Arnold Ventures is a philanthropic foundation dedicated to tackling some of the most pressing problems in the United States with one overarching goal: to maximize opportunity and minimize injustice. Through this biweekly series of white papers with leading thinkers, Arnold Ventures examines the challenges facing college athletics and raise critical questions about the future of college sports. We are grateful to partner with AthleticDirectorU to continue this conversation. Learn more here.
Why Power 5 Football Athletes Drive The Case For Compensation
The introduction of compensation for college athletes should begin here and should have been front and center in the college sports redesign conversation taking place over the last year. While much of the energy around athlete compensation has focused attention nationally on the NCAA, the location of power and media rights money in college football is at the conferences, and especially with the Power 5 conferences. This is also where university presidential power for effecting change resides.
The NCAA has made clear its opposition to athlete compensation and has maintained what the association considers to be a hard-line commitment to “No Pay” as a nonnegotiable guiding principle throughout the constitutional convention process. “No Pay,” however, has become a meaningless-at-best, disingenuous-at-worst, and quite possibly soon-to-be-ruled-illegal objective that in real application simply works to place an artificial anticompetitive restraint on athlete compensation. The case for athlete compensation most likely to convince university presidents rests with football athletes in the Power 5 conferences.
For compounding reasons, including the external forces of global and domestic industry competition and federal government intervention, university presidents must confront the reality of athlete compensation today. Running hypothetical models of various payment schemes needs to start now, and the universities of the Power 5 conferences should make a focus on football the first priority. That said, defenders of “No Pay” will similarly need to conduct a robust study demonstrating the disastrous effects of pay for play, if they want to hold the line. There has never been a clear or detailed explanation from the NCAA or member schools explaining what exactly would be the bad or ruinous result should athletes begin to receive a greater portion of the revenue their athletic performances generate. If there is a case to be made, it needs to happen now.
A. Why Football
College football is a uniquely powerful American institution. Football is a sport apart. The game evolved out of the rules of soccer and rugby and into a distinctive American game at the turn of the twentieth century, on the campuses of American universities. The place of commercial growth in these foundational years was the college game; only later did professional leagues grow to match the college game’s financial and cultural power.
College football is a uniquely insular American institution. The game is played in one country, by athletes from one country. This has allowed American football to develop in a way that has been unique in world history, and without having to give much consideration to outside sports business trends, including labor advancements, like paying players or recognizing unions. The professional sports space that shares most in common with college football is not professional American football but the professional soccer football clubs of England and Europe, born in the same historical moment and holding similar community-serving values. But while soccer quickly became a global game, American football became a core feature of American exceptionalism rhetoric of the twentieth century, and its presence on the campuses of institutions of higher education allowed it to develop a peculiar critical tension: structuring the sport as an educational program for athletes while running and growing it like the business it is for everyone else. Any attempts at establishing guardrails to protect the educational mission by limiting business growth, however, have either been overthrown by the schools themselves or ruled violations of antitrust law by the courts.
Football has always been the driving force behind American college sports policy. At the institutional level, athletic departments first developed around the sport, and although an individual institution might have enjoyed other popular sports programs, football has always been the core priority. At the national level, the NCAA was born out of a football crisis, and the modern bureaucracy and national college athletic policy established by Executive Director Walter Byers during his tenure in the crucial decades of the 1950s through the 1980s were designed with football primarily in mind. Athletic directors and football coaches have always been the powerbrokers in college sports, with conference commissioners joining their ranks at the turn of the twenty-first century.
Crucially, football’s economic and cultural power derives from its critical role in serving the industry of American higher education. This has given football far more power and value beyond the world of intercollegiate athletics. Since the mid-twentieth century, football game day has served as the most potent symbol in the American imagination of what it means to go to college. American higher education has increasingly been shaped by an awareness that what universities are selling is a college experience, only one part of which involves academic learning. Because of this, football serves the industry of higher education as much as, or even more so than, the industry of big-time college sports. And college football, of course, serves industries in the United States beyond intercollegiate athletics and higher education, driving local economies and fueling college towns.
B. Why the Power 5 Conferences
The Power 5 conferences have spent the last decade solidifying their control over college football. They now collectively represent a 4-billion-dollar-per-year industry, thanks to structural changes in college football over the past decade. University presidents have celebrated the conference commissioners who have successfully brought college football into the twenty-first century by adopting global sports business practices. But they haven’t gone all the way there. Power 5 football instituting athlete compensation will be the final step.
Rising athletic conference power is a story of rising college football money and power. The story of rising college football money is part of the global story of rising live sports and media rights. The price of purchasing media rights to broadcast live sports has increased dramatically over the past ten years. With new streaming companies that have disrupted traditional TV broadcast networks, sports have become the most important and popular remaining type of program people still watch live. This has worked to raise the value of media rights for sports leagues and teams, because media companies know they will be able to sell advertising slots at high prices because those companies want to air ads during a program that will receive more eyes and one that viewers cannot skip over by fast-forwarding. Meanwhile, streaming platforms have entered the live sports scene, aggressively bidding on broadcasting rights, knowing that sports fans will sign up for the platform when it is the only place to watch their team. And traditional broadcast networks that have developed their own streaming platforms know that placing key games on them will increase subscriptions too.
Schools and their conferences have always desired control of football. Historically, football power had rested with them, that is, until Walter Byers’ NCAA expanded its bureaucratic structures and enforcement powers, and established control over television rights. Since the advent of NCAA Football TV in the 1950s, the top 65 or so schools (generally those that now make up the Power 5) wrestled to reclaim their football economic autonomy. Then they called themselves the College Football Association, and led by Oklahoma and Georgia, took the NCAA to court, seeing NCAA TV as a violation of antitrust law.
