College Football: A Redshirt Season for the NCAA or a New Normal?

17 August 2020 Sports Business Journal Publication
Author(s): Jonathan L. Israel

While the COVID-19 pandemic has stymied sports leagues globally, nowhere has it hit harder than college sports in the U.S. With autumn approaching, focus has shifted to the NCAA’s crown jewel: Football Bowl Subdivision (FBS) football. As schools and conferences make crucial decisions about their immediate future, one question remains ominously unanswered — could the COVID-19 pandemic be the catalyst for major football programs in the Power Five conferences to split from the NCAA?

House of Cards – Why College Football is Ripe for Disruption

Before COVID-19, college athletic department finances were already precarious. Many P5 schools were running large deficits and servicing substantial debt, all while remaining revenue-dependent on football and men’s basketball. Simply put, the survival of college athletic programs could depend on whether a college football season is played this school year. Given that few, if any, fans would be allowed to attend fall games, traditional sources of football-related revenue (e.g., gate receipts, concessions, and parking) will be non-existent or curtailed significantly. Thus, absent incurring additional debt, athletic departments may have only broadcast revenue as sustenance for the foreseeable future. For this reason, incremental gains in broadcast revenue will be critical.

But how will such incremental gains be achieved? Despite its popularity, college football broadcast revenue lags significantly behind those of the NFL and NBA — a discrepancy that may stem from a lack of consistent quality competition (e.g., P5 teams playing weaker, lower division (Group of Five) or Football Championship Series (FCS) teams), dilutive conference-by-conference broadcast deals (as opposed to a single collective package), or both. Whatever the reason, college football’s blue bloods will remain the main draw, so perhaps the path to greater broadcast revenue is the creation of a new college football product: an independent “super league” consisting solely of P5 programs and Notre Dame. The NCAA would never willingly allow its largest programs in its most popular sport to simply walk away, but would it have a choice?

The Way Out – A Legal Blueprint to an Independent College Football League

College football outside the purview of the NCAA already functionally exists. The NCAA’s authority over FBS football is limited mostly to rulemaking and enforcement concerning eligibility, financial aid, and recruiting. Indeed, FBS football is the only major sport where the NCAA does not officially recognize a national champion at the highest competitive level. Instead, the College Football Playoff is organized and operated by the conferences independently from the NCAA. In short, the power brokers in elite college football are colleges and conferences — not the NCAA. Notably, the NCAA has remained largely silent while the conferences themselves decide whether to proceed with fall football (e.g., ACC, SEC, Big 12) or delay until spring 2021 (e.g., Pac-12, Big Ten, MAC). Even if the NCAA canceled fall sports, certain conferences might nevertheless proceed on their own with fall football, prompting the question: What, if anything, could the NCAA do about it? The apparent answer, in light of controlling legal precedent, is not much. 

In the seminal case NCAA v. Board of Regents (1984), the U.S. Supreme Court ruled that an NCAA-imposed television plan, which, under threat of sanctions, limited the number of television appearances any school’s football program could make during the season, violated federal antitrust law by unreasonably restricting consumer choice and competition in the relevant market of live college football. Today, consumer choice and market competition for live college football would likely increase if a new college football league formed and conducted a season completely separate from the NCAA. In any such case, and in view of the board of regents decision, any NCAA-threatened sanctions against the participating schools would likely be deemed unlawful under an antitrust challenge. 

Next Steps – Obstacles and Challenges to College Football without the NCAA

Even if an independent college football league could legally circumnavigate the NCAA, the concept begs several other legal and practical concerns, most notably, governance. Even with apparent independence from the NCAA, the P5 conferences have been addressing the possibility of a fall football season in differing and disjointed ways. Separation from the NCAA could free P5 schools from certain restraints, but it is not clear that any new league would be run or governed more effectively. 

Additionally, each conference would likely have contractual claims if certain of its leading programs left for a new super league, particularly regarding broadcast rights which many schools have surrendered to their conferences.  And what about FBSprograms excluded from the new league? An antitrust challenge by a strong G5 program (e.g., Boise State, UCF) might be viable, as any pro-competitive justifications for excluding such programs would likely endure warranted scrutiny.

Similarly, would P5 schools seek an exodus from the NCAA for other sports, most notably men’s basketball? This seems less likely, given football’s independence from the NCAA and basketball’s substantial financial incentives tied to the NCAA, primarily its March Madness tournament. However, the P5 conferences reportedly had considering conducting championships in all fall sports (including football), irrespective of any NCAA decision or vote. Thus, it is conceivable that P5 schools with traditionally strong basketball and football programs might be inclined to establish an independent league composed of multiple sports, while attempting to leave less-profitable sports under the purview of the NCAA.

To keep a grip on elite college football, the NCAA’s only recourse may be securing an antitrust exemption via federal legislation, which would allow it to regulate college sports free from federal antitrust laws. A groundswell of state legislation providing for name, image and likeness (NIL) compensation for student athletes has galvanized the NCAA, which is currently lobbying the U.S. Congress to create a national framework for NIL compensation and an antitrust exemption that would allow the NCAA to implement and enforce it. In the wake of unprecedented collective action among college athletes through the #WeAreUnited and #WeWantToPlay movements, the NCAA’s need for federal intervention has become even more urgent. It is hard to know whether any such antitrust exemption would be broad enough to help the NCAA stop the formation of an independent college football league, but P5 schools would likely welcome congressionally sanctioned NCAA regulation that suppresses the costs and commercial rights of college athletes, even if it puts them under the NCAA’s thumb. Given the uncertainty of COVID-19, federal NIL legislation, and the recent collective action by college athletes, decisions made in the coming months could reshape the future of college sports forever.

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