the O'Bannon case earlier this year, federal judge Claudia Wilken made one thing clear to the much-maligned organization: You're in trouble. While she didn't completely transform college sports into a free market for athletic talent, her ruling and limited injunction provided a stern warning that the association's traditional defenses of college sports amateurism would not continue to hold up in antitrust court.

With additional lawsuits looming—including one led by fearsome sports litigator Jeffrey Kessler that essentially seeks free agency for campus athletes—and a so-far successful unionization bid by Northwestern University football players currently under federal review, NCAA amateurism increasingly is running afoul of the law. Yet rather than adjust or eliminate the current rules of the college sports economy (no to salaries, endorsements, booster cash handshakes; yes to all the snacks you can eat!) in order to comply with the federal judiciary and the National Labor Relations Board, the association has a better idea.

Make an end run to Capitol Hill, and try to change the law itself.

According to reports, the NCAA has been exploring the possibility of obtaining a Congressional antitrust exemption, much like the one enjoyed by Major League Baseball. Is that an implicit acknowledgement that the association's policies against athletes receiving any form of compensation blatantly violate antitrust law? Of course. But never mind that. As NCAA president Mark Emmert recently told the Wall Street Journal, a campus amateurism exemption could be a political winner:

NCAA president Mark Emmert acknowledged the discussions about an exemption and said he could envision winning political support for such a move.

An end to amateurism "would be the end of college sports as we know it," Emmert said in a recent interview. "There is strong interest in the American populace to preserve this and anything that destroys it would be met with great resistance."

For the NCAA, an exemption would be nothing short of a Washington bailout, a business model-preserving, status quo-maintaining giveaway akin to what Wall Street received during the financial crisis. As such, the association appears to be putting a lot of its eggs in that basket. Through early August of this year, the NCAA spent $240,000 on lobbying according to Open Secrets, and it spent more in the first half of 2014 than it has ever spent in a single year. Indeed, the non-profit organization that claims to put all of its money back into supporting athletes is on pace to spend $500,000 this year—all to make sure that the people it profits off never pocket a free market cent.

Fortunately for college athletes, the NCAA has almost no chance of getting Congressional help.

Look, it's easy to see why Emmert and other college sports powerbrokers believe otherwise. Generally speaking, the public does not support paying college athletes. The NCAA wants to keep it that way. By reinforcing romantic notions of big-time, big-money college sports as innocent bastions of school spirit and playing for the love the game—untainted by filthy lucre, unless said lucre ends up in University of Alabama football coach Nick Saban's checking account—the association offers the public an emotional carrot; by asserting that allowing players to be paid would result in a college sports doomsday of competitive imbalance, smaller sport cutbacks, and athletes who don't go to class, the NCAA threatens the same public with an apocalyptic stick.

While these arguments can be easily refuted with simple economics, some members of Congress seem to be buying in. When the House of Representatives' Education and the Workforce Committee held a hearing in May on the topic, Rep. Phil Roe (R-Tenn) stood up and proudly exclaimed that paying players was a bad idea because he "just pulled up on my iPad that most schools lose money" on sports. Again, this can be invalidated by simple economics—many schools are trying to enter Division I sports, not leave, and since when do rational businesses expand into money-losing industries?—but the NCAA reps at the hearing just nodded in approval. Ignorance drives their case, particularly when uninformed-yet-prominent speakers such as Roe continue to push the company line.

"I think it's going to be the end of college athletics as we see it," Roe told ABC News.

Besides legislators and lobbyists, the NCAA has allies on and around Capitol Hill to make sure their position is constantly reinforced. Case in point? Baylor University president Ken Starr—the former Solicitor General of the US under President George H.W. Bush, a man best known for leading the endless, largely-pointless federal probe into President Bill Clinton that culminated in MonicaGate—testified on behalf of the association and in favor of amateurism at the above House hearing. Starr is influential in Washington ,and he told the New York Times that he "enjoys the arena." People like him give the NCAA a home field advantage within the halls of Congress, and big state schools and prestigious private institutions carry far more weight with the average Washington politician than athletes' rights advocates such as former University of California, Los Angeles football player Ramogi Huma.

The NCAA also knows that even though many politicians are skeptical of its oft-ridiculous rules, few of them are likely to challenge its core assertion that amateurism is necessary for education. Despite evidence that schools such as the University of North Carolina are far more concerned with keeping talented athletes eligible than with teaching them anything, the American public—that is, the people who vote for skeptical politicians—are still besotten by the twin NCAA myths that campus sports stars like Jamies Winston are first and foremost students who just happen to play sports, and that students who just happen to play sports would be worse students with money in their pockets. It's a laughable sentiment, but also powerful: when Wilken issued an O'Bannon ruling that limited men's college basketball and football players to receiving $5,000 a year in deferred compensation, she cited the NCAA's claim that making money could harm athletes' academic pursuits.

Emmert and company have a final reason to think Congress may offer them a Get Out of Antitrust Jail Free Card: historical precedent. For odd, likely unethical reasons, MLB has a full-blown antirust exemption. The NFL enjoys special sports broadcasting rules. Leagues with drafts, salary caps, and other market-restraining, competition-stifling features that would otherwise violate antitrust law also have been protected, albeit for a good reason: those same leagues collectively bargain with their athletes, giving them a seat at the table.

