By Robert J. Romano, JD, LLM
The defensive coordinator at Clemson University earns upwards of $2.2 million a year for developing the team’s defensive game plan, overseeing position coaches, and calling the defensive plays during a game.[1] On the other side of the ball, the offensive coordinator at Alabama earns over $1.6 million, while his offensive line coach and tight end coach earn $650,000 and $540,000, respectively.[2] In fact, NCAA member institutions with a Division I football program paid out, collectively, more than $318 million to assistant coaches during the 2019 football season. Interestingly, no one forced the university’s president or athletic director to pay these exorbitant salaries, they choose to do so on their own.
However, escalating coaches’ salaries are a concern within college sports. According to University of Florida Athletic Director, Scott Stricklin, “I think one of the biggest challenges we have in college athletics is what our coaches are making. They are in a market that allows them to enjoy those kinds of salaries, but I do think the optics of it are not helpful.” His worries were echoed by Tom McMillen, a member of the Board of Regents for the University System of Maryland, who stated, “The biggest problem in college sports right now is spiraling coach salaries.”
So, what, if anything, can be done about these spiraling coaches’ salaries?
What, if anything, should be done about it?
An easy and straightforward option for the NCAA would be to enact a rule limiting how much money an assistant coach can earn annually. But then again, maybe not since the NCAA attempted this back in 1989 when it established the Cost Reduction Committee. This committee was tasked with finding various ways to reduce costs associated with intercollegiate athletics, all “without disturbing the competitive balance.” One proposal was to restrict annual compensation for Division I sports (other than football) assistant coaches to $16,000. This proposal was accepted by the NCAA and became known as Bylaw 11.02.3. Assistant basketball coaches affected by this new bylaw filed a class action lawsuit against the NCAA challenging the salary restriction under Section 1 of the Sherman Antitrust Act.
In 1998, the U.S. Court of Appeals, Tenth Circuit, in the matter of Law v. NCAA[3], affirmed a lower court’s decision when it rejected the NCAA’s procompetitive rationale for the restricted earnings rule by finding “. . . we need not consider whether cost reductions may have been required to ‘save’ intercollegiate athletics and whether such an objective served as a legitimate procompetitive end because the NCAA presents no evidence that limits on restricted earning coaches’ salaries would be successful in reducing deficits, let alone that such reductions were necessary to save college basketball.” The Appeals Court in upholding the lower court’s finding that the NCAA was in violation of federal antitrust laws when it implemented the restricted-earnings rule, also sustained the permanent injunction barring the NCAA from reenacting the compensation limits and ordered it, the NCAA, to pay over $22 million in damages that was trebled to $67 million.[4]
If the NCAA tried again to create a rule limiting what a member institution could pay assistant coaches, even if more narrowly tailored than its predecessor, it would face the same antitrust challenges, presumably without much of a difference in the end result.
So, what can a powerful, influential organization do when faced with the possibility of implementing a rule it knows would be in violation of federal law? It can change the law. And this is exactly what the NCAA is attempting to do.
At the end of the 2019 congressional session, Representative Donna Shalala (D -Florida)[5] proposed federal legislation that would provide the NCAA with an antitrust exemption so that colleges and universities could limit or cap salaries through the creation of a national commission aimed at reforming college athletics. Per Rep. Shalala, “I’m mortified at these (coaches’) salaries, we have not been able to slow spending or expenditures.”
But isn’t such a proposal, allowing the NCAA monopolistic power, extreme given the concerning history of allowing sports entities antitrust immunity, including Major League Baseball, the Broadcasting Act of 1961, and the NFL/AFL merger — to name a few?
Major League Baseball has had immunity from antitrust suits, and the time-consuming and costly litigation involved with defending such claims, since 1922 when the U.S. Supreme Court ‘granted’ it an antitrust exemption. In Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs[6] the U.S. Supreme Court found that the game of baseball itself is not “commerce amongst the States” and therefore, federal antitrust law does not apply.[7] As a result, an antitrust exemption for MLB was born and with that the ability for its franchise owners to control their business without the fear of court intervention or oversight. Great for MLB, not so much for its players, because the exemption allowed franchise owners to continue enforcing the reserve clause within players’ contracts which significantly depressed players’ salaries for an additional 50 years.
The National Football League, on the other hand, has used the powers of Congress to garner two limited antitrust exemptions. First, in 1961, the NFL received an exemption which permitted it to ‘pool’ broadcasting rights so it could sell them as a package, with the revenue to be shared equally by all of the teams. By enacting the Sports Broadcasting Act, Congress purposefully overruled a federal court decision which found that the NFL’s method of ‘pooling’ television rights violated the Sherman Antitrust Act.[8] The Sports Broadcasting Act turned out to be a great deal for the NFL, but not so much for the television networks. Due to the limited ‘pooled’ inventory of games, the networks ended up out-bidding one another, with the winner paying a premium price to the NFL to air its games on Sundays.
Second, in 1966, Congress granted an exemption to the National Football League and the American Football League that allowed the two to merge into one league. Up until then the two competed for players, which, because of the laws of supply and demand, led to an increase in player salaries. The exempted merger, however, eliminated this competition and as a result, a significant drop in player salaries followed.[9] Great for the NFL, not so much for the players.
Since previous antitrust exemptions, secured through either a court’s decision or via legislation, have significantly benefited various sport properties, while at the same time adversely affecting those who would impact their economic interest, why is Congress pushing legislation that would allow the NCAA to operate as a legal monopoly?