Once the top football schools busted the NCAA’s TV monopoly (enabling schools and conferences to negotiate their own TV deals), they have been able to grow the money and claim increasing control ever since, launching the Bowl Championship Series in 1996, and the College Football Playoff in 2014. The five most powerful conferences hold a precarious alliance. They benefit from acting together but compete with each other for talent and to maximize market reach and value. Conference realignment, such as when the Big Ten brought in Rutgers (NYC market) and Maryland (DC), is TV market expansion.
College football has benefited greatly from the rising value of sports media rights. The Power 5 conferences’ collective revenue, just shy of $4 billion annually today, was only $2.1 billion in 2014-15. Over the next six years, from 2014 until the start of the coronavirus pandemic, the Power 5 experienced a remarkable rate of growth, increasing by an average of $252 million each year.
But the story of rising college football power is explained by more than the increased value of media rights. This is also a story of the consolidation of money and power by the Power 5 conferences thanks to their 2014 autonomy move and the launch of the College Football Playoff, which happened to enjoy the brilliant yet coincidental timing of happening in tandem with the broadcast media disruptions that elevated the market value of sport.
The autonomy move was not presented as an aggressive act to consolidate money and power but constructed as the solution to an existential crisis. The summer of 2014 presented a challenge to big-time college sports comparable to the summer of 2021: Congressional hearings in the aftermath of the UNC academic fraud, unionizing energy among Northwestern football and the national #AllPlayersUnited movement, the O’Bannon v. EA Sports and NCAA federal case, and a racial reckoning in support of Black lives in both college sports and broader society.
A cynical read would be that the Power 5 leveraged the crisis to create the conditions for the group’s rise, but in the moment, these conferences and their school leaders reasoned that only they could afford the high cost required to increase athlete benefits – basically adopting all the planks in Northwestern quarterback Kain Colter’s platform – and that the association had better quickly reorganize to give them enough space and the authority to act independently to do so. These new measures included a return to four- and five-year athletic grant-in-aid (replacing one-year renewable grants), lifetime scholarships (or the ability for athletes who leave school in good academic standing, say, by turning pro, to return at any time to complete their degree), increased medical care and coverage, more athlete representation in governance, and, with a little more work to make it happen, cost-of-attendance stipends that would bring athletic scholarships in line with other student scholarship opportunities.
C. Why Football in the Power 5 Conferences
The cleanest and clearest case for athlete compensation rests with football athletes in the Power 5 conferences. Schools have been successful in their effort to separate out football from the rest of their intercollegiate athletics programs—geospatially on their campuses and in organizing their finances and reporting to the Department of Education for Title IX compliance. The schools’ conferences have been successful in their effort to separate football from NCAA governance and finances and adopt twenty-first century sports business practices to grow the market value and financial rewards. Considering the decades long opposition by schools despite the progressive chipping away at the “No Pay for Play” line and despite the fluidity of that “No Pay” line, going narrow with the group most deserving by introducing athlete compensation for football athletes in the Power 5 conferences is the appropriate and responsible place to begin.
The Knight Commission on Intercollegiate Athletics has published a series of strong recommendations to restructure college sports, including a proposal to establish a new and independent National College Football Association by cutting all remaining loose ties to NCAA governance and financial stakes with Division I championship division football. Although the Knight Commission does not go there, recommending football athlete compensation is the logical and practical next step. The report instead recommends a larger portion of football money allocated to benefits and programs to serve all athletes within an intercollegiate athletics program. But because of the unique and separate structure and financial and cultural power that makes football a sport apart, football money should stay with football athletes.
Encouraging schools to spend more money on athletes through the benefits they receive, but without revenue sharing and paying money directly to athletes will not end the practice of irresponsible spending that has plagued college sports in the twenty-first century. Ironically, instituting paid labor could very well be the thing to end the audacious, outrageous spending of the last two decades. We have seen what the conferences’ collective average $252 million annual increase (before the pandemic) has resulted in: escalating coaches’ salaries (across the board, from head coaches all the way down, and across all sports), facilities arms races, and athletic department staff explosions.
While the economic growth of big-time college sports has temporarily stagnated during the coronavirus pandemic, the pandemic itself has proven that Power 5 football is an industry apart and has provided a crucial lesson that must not be forgotten: Football athletes are workers. During the 2020 football season they were essential workers. Two of the Power 5 conferences, the Big Ten and the Pac-12, released statements in the summer of 2020 that all fall sports would be postponed and played in the spring of 2021. Full stop. Yet both conferences ended up walking this back and commencing with play in the fall, but only with the sport of football. No act has more clearly exposed as myth the idea—and the idea so crucial to upholding “amateurism” or what is now called “the collegiate model”—that all sports are the same and therefore all athletes are deserving of the same benefits. The anticipated athletic department budget shortfalls, anxieties around enrollment and retention, and the perception of a recruiting disadvantage and resulting competitive and financial hits after the other Power 5 conferences greenlit the fall season proved that football athletes were essential to the businesses of intercollegiate athletics and higher education. Correspondingly, the hundreds of sports teams cut by universities were simply collateral damage, ancillary to the core business of football and therefore expendable. If ever there was a moment to expose the rotten business model of big-time college sports, it was the coronavirus pandemic, and especially the business decisions made by Power 5 conferences and their universities in 2020.
Going forward, we should recognize this era of irresponsible spending from 2014 to 2022 as a bubble that must be burst. It is not, however, that the value of the product was artificially inflated, because it was not. The money will remain, but its allocation must include a greater portion of the pie going to football athletes. If spending on coaches’ salaries, unnecessary facilities expenditures, and athletic department staff decreases, so be it.
About The Author:
Victoria Jackson, Ph.D., is a clinical assistant professor of history and sports historian at Arizona State University. She is a former NCAA champion and professional track and field athlete and has written extensively about American college sports.