IT MAY have invented trust-busting, but for decades America has tolerated an insidious cartel. Unlike most price-fixers, who seek to inflate their products’ value, this one acts as a monopsony—using market power to obtain cheaper inputs—to squeeze its vulnerable employees.
The name of this syndicate is the National Collegiate Athletic Association (NCAA), the governing body for American college sports. Uniquely among major team sports, the top leagues in basketball (the NBA) and American football (the NFL) do not recruit from lower professional circuits. Instead, they delegate training to universities: the NFL requires new players to finish three seasons in college, and the NBA’s minimum age is 19. This has helped turn the schools into entertainment juggernauts. At $10.5 billion a year, college sports revenues—mainly from TV, attendance and merchandise—exceed those of any single pro league. Even this understates the profitability of college sports, because the NCAA maintains an amateurism policy that caps athletes’ compensation at the cost of their education.