The next frontier in college athletics

Published March 27, 2024

By Frank Hill

Since college and university presidents and athletic directors and officials at the NCAA can’t make up their minds about a fair distribution of money from television and NIL contracts for all universities and all student-athletes, the free market may be poised to take over and make those decisions for them.

College athletics is supposed to be a way to build the physical stature of students while developing their leadership skills. The Duke of Wellington has been attributed, incorrectly as it turns out, as saying, “Waterloo was won on the playing fields of Eton.” Such sentiment still rings true today. Perseverance through trials and determination to succeed against all odds are qualities Americans most admire, both of which are on full display in this year’s March Madness.

College athletics was not supposed to make coaches and the best players wealthy under the protection of nonprofit statutes. Professional leagues were established for that purpose. Unless college presidents and athletic directors can figure out how to put that genie back in the bottle, it is time to recognize college football as the big business it really is and treat every Division I College Football Playoff team as a stand-alone, fully taxable private business.

If a university decides it wants to keep playing football under its current nonprofit status, it can drop out of CFP and schedule games against other non-CFP teams. Villanova, for example, won two NCAA men’s basketball championships in 2016 and 2018, but its football team competes in the FCS subdivision, proving winning in other sports without big-time football revenues can be done.

The most successful football programs in the SEC (Alabama, Georgia, LSU and then everyone else) and Big Ten (Michigan, Ohio State and then everyone else) understandably don’t want to share any of the massive television revenue their conferences have negotiated for good reason: Their teams attract much larger audiences and generate far more ad revenue for the networks. Based purely on free market principles, each team should reap the rewards of its success just like any other person in any other endeavor of American life.

So why keep conferences at all? Hardly anyone would watch Vanderbilt play Missouri on the SEC Game of the Week if that was all that was offered. Why not treat every one of the 134 CFP teams as if they are independent, just like Notre Dame has operated for their entire history, and let them schedule whoever they want to play and get paid according to the in-game attendance and television revenues each game generates?

The free market would determine each team’s annual revenues, not a convoluted conference agreement.

As a stand-alone business, each football program could keep whatever revenues it generates as long as it is fully taxable and complies with all labor laws. College presidents and athletic directors should be able to work out a deal with the new semi-professional football program bearing the university’s name whereby the football program can make an annual contribution to support the nonrevenue and Title IX teams and receive a tax deduction just like any other private entity would receive ― and then keep the rest.

There is one other stream of revenue that could provide public universities in North Carolina more than enough revenue to compete financially with the big boys and stay right where they are today in the ACC, and that is legalized gambling.

Legalized gambling became official in North Carolina on March 11. Legalized gambling is controlled by the state legislature, not university presidents or athletic directors. The state legislature controls the bulk of funding for all 17 public universities in North Carolina. While some of the tax revenue expected to be generated from legalized gambling will go to help college athletic programs in some limited way, it is just a matter of time before an enterprising state legislator figures out how to create a robust revenue-sharing stream from the gambling industry to support the athletic programs of public universities such as UNC, NC State, Appalachian State and UNC Charlotte to start with. There is a symbiotic relationship between gambling concerns and college athletics which has never existed before in North Carolina, and both will need each other to survive and flourish.

Athletic conferences come and go. The Southern Conference had 24 members in 1930 before it spawned the SEC in 1933 and the ACC in 1953. The free market is about to decide how and where current ACC teams will play in the very near future, and fans will continue to follow and support their favorite teams regardless.

But under no circumstances should their football teams be allowed to do so under the protection of nonprofit statutes. The time to choose between for-profit and for-educational benefit has come.