By contrast, the NCAA and its member schools are alone at the college sports table. They want to keep it that way. When Northwestern football players petitioned to unionize, the school fought it hard (and lost). Though the association wasn't a party to the case, it also strongly opposed the notion that students—well, at least the students who are good at throwing footballs—can also be considered school employees, with the right to bargain for better medical coverage and a direct cut of the millions of dollars their labor generates.

Of course, this is where the NCAA's exemption fantasy first begins to crumble. Antitrust laws exist to ensure no party has an unfair amount of economic control—but total economic control is exactly what schools refuse to give up. That won't fly in Washington. Some politicians seem sympathetic to the notion of de-commercializing men's football and basketball, returning college sports to a simpler, more innocent era that never actually existed. Economist Andy Schwarz has dubbed proponents of this approach "Team Reform," and the problem with their plan is that the association itself won't adopt it. Schools aren't about to give up tens of millions of dollars and the associated educational advertising and brand-building benefits of big-time sports in order to operate like larger-scale Division III programs. They want money flowing into the system, not out. Congress knows this. "We're not going to go back to world where money is taken out of this process," Rep. Luke Messer (R-Ind.) told ABC News. "The question becomes how we best allocate those rewards."

At the House hearing, Republicans in particular sounded sympathetic to the idea of saving NCAA amateurism in order to save college sports. Thing is, there's a difference between high-profile hearing rhetoric—union-busting is pure red meat for conservative pols—and actual action. Let alone meaning what you say. When Congressional discussions expand from beating up on organized labor to discussing things like fairness for athletes, the NCAA loses its Red State base. Sen. Dean Heller (R-NV)—a friend of USC athletic director Pat Haden, no less!— made that clear during the Senate Committee on Commerce, Science and Transportation's summer hearing on college sports, as he and his fellow committee members grilled Emmert on the NCAA's failure to adapt.

"Let's face it, some Universities, either through their conference or by themselves are bringing in millions of dollars from television contracts and licensing rights," Heller said. "With so much money coming in, and the NCAA's failure to reform their rigid rules, the NCAA has now been accused of making money off these players and exploiting them … and the NCAA has done themselves no favors. There have been recent decisions that just do not make any sense."

Not exactly a wholehearted endorsement of the college sports status quo. Republicans may be anti-union, but they're also (at least in theory) pro-free market. Amateurism isn't necessarily an easy sell. And even if the NCAA could convince members to back an exemption, the association would have to offer something in return. Washington runs on horse-trading, not something-for-nothing. What would the Congressional ask be? More oversight, likely. More regulation. A loss of school control. The exact opposite of why the NCAA wants Congressional help in the first place. It's why the association's own lawyers have advised the organization to pass on a federal bailout—at least according to University of Hartford president Walter Harrison, the former chairman of the NCAA executive committee.

"At what spot does Congress decide to get involved?" Harrison told the Hartford Courant. "When I chaired the executive committee, we asked our outside counsel to explore an antitrust exemption [like MLB]. They came back and recommended we not seek one. They weren't certain the NCAA could get it and also, once you ask, you open it up to all kinds of regulatory possibilities."

Also at stake? Winning elections. Congressional members have proven time and again that they can and will get nothing done if it helps their political agenda. That could be the case here. Consider: would a representative in Alabama be willing to come out against athlete compensation if their opponent in the next election pointed out that the rules against paying players are actually holding Auburn and Alabama back on the field?

Polls show that the majority of the public still opposes paying athletes, but those numbers are shrinking—especially depending on how the question is framed. Moreover, it's unlikely that college sports would become less popular if athletes were paid: tennis dumped amateurism decades ago, and the sport has only grown richer and more popular since. In the O'Bannon trial, the NCAA submitted the results of a paid-for survey purporting to show that paying athletes might make people less interested in campus sports; Wilken dismissed the evidence, and an expert called it "an embarrassing junk science question."

With the above in mind, and given the potential for voter backlash, why would Congress take on something as high profile and controversial as making amateurism a matter of federal law?

The NCAA is betting that they will, and that wager perfectly demonstrates how the organization overvalues its place in society. It's not arrogance as much as it's ignorance. For decades, the NCAA has operated in a bubble where people accept its rules as fair without question. College football is the center of its bubble, and many of the people inside are intent on preserving the fading, ever-changing concept of amateurism.

But outside of that bubble is a world where people believe college football's place in society shouldn't afford it special rules. The NCAA does best when the public doesn't think too hard about how their March Madness sausage is made. The more people know—thanks to former University of Connecticut guard Shabazz Napier speaking out, or ESPN analyst and gadfly Jay Bilas tweeting—the worse the association looks. Wilken scoffed at NCAA arguments that amateurism for amateurism's sake justifies collusive limitations on athlete pay, and the regional director in the Northwestern decision seemed downright baffled by the entire college sports economy, as SB Nation's Patrick Vint wrote:

Ohr's opinion reads like that of someone who has not watched college football for one minute of his life, was told the basic premise for the sport's existence and amateurism rules, and rejected all the inherent contradictions.

If the NCAA asks Washington for a bailout, it's likely to confront this sort of thinking, and in the process learn a harsh lesson: enjoying college sports may be important to American society, but saving amateurism isn't. Why would Congress feel any differently?