The answer to that question comes from the NCAA’s belief that an antitrust exemption would allow the NCAA to restore academic integrity within college athletics. Its argument is that much has been lost over the years as the powerful hierarchy within the NCAA has shifted the mission from that of amateur athletics and the student-athlete, to that of revenue which can be generated through television rights, sponsorships, and post-season games.
“I don’t think the NCAA can be fixed because of who is running it,” said Donna Lopiano, the former Director of Women’s Athletics at the University of Texas and founder of Sports Management Resources. “What needs to happen, take the power away from the member institutions. Someone has to say: These are the conditions under which to operate. Congress has the power to do that . . . think of the academic pieces that could fall into place if we returned athletics to what it should be.”
While others such as Ken Starr, former federal judge, U.S. solicitor general and president of Baylor University, believe it would be good for the NCAA because the exemption would stave off lawsuits. “The idea of the antitrust exemption is to allow the industry to be self-regulated and not to be resolved in courthouses,” Starr said.
However, many, including the National College Players Association, are concerned that giving the NCAA too much immunity would put anyone that opposes it in a much worse position when it comes to both economics and rights.
“This is an attack on college athlete rights, period. To strip them of the protections of antitrust laws, the same laws that every other citizen of this country is protected by,” said NCPA President Ramogi Huma. “Coaches, they are completely asleep at the wheel. They think they’re untouchable, but they’re not. They will be in the same place as college athletes because the universities will have the power to cap coach salaries and ban third party sponsorships.”
Adding to the difficulty of having two very powerful and opposing interests, there is still the question of whether or not there is the necessary “political will” within Congress to move this controversial antitrust legislation forward. Representative Charlie Dent, (R-Pennsylvania), does not believe so.
“My sense is that an antitrust exemption would be difficult to grant given the experience with Major League Baseball and that’s led to an arms race of different sorts,” Dent said. “I just believe an antitrust exemption is going to be a very high bar.”
“This will go nowhere,” added Gary Roberts, former President of the Sports Lawyers Association, “There is no political will at this time to move this issue forward.”
Regardless whether there is the political will or not, the question remains as to why Congress is pursuing legislation that, in essence, would dictate what an individual could earn in his or her chosen profession? In the United States, market forces determine value, so why are you against allowing assistant coaches the right to put their services out on the open marketplace so that they could be paid what someone else feels their services are worth?[10]
In addition, why is Congress concerned about slowing the spending or expenditures of NCAA member institutions when it comes to assistant coaches’ salaries? That’s the job of the university president or athletic director. If a president or athletic director doesn’t want to pay these “spiraling salaries” they don’t have to. College athletics does not work like or have the same market conditions as other businesses because there is no concern about maximizing profit. If the president or athletic director believe it is in the best interest of its university to pay the escalated assistant coaching salaries, presumably at the expenses of professor salaries, student benefits, or other institutional advancements, so be it. If their spending or expenditures need to be slowed, this is a matter for the university’s Board of Directors to deal with, not Congress.
And finally, allowing the NCAA an antitrust exemption is an extreme measure considering previous exemptions within the sports context have typically only helped one party — the established sport institution. There is another party that Congress needs to concern itself with, the student-athlete. Allowing the NCAA antitrust immunity would put an end to any advances these athletes have fought for over the years, such as larger scholarship stipends, and name, image and likeness rights.
So can anything be done to thwart the spiraling cost associated with assistant coaches’ salaries? The answer is yes — request Congress grant the NCAA an antitrust exemption. But even if an exemption could be so narrowly drafted to withstand antitrust scrutiny, the political will, especially within the current climate where athlete rights are a central concern, is limited.
As to the question whether something should be done to thwart the spiraling cost associated with assistant coaches’ salaries, the answer again is yes. But that something needs to be left up to the college and university presidents and athletic directors, not Congress or the courts.
Robert J. Romano is an Assistant Professor of Sport Management at St. John’s University. His research interests are in the areas of Athletes’ Rights and Social Justice, as well as Sport Law and Antitrust Issues. email- romanor1@stjohns.edu
[1] https://sports.usatoday.com/ncaa/salaries/football/assistant
[2] https://sports.usatoday.com/ncaa/salaries/football/assistant
[3] Law v. NCAA, 134 F.3d 1010 (10th 1998).
[4] The case ultimately settled for $54 million.
[5] Notably – Shalala is the former university president at Wisconsin and Miami who won the Florida’s 27th Congressional District House seat in 2018.
[6] Federal Baseball Club of Baltimore v. National League of Professional Base Ball Clubs, 259 U.S. 200 (1922).
[7] Id. at 209. (This may have been logical at the time since the Leagues were merely umbrella organizations only responsible for arranging schedules and setting rules. The “business” aspect of the game was an entirely local function, run by the individual franchises. At this time, there was no revenue sharing, no broadcasting agreements for either radio or television, and no national sponsors or licensing deals).
[8] United States of America v. National Football League, 196 F. Supp. 445 (E.D. Pa.1961-07-20) (“I am therefore obliged to construe the Final Judgment as prohibiting the execution and performance of the contract dated April 24, 1961, between the National Football League and the Columbia Broadcasting System.”).
[9] Ethan Lock, The Scope of the Labor Exemption in Professional Sports, 1989 Duke L.J. 339, 404 (1989).
[10] A question frequently asked by my students – “How does one determine what to pay an athlete?” The answer -The value of an athlete’s services is exactly what someone is willing to pay for them.
