Today’s guest columnist is Rick Burton of Syracuse University.
In Michael Lewis’ great 1989 book, Liar’s Poker, he wrote about working on Wall Street and learning to look away from events everyone else was focused on and instead find the more efficient way to monetize the situation. If there was a tsunami washing up in Japan, Lewis learned to buy stock in Midwestern sandbag manufacturers.
That’s where a discussion of NCAA collectives come in. We are suddenly reading about ungoverned, unregulated booster groups creating LLCs built around the concept of giving benefits to athletes flexing their newly minted NIL muscles. Think of Oprah going to Texas A&M or Tennessee and saying: “You get a car. You get a car. You get $50,000. You get a lake house.”
Or as Mississippi football coach Lane Kiffin recently suggested: “These [college] kids are 17 and 18 years old. They’re going to go where they’re paid the most. I’m not complaining, it just is what is. Wherever there’s things created, there’s a lot of times problems [pop up that] people didn’t think about.”
At the heart of Kiffin’s interview was the reality his academic institution might not have a “collective” as big as that of the Alabama Crimson Tide’s, Texas Longhorns’ or Florida Gators’. The Gator Collective reportedly was the first to become an official partner for a university and probably paid the University of Florida athletic department something approaching six figures. Kiffin seemed to suggest the Rebels will have NIL money for their players, but little Ole Miss may not pay out as much as others.
Choosing his words carefully, Kiffin’s preemptive strike allowed him (the coach earning $7.25 million annually) to tell his boosters to either pony up more NIL cash or accept losing future SEC football games.
But as Florida attorney and NIL advocate Darren Heitner says: “The NCAA’s inability to govern the forces driving transfers, NIL, collectives, coaching salaries brought us to this moment. The money has to go somewhere. It used to all go to the athletic departments. Now, some of it is going to start flowing to the players.”
This is where Michael Lewis’ gambit comes in. What if all of us who are running around hollering about how collectives, NIL, the NLRB and the transfer portal will destroy college sports are looking at the wrong thing? Is it possible collectives and NIL deals for college athletes are not the most pressing issues?
What if, in a Sun Tzu Art of War way, the NCAA actually wanted a no-holds-barred free-for-all? That they want the wild rumpus to start, hoping big school collectives will destroy the college sports world? Are they thinking such a costly battle would cause Congress to intervene?
One of Sun Tzu’s more famous lines is, “If you know the enemy and you know yourself, you need not fear the result of 100 battles.” The NCAA has lost more than a few battles lately, and there is a possibility the association (or its most influential university presidents) have selected Sun’s military strategy. Keep doubling down until you win.
Think about it: The NCAA knows itself well. It just needs to identify its enemies.
Is it journalists? Probably not. Sport and media have always made great symbiotic bedfellows. Is it athlete greed? That’s laughable. Is it capitalists?
That last question warrants review, because right now college sports is more commercially capitalistic than anything evident in the pros, where salary caps and collective bargaining agreements hold the capitalists in check. This new NCAA world doesn’t feature those restraints, and it’s creating something investors call a “superbubble”—a wild, profitable, short-term ride. The kind that’s often followed by a bruising market correction.
As British investor Jeremy Grantham wrote: “As bubbles break, they crush most of those dreams and accelerate the negative economic forces on the way down. To allow bubbles, let alone help them along, is simply bad economic policy.”
Boston College economics professor Bob Murphy sees it like this: “Unregulated markets and low barriers to entry can lead to a situation where early and nimble entrants do well and take market share, leading to concentration and a ‘robber barons’ outcome. It emerges as unfettered capitalism.”
Is that what we see?
With no guardrails on NIL activity for NCAA athletes, and no one able to prevent the creation of collectives, the college marketplace is offering up a feeding frenzy for approximately 500,000 player-entrepreneurs. They can sell themselves (it will be called “opting in”) to collectives or to any entity for any amount. To stop them risks lawsuits.
Said another way, the collectives can give any amount to any favored athlete in the name of helping the home team win more games. Originally, the NCAA said these collectives weren’t supposed to conduct any pay-for-play schemes nor induce athletes to attend a school in return for untold riches. But since then, NCAA president Mark Emmert has acknowledged the NCAA’s regulatory abilities are muted.
That means we’re letting the “wild things” run rampant, hoping it may eventually lead to a solution. If so, it’s conceivable the NIL bubble is being allowed to expand with the knowledge it will break at some point, and the college-athlete version of Max (the child in Maurice Sendak’s Where the Wild Things Are) will return to his dorm room, thankful to find nothing more than a hot meal.
That day now seems unlikely. So, until this matter works itself out, athletic directors and conference commissioners better make sure they know where to buy sandbags.
Rick Burton is the David B. Falk Professor of Sport Management at Syracuse University where he serves as that school’s faculty athletics representative to the ACC and NCAA.