Wages, Talent, and Demand for NCAA Sport After the Alston v. NCAA Antitrust Case

Abstract

From the “landmark” Alston v. NCAA antitrust decision, we examine whether the legally hypothesized fan wage-repugnance effect implies procompetitive benefits in NCAA sports output markets via increased output demand from student-athlete wage restriction. In Alston v. NCAA, the Courts took this benefit as given but failed to recognize the empirically-verified relationship between league talent and fan demand. We assume a legally-hypothesized wage-repugnance line exists and present a theoretical output-demand model functionally dependent upon allocations in a wage-constrained labor-input market. Even given fan repugnance, wage restrictions do not necessarily generate procompetitive benefits. For families of model parameterizations, wage restrictions impose anticompetitive harm.