The Mythology Playbook

DOI10.1177/0003603X17691382
AuthorKevin Trahan,Andy Schwarz
Date01 March 2017
Published date01 March 2017
Article
The Mythology Playbook:
Procompetitive Justifications
for “Amateurism,” Biases and
Heuristics, and “Believing
What You Know Ain’t So”
Andy Schwarz* and Kevin Trahan**
Abstract
The NCAA’s assertion of the necessity of collusively enforced amateurism hinges, inter alia,on
the claim that consumer demand hinges on the capping of pay, despite the evidence from the first
half-century of college football, when the sport thrived in the absence of any national price cap.
At the legal and lay level, amateurism has taken on the quality of a mythology, able to withstand a
barrage of contradictory evidence simply because its supposed truth is “known.” The study of the
human tendency to favor mythology over contrary facts is central to behavioral economics
(beginning with the pioneering work of Amos Tversky and Daniel Kahneman), which focuses on
our substitution of irrational short-cuts (“heuristics”) for actual rationality. In this article, the
authors highlight where the NCAA, the general public, and also the courts have accepted myth in
thefaceofcompellingevidencetothecontrary.Then(inanefforttoovercomeknownbeha-
vioral biases in favor of the status quo), the authors hypothesize a competitive college sports
system from scratch and show the anticompetitive harms that flow from the introduction of
NCAA-style collusive amateurism.
Keywords
NCAA amateurism, behavioral economics, mythology, antitrust, biases and heuristics, rule of reason
Part I: Mythology Is a Behavioral Heuristic
Over the course of 110 years, acting in the financial interest of its member schools and itself, the
National Collegiate Athlet ic Association (NCAA) has buil t a multi-billion-dollar bu siness model
*OSKR, LLC, Emeryville, CA, USA
**VICE Media, Brooklyn, NY, USA
Corresponding Author:
Andy Schwarz, OSKR, LLC, 2200 Powell Street, Suite 430, Emeryville, CA 94608, USA.
Email: aschwarz@oskr.com
The Antitrust Bulletin
2017, Vol. 62(1) 140-183
ªThe Author(s) 2017
Reprints and permission:
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DOI: 10.1177/0003603X17691382
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based on the core foundation of “amateurism.”
1
Boiled down to its economic essence, NCAA ama-
teurism stands for the claim that as a consumer product, college sports “would not exist”
2
without a
collective agreement to maintain compensation below the organic level that would be set by market
forces. This is often expressed as so mething necessary to prevent a rath er implausible consumer
confusion
3
between college and major league sports:
Clear Line of Demarcation. Member institutions’ athletics programs are designed to be an integral part of
the educational program. Th e student-athlete is consid ered an integral part of the s tudent body, thus
maintaining a clear line of demarcation between college athletics and professional sports.
4
Translated into a legal context, this becomes the NCAA’s claim that:
Under the holding of NCAA v. Board of Regents of the University of Oklahoma, 468 U.S. 85 (1984), the
NCAA’s eligibility rules, among other thin gs, distinguish amateur college athletics from professional
sports, and allows the former to exist as a separate product ...
5
While even this definition makes clear that the true bright line distinguishing college sports is that
the athletes are full-time college students, the NCAA has sought since its inception to graft the term
“amateur” on to the words “college sports.”
6
A mantra evolved: college “athletes must not be paid.”
7
But perhaps because it is not a true sine qua non that college sports also be unpaid, the definition of
1. Throughoutthis article, when we refer to “amateurism” as defined by the NCAA, it should be read as being in quotations. To
the extent the authors believe there exists a concept of amateurism that does not require quotations, it does not correspond to
something enforced collectively, but instead the actual voluntary engagement in an activity (such playing of sports) simply
for the joy of it. We see nothing wrong with recruitment or compensation, but they are antithetical to anything corresponding
to a concept of amateurism that does not require quotation marks. Nevertheless for ease of reading, we have not peppered this
article with these markers. Insert air quotes as needed.
2. “The clearest and most fundamental procompetitive benefit of the NCAA’s amateurism rules is the creation of new and
differentiated products that are highly successful and that would not exist but-for those rules. ...”Expert Report of Daniel L.
Rubinfeld Regarding Merits, In re NCAA Athletic Grant-In-Aid Cap Antitrust Litigation, Electronic Case Filing [hereinafter
“ECF”] (N.D. Cal. 2013) (No. 4:09-cv-01967-CW) (Docket No. 925-8) at 21, Dec. 12, 2013. Big Ten Conference
commissioner Jim Delaney has even gone as far to suggest that Big Ten schools would go to a “Division III model” and
not give athletic scholarships if compensation caps were removed. See Avinash Kunnath, Ed O’Bannon vs. the NCAA: Jim
Delany Threatens Big Ten to Division III,SBN
ATION (Mar. 18, 2013), http://www.sbnation.com/college-football/2013/3/18/
4121416/ed-obannon-vs-the-ncaa-jim-delany-threatens-big-ten-to-division-iii.
3. It would be difficult to argue that consumers would be in any real jeopardy of confusing the Minnesota Vikings with the
Minnesota Golden Gophers, even if those Gophers were paid more than they currently are.
4. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, 2016–17 NCAA DIVISION IMANUAL [hereinafter NCAA MANUAL], § 12.01.2,
(2016), http://www.ncaapublications.com/productdownloads/D117.pdf.
5. Defendant National Collegiate Athletic Association’s Answer to Plaintiffs’ Consolidated Amended Complaint, In re NCAA
Athletic Grant-In-Aid Cap Antitrust Litigation, ECF (N.D. Cal.) (No. 4:14-md-02541-CW) (Docket No. 156) at 63, 64, Nov.
