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In reply to the discussion: Friends raised money for a gay college athlete after her parents disowned her. Then the NCAA called. [View all]JonLP24
(29,322 posts)Where a judge ruled they had to pay workman's comp for a football injury. They only give one year scholarships so coaches can abuse their athletes by threatening to take it away from them.
Monopsony in College AthleticsPosner
Monopsony in College AthleticsPosner
The most common type of cartel is an agreement among competitors not to sell their product below a fixed price that will generate monopoly profits for the parties to the agreement. But another type of cartel, termed monopsonistic (from the Greek words for one and purchasing of food) rather than monopolistic (one seller, versus one buyer in a monopsonized market), is an agreement among competitors not to pay more than a fixed price for a key input, such as labor. By agreeing to pay less, the cartel purchases less of the input (and perhaps of lower quality), because less is supplied at the lower price (and suppliers may lower quality to compensate, by reducing their costs, for the lower price they receive).
The National Collegiate Athletic Association behaves monopsonistically in forbidding its member colleges and universities to pay its athletes. Although cartels, including monopsonistic ones, are generally deemed to be illegal per se under American antitrust law, the NCAAs monopsonistic behavior has thus far not been successfully challenged. The justification that the NCAA offersthat collegiate athletes are students and would be corrupted by being salariedcoupled with the fact that the members of the NCAA, and the NCAA itself, are formally not-for-profit institutions, have had sufficient appeal to enable the association to continue to impose and enforce its rule against paying student athletes, and a number of subsidiary rules designed to prevent the cheating by cartel members that plagues most cartels.
As Becker points out, were it not for the monopsonistic rule against paying student athletes, these athletes would be paid; the monopsony transfers wealth from them to their employers, the colleges. A further consequence is that college teams are smaller and, more important, of lower quality than they would be if the student athletes were paid.
https://www.becker-posner-blog.com/2011/04/monopsony-in-college-athleticsposner.html
NCAA members behave like a buyer cartel and use the bylaws of the NCAA to maintain their collusive agreement. We model the NCAA as a collusive monopsony and demonstrate the impact on compensation and employment for student athletes, as well as the consequences for social welfare and distribution of surplus. Then we identify specific NCAA bylaws that restrain competition among cartel members, such as limits on the number of athletic scholarships awarded, recruiting, player transfers, and athletic housing. Lastly, we discuss the effects of the NCAAs recent move to lift the restriction on contract durations for student athletes and the recent Agnew antitrust litigation which may have precipitated this change.
https://journals.sagepub.com/doi/full/10.1177/0003603X16688836
Have you been following the ADIDAS corruption trial? Plenty of star athletes are being flooded with money. NCAA prefers to keep it that way under the table.