Monopsony Power, Collective Bargaining and College Football

Abstract

The collision of sports and labor law has prompted a rise in scholarly activity best exemplified by the recent Workshop on Sports Law at the Southeastern Association of Law Schools (SEALS). Featuring a number of scholars, the workshop moderated by Professor William Berry surveyed an array of issues. One issue concerns the implications that correspond with the question whether or not the football players at Northwestern University, who receive grant-in-aid scholarships, ought to treated as employees within the meaning of Section (2)(3) of the National Labor Relations Act of 1935 (NLRA).

Although Richard Posner’s understanding of economic theory suggests that the NLRA can be viewed as a kind of reverse Sherman