Julia Mattingly is a staff writer and first-year Ph.D. student.

In the dynamic realm of collegiate athletics, a crucial moment is unfolding as the National Collegiate Athletic Association (NCAA) appeals to Congress to navigate the future of college sports. Amid recent legal rulings, legislative challenges and shifting attitudes toward athlete rights and compensation, the NCAA is urging Congress to prevent the classification of student athletes as employees and their potential unionization — a shift that could fundamentally change the landscape of college sports.

For years, the NCAA and its member institutions have maintained that college athletes are students first and athletes second, contending that they voluntarily participate in sports and should only receive compensation through scholarships. In the 1984 case NCAA v. Board of Regents of the University of Oklahoma, the Supreme Court invalidated the NCAA’s television plan,which limited ABC and CBS to air only 14 live football games per season in an effort to maintain live game attendance. The Supreme Court found the NCAA’s plan in violation of antitrust laws, but established that regulations governing college athlete eligibility standards are subject to a less stringent analysis than other antitrust cases. This distinction allowed the NCAA to justify limiting athlete compensation to preserve competitive equity and differentiate college sports from professional leagues. Despite this, the efforts of countless unpaid student-athletes have propelled collegiate football and basketball into billion-dollar industries, characterized by lucrative TV deals, major endorsements and highly anticipated events like the College Football Playoff and NCAA March Madness. 

Legal Challenges and Shifting Attitudes

Though the NCAA has been around for over a century now, until recent years they haven’t faced much resistance from student athletes regarding their employee status and the right to unionize. In 2019, however, several Division 1 football and basketball players filed a lawsuit against the NCAA, asserting that its restrictions on “non-cash education-related benefits” violated antitrust laws under the Sherman Act. The district court ruled in favor of the athletes, requiring the NCAA to permit certain academic benefits but maintain its authority to restrict cash or cash-equivalent awards for academic purposes. The U.S. Court of Appeals for the Ninth Circuit upheld the decision, acknowledging the NCAA’s interest in amateurism while concluding that its practices breached antitrust laws.

In the Supreme Court’s unanimous ruling in NCAA v. Alston in 2021, they affirmed the Ninth Circuit’s ruling that the NCAA’s rules restricting certain education-related benefits for student-athletes violate federal antitrust law. This landmark decision upended the economics of college sports by affirming that schools could not prohibit students from earning money from name, image and likeness (NIL) deals, which is an agreement or arrangement between a student-athlete and a third party, such as a brand, company or individual, where the student-athlete receives compensation for the use of their name, image and likeness. Interestingly, Justice Brett Kavanaugh wrote the concurring opinion in which he highlighted the inconsistency of the NCAA’s position, emphasizing that college sports should not be exempt from ordinary principles of antitrust law. He criticized the NCAA’s practice of not paying athletes a fair market rate while generating billions of dollars in revenue from their talents.  

In the aftermath of the Alston ruling, state legislatures across the country scrambled to get NIL laws on the books, partly to regulate a new economy and partly to stay competitive in recruiting against schools in regions with more favorable NIL policies. As of January, 31 states and D.C. have enacted NIL laws. In these jurisdictions, both the NCAA and state legislatures have outlined regulations for college athletes and their institutions to adhere to regarding NIL activities. However, in the 18 states without state legislative direction, the NCAA’s NIL guidance remains the sole set of rules governing the monetization of publicity rights for college athletes. 

The complexity of this regulatory environment has underscored the need for federal intervention to establish a uniform NIL standard and provide clarity for athletes, institutions and stakeholders. Federal policymakers have held at least 10 hearings over the past two years to address NIL issues and have introduced multiple bills aimed at regulating these deals. However, lurking in the background of these discussions is the NCAA’s fear that courts and federal agencies may soon treat college athletes as employees, opening the door to unionization and fundamentally altering the collegiate sports landscape.

Uncertain Futures: Navigating the Intersection of Policy, Unions and College Sports

To make matters worse for the NCAA, the past decade has brought about a surge of labor activism on college campuses, with its influence extending to the undergraduate level. Student employees across a range of positions have formed unions at over 12 institutions within 2023 alone. Among the interested groups are college athletes, whom the NCAA increasingly concerns will soon unionize en masse. Most recently, in September 2023, members of the Dartmouth College men’s basketball team filed a petition seeking recognition as a labor union with the National Labor Relations Board. If granted by NLRB, Dartmouth’s basketball team would be the first student-athlete union in the country. This prospect is strongly opposed by Dartmouth College, which urged the NLRB in a hearing to reject the petition and preserve the students’ nonemployee status, as the college would lose money otherwise.

This opposition is not unheard of; among the many concerns the NCAA has with the potential employee designation is the disproportionate effect it would have on smaller institutions that do not generate much profit off of their sports programs. While schools within the  “Power Five” conferences operate highly lucrative teams, there are several Division I institutions whose teams do not generate sizable revenues for their schools — in fact, the vast majority of Division I athletic programs report net losses. In 2019, only 25 of 130 schools in the high-grossing Football Bowl Subdivision (FBS), whose members are large, mostly public universities, reported positive net revenues.

Conversely, out of the total revenue of $15.8 billion generated by the NCAA’s Division I athletics enterprise in 2019, only $2.9 billion (18.2%) went back to student athletes through scholarships, with a mere 1% earmarked for medical treatment and insurance protections. Another 35% was dedicated to administrative expenses and coach compensation, while 18% was invested in extravagant facilities.

In order to preserve the financial discretion of its member institutions, the NCAA’s president, Charlie Baker, has urged Congress to codify current regulatory guidance into law by granting student-athletes special status that affirms they are not employees of their institutions. The NCAA has warned that Congress’s failure to act could jeopardize the fiscal health of college athletics programs and even impact America’s ability to compete in international competitions like the Olympics. However, with ongoing wars in Ukraine and Israel, the southern border crisis and the upcoming 2024 election, Congress has been preoccupied with other policy priorities, and there is a chance that the NLRB may get to this issue before legislators do. 

In November, NLRB hearings began over unfair labor practice charges against the NCAA, the University of Southern California and the Pac-12 Conference. The case concerns whether the three entities jointly employ student football and basketball players and whether the players were illegally misclassified as “non-employee student-athletes.” The hearings are expected to conclude this month and a ruling is expected in the coming weeks.

In the meantime, NCAA President Baker sent a letter in December to the association’s Division 1 members presenting a new proposal to establish a separate division for the wealthiest athletic departments. This division would facilitate the payment of athletes through an “enhanced educational trust fund.” According to Baker’s plan, member institutions would be able to allocate a minimum of $30,000 annually to an equal number of male and female athletes, ensuring compliance with federal Title IX gender equity regulations. Though this proposal would allow for the compensation of athletes and effectively bridge the widening financial disparity between the most affluent Division I schools and their counterparts, the NCAA would still not categorize athletes as employees of their respective schools. 

Nonetheless, as Congress weighs its priorities amidst pressing global and domestic issues, the fate of student athletes and the NCAA’s regulatory framework remain uncertain. The culmination of NLRB hearings and the implementation of NCAA’s proposed reforms will undoubtedly shape the trajectory of collegiate athletics for generations to come, impacting athletes, institutions and stakeholders alike.

This piece was edited by Deputy Editor Kathleen Bever and Executive Editor Nathan Varnell.

Photo courtesy of Jacob Rice at Unsplash.