What College Football Can Teach Us About Free Markets
January 9, 2024, saw the conclusion of the 2023 college football season with the University of Michigan playing the University of Washington in the national championship game. By most accounts, this was one of the more popular, competitive, and exciting college football seasons in recent years. There was no shortage of intriguing storylines ranging from conference realignment to Deion Sanders’ Colorado squad grabbing the entire nation’s attention for the first month of the season. For the first time in almost a decade, the college football playoffs featured teams from all over the country; Alabama, Michigan, Texas, and Washington all played to identify the best team in the country. As an avid college football fan, all these storylines got me thinking about what made this season so successful and what lessons the season can provide. The two factors that stand out are the emergence of name, image, and likeness (NIL) compensation, and the transfer portal.
Until recently, NIL was nonexistent while the transfer portal was rarely used by top teams to improve their roster. The reasons for this are simple: the NCAA prohibited players from getting paid for their labor; the NCAA forbid players from changing schools without sitting out a year— graduate transfers being the lone exception. Predictably, the removal of these unfair unnecessary restrictions and the adherence (for now) to free market principles has contributed to an explosion in the popularity of the sport. As Fox Sports’ Joel Klatt said on his podcast last summer “college football has never been better…I believe that we are at the dawn of the ‘golden age’ of college football.” The 2024 National Championship game was the highest-rated championship game in four years, but it wasn’t even the most-watched game of the season! I attribute much of that success to NIL and the transfer portal.
Let’s break down NIL and the transfer portal separately for now. In June 2021, the Supreme Court ruled unanimously that the NCAA had violated antitrust law by colluding to prevent athletes from making money for their labor. Notably, the NCAA v. Alston ruling did not dictate that schools or the NCAA must compensate players. Rather the ruling merely determined that the NCAA couldn’t prevent athletes from getting compensation. Essentially, the NCAA v. Alston created a model like that seen with Olympic athletes who are not allowed to be paid directly by their countries but are allowed to have outside endorsements and make money from autographs, from jerseys, and paid speaking engagements. This has led to an explosion of NIL deals ranging from USC’s Caleb Williams having a national Wendy’s commercial to BYU’s walk-ons receiving full scholarships courtesy of Built Brands. Many universities have also created “collectives” funded by boosters to compensate players. Texas for instance created the “Pancake Factory” which gives out $50k to offensive linemen on the team.
The rise of NILs has had a massive impact on the sport. Players no longer have to choose between being either broke collegiate athletes or scofflaws who illegally take money from black market “bag men,” putting their (and their school’s) future in jeopardy. It has also allowed many athletes who may be considering going pro for financial reasons to stay in school for an additional year to hone their skills. This not only improves the player’s draft stock; it also improves the product that is college football.
Critics of this new system will lament the competitive imbalance traditional powers will have now that they can legally pay players. They contend bigger schools like Texas, USC, Georgia, and Ohio St. will simply be able to buy championships. However, this contention ignores that traditional powers have always ruled college football. NIL allows nontraditional powers to be more competitive as they can openly invest in top players they’re recruiting. An example of this is five-star receiver Micah Hudson out of Lake Belton, Texas who committed to Texas Tech over the University of Texas in part because of the NIL package from Tech boosters. This would’ve been impossible if not unconscionable 10 years ago. In many ways, these athletes will be making the same decision most prospective employees make at some point: when considering a workplace, is it better to choose more money or a better long-term/cultural fit? These student-athletes will all learn valuable lessons from choosing the workplace best for them no matter how their decisions turn out.
An equally important life decision many members of college football teams will be faced with is whether to stay at the school they originally committed to out of high school. Many good young players never see the field due to injuries, grades, and off-the-field issues. That’s before even considering those who will be surpassed by recruits who come after them. In the past, the overwhelming majority of football players would have little to no chance of ever seeing the field or would be stuck in a situation not conducive to their growth as student-athletes or as people. Recently, however, the NCAA has relaxed its rules so that they may transfer once without losing a year of eligibility.
As a result, many athletes seek greener pastures elsewhere for a variety of reasons. The new system has given the athletes a better chance at fulfilling their dreams of playing in the pros as well. Like NIL, the transfer portal is leveling the power imbalance between athletes and coaches. In the past, coaches told prospective student-athletes whatever they could to get their commitment. It was commonplace for coaches to promise that they were staying at a particular school, only for those coaches to take a better job elsewhere leaving their former players stuck at a school and playing for a coach for whom they did not necessarily want to play. The by-product was many players left behind often had their athletic — if not personal— development stunted by having to adjust to a new coach who may or may not appreciate their skillset.
On a macro level, the freedom of movement has allowed football teams to not only improve quickly but also generate more interest in the sport year-round through a form of free agency. In years past the summer months were considered a dead period in the sport. Today, there is constant intrigue due to players transferring. Colorado took the entire sports world by storm earlier in the season when Deion Sanders brought a host of transfers from Jackson St. including his son Shaduer and Travis Hunter— the top-ranked recruit in the high school class of 2022. Players like Heisman Trophy winners Jayden Daniels and Caleb Williams, along with notable players like Michael Penix, Bo Nix, and Quinn Ewers were all transfer players who made a significant difference in their team’s success this year while also greatly improving their NFL draft status by finding better situations.
So, what lessons can we as a society take from college football? The short answer is that free market principles work — including having freedom of movement to choose one’s desired workplace. When workers, aided by their autonomy, are allowed to maximize their talents it’s better for everyone. The fact that college football is currently the closest thing we have to a truly free market in our society has led to a boon in its popularity. This is not to claim that there aren’t things that need to be ironed out. Like the free market, there are holes in the revamped college football circumstance; everyone isn’t going to be successful; and the fair treatment of student-athletes is still a work in progress. Sometimes guardrails need to be put up to aid where those gaps exist. However, the core principles of free market capitalism are sound and should be our guiding light. In an age where the political left and right often ignore or dismiss the value of free markets, we must realize these lessons are universal if we are willing to pay attention.
This piece solely expresses the opinions of the author, and not necessarily the Classical Liberal Caucus as a whole.
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