6, 2014.
6. In Board of Regents, the market definition on which the court settled was “live college football television” not “live amateur
college football television.” In O’Bannon, the market definition in which the court found anticompetitive harm was identified
as “a national market in which NCAA Division I schools compete to sell unique bundles of goods and services to elite
football and basketball recruits,” and the court also suggested one could look at the market as an input market, in which case
the “ .. .relevant market would be that for the recruitment of the highest ranked male high school football and basketball
players each year.” There was no mention of amateurism. Despite this, in more recent litigation, the NCAA has attempted to
slide the word “amateur” into those conclusions. See Memorandum of Points and Authorities in Support of Defendants’
Motion to Dismiss, In Re NCAA Athletic Grant-In-Aid Cap Antitrust Litigation, ECF (N.D. Cal. 2014) (No. 4:14-md-02541-
CW) (Docket No. 89) at 1 (Sep. 4, 2014), in which the NCAA refers to the product, not as college sports but rather as
“amateur student-athlete intercollegiate sports.”
7. Nat’l Collegiate Athletic Ass’n v. Bd. Of Regents of Univ. of Oklahoma, 468 U.S. 85, 102 (1984).
Schwarz and Trahan 141
amateurism has proven to be “malleable” and has changed “sometimes in significant and contradictory
ways”
8
since the NCAA’s founding in 1906, so that prohibited conduct—at certain times, anything
from the concept of an athletic scholarship itself to receipt of a meal or airfare provided to a parent—is
determined by the NCAA, acting as the central enforcement agency for an economic agreement among
300-plus independent economic actors. That is, “amateurism” is a means by which an industry colludes
to set a monopsony
9
price for its primary input. Per a district court and the Ninth Circuit Court of
Appeals (and acquiesced to, for the moment,
10
by the Supreme Court), this a “unilateral restraint of
trade.”
Perhaps because the stripped-down economics behind an agreement among all major producers of a
product as to how much to pay for a key input are so starkly anticompetitive, the NCAA has been the
subject of a number of antitrust lawsuits, most famously O’Bannon v. NCAA and the ongoing In Re
NCAA Athletic GIA Cap (also known as Jenkins v. NCAA or more colloquially as “the Kessler case”
11
).
Throughout the legal proceedings, the NCAA has maintained that amateurism is necessary for the
health (and even survival) of collegiate athletics, and that, as a result, the association must be allowed
to maintain rules that otherwise might appear anticompetitive. This argument has survived even in the
wake of the Ninth Circuit Court of Appeals’ decision that found the NCAA to have violated the
antitrust laws when it set a below-market price for athletes, under the theory that at a somewhat higher
(but still-below-market) price, the NCAA’s amateurism rules fall within the law because “not paying
athletes is precisely what makes them amateur.”
12
With this circular pronouncement, the Ninth Circuit accepted the odd premise that by attempting to
meet consumer demand, universities would destroy consumer demand.
13
Under this theory, as long as
its members agree to a price cap that is not “patently and inexplicably stricter than is necessary,”
14
the
NCAA’s chosen price is an outcome to be favored over the price set by market forces. The central
thesis of the Ninth Circuit decision was neither supported with citation to the trial record, nor grounded
in new evidence provided posttrial, much like the Board of Regents case on which the NCAA
previously relied (and which the Ninth Circuit at least nominally disagreed).
15
Notably, the core of
this argument—that consumer demand for college sports is primarily driven by the prohibition of
market-level pay—was actually found, both a matter of fact and law, to be false at the district court
level:
Ultimately, the evidence presented at trial suggests that consumer demand for FBS football and Division I
basketball-related products is not driven by the restrictions on student-athlete compensation but instead by
other factors, such as school loyalty and geography.
16
8. Ed O’Bannon, et al. v. Nat’l Collegiate Athletic Ass’n; Electronic Arts Inc.; and Collegiate Licensing Company, ECF (N.D.
Cal. 2014) (No. 4:09-cv-03329-CW) (Docket No. 291), at 80 (2014).
9. Monopsony, a single buyer, is the buyers’ analog of monopoly.
10. On October 3, the Supreme Court denied certiorari to hear the appeals of both parties in O’Bannon.
11. Named for Jenkins’s lead attorney, antitrust/labor/sports attorney Jeffrey Kessler, who also led the legal effort for NFL
athletes to achieve free agency through antitrust law in the 1980s.
12. O’Bannon v. Nat’l Collegiate Athletic Ass’n, ECF (9th Cir. 2015) (No. 14-16601) (Docket No. 112 -1) at 57 (Sep. 30, 2015).
13. Andy Schwarz & Richard J. Volante, The Ninth Circuit Decision in O’Bannon and the Fallacy of Fragile Demand,26
MARQ.SPORTS L. REV. 391 (2016).
14. O’Bannon, 14-1660, Docket No. 112-1 (9th Cir. 2015) at 55.
15. “Board of Regents Did Not Declare the NCAA’s Amateurism Rules ‘Valid as a Matter of Law.’” Id. at 26. The Court added
at 29, 30, that “The Board of Regents Court certainly discussed the NCAA’s amateurism rules at great length, but it did not
do so in order to pass upon the rules’ merits, given that they were not before the Court. ...The Court’s long encomium to
amateurism, though impressive-sounding, was therefore dicta.”
16. O’Bannon, No. 4:09-cv-03329-CW, Docket No. 291 (N.D Cal. 2014) at 82.
142 The Antitrust Bulletin 62(1)

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