Should the NCAA lose its tax exemption if they continue to ban athletes from making money off their likenesses?
The NCAA (National Collegiate Athletic Association) is the organization which runs college sports, at such an all-encompassing level that many consider them essentially an illegal monopoly. Last year they earned $1.06 billion in revenue, a new record.
More accurately, they are a monopsony — still technically a market, but for which in practice there is only one buyer available. While a rival organization technically could start to compete with the NCAA, in reality for several decades nobody has dared take on the behemoth.
The athletes on the field or court provide essentially all the entertainment value which powers this billion-dollar enterprise. Yet these athletes are banned from profiting off their likenesses — for example from jersey sales, video games, or posters.
What the bill does
The Student-Athlete Equity Act would would strip tax exempt status from the NCAA unless they begin allowing athletes to profit off their likenesses — for example from jersey sales, video games, or posters.
It was introduced in the House on March 14 as bill number H.R. 1804, by Rep. Mark Walker (R-NC6).
What supporters say
Supporters argue the bill is only fair in a nonpartisan way, allowing athletes to earn the money that they’re entitled to based on the value they provide to the organization, rather than the (essentially) zero dollars they earn now.
“Signing an athletic scholarship with a school should not be a moratorium on your rights to your name, image, and self-worth,” Rep. Walker said in a press release. “It’s time to bring equity to student-athletes and fix the injustices that exist in the current NCAA model.”
After nearly two years of discussions with players and leaders, we are introducing legislation that won’t cost the NCAA or our schools a single dollar,” Rep. Walker continued, “while empowering college athletes with the same opportunities that every American should have in a free-market.”
What opponents say
Opponents argue that NCAA athletes already are compensated, in the form of educational scholarships where they get to attend college for free. And the future professionals — who provide most of the NCAA’s current value — all become millionaires only a year or two down the line.
“What’s the core function of intercollegiate athletics?” NCAA President Mark Emmert rhetorically asked during an interview with sports reporter Seth Davis. “Why do these games exist? And who are these young men and women who are the athletes?” His point: they are primarily students, so their scholarships plus free room and board are payment enough for the vast majority who won’t later turn pro.
“If that’s what people want out of college athletics, then of course it’s not collegiate athletics anymore. It’s professional athletics,” Emmert continued. “There may be people in higher education who want that, but I don’t know of them.”
Odds of passage
The bill has attracted two bipartisan cosponsors: one Republican and one Democrat, Reps. John Ratcliffe (R-TX4) and Cedric Richmond (D-LA2). It awaits a potential vote in the House Ways and Means Committee.
In theory, this bill should attract bipartisan support. It jibes with both Democrats’ desire for higher pay such as minimum wage increases, and also with many Republicans’ opposition to “crony capitalism.”
Then again, the NCAA’s status quo has persisted for decades, even with this apparent bipartisan support for reform.