Earlier in 2015, after years of debate, the NCAA allowed its five largest conferences to pay athletes stipends that fund attendance costs not covered by scholarships and limited to tuition, room and board. Now, the NCAA faces a possible challenge to its long-standing policy of not paying its players.
A federal judge is considering whether to grant class-action status to lawsuits by current and former college athletes hoping to abolish the NCAA's prohibition against competitively paying players. U.S. District Judge Claudia Wilken in Oakland, California, will hear arguments on whether related lawsuits should proceed as class-action cases. If the judge blocks the lawyers from bringing the class-action, the case will be a nullity. However, if she grants the case class-action status, the NCAA would face increasing pressure to settle rather than risk a verdict that could transform its current non-free market business model.
The outcome of this challenge could lead to not only massive financial implications ranging in the billions of dollars, but also may determine whether college-level play and competition can be balanced. Outside of college athletics, economic competition is considered good for society--leading companies to compete to hire the best workers, make prices affordable, paying employees better, etc.
The current NCAA model provides a level playing field among schools and their teams. However, many have criticized the model for hindering the normal competition that exists within a sports market.
Former Clemson football player, Martin Jenkins, and two others have filed suit attempting to strike down any compensation limits for players and permit a full competitive market to arise. The attorney representing Jenkins, Jeffrey Kessler stated that "These are just educational institutions who have decided to go into a business [and] [t]hat's perfectly lawful, but you don't get to conspire not to pay your workers anything in that business."
The NCAA defends its rules as upholding a tradition of amateurism. It has stated that the big-money athletic teams also help support less popular college sports and can boost educational budgets. It claims that while star athletes would most likely be paid more money in a competitive market, economists hired by the NCAA say less-talented athletes could receive less, and schools might discontinue some unprofitable teams.
However, many lawyers and economists disagree with the NCAA, which has reported $872 million in revenue in the 2011-2012 school year. Additionally, TV rights for the NCAA men's basketball tournament and football bowls provide at least $18 billion in revenue, most of which gets distributed to schools and conferences.