The NCAA Cartel, Monopsonistic Restrictions, and Antitrust Policy

Abstract

NCAA members behave like a buyer cartel and use the bylaws of the NCAA to maintain their collusive agreement. We model the NCAA as a collusive monopsony and demonstrate the impact on compensation and employment for student athletes, as well as the consequences for social welfare and distribution of surplus. Then we identify specific NCAA bylaws that restrain competition among cartel members, such as limits on the number of athletic scholarships awarded, recruiting, player transfers, and athletic housing. Lastly, we discuss the effects of the NCAA’s recent move to lift the restriction on contract durations for student athletes and the recent Agnew antitrust litigation which may have precipitated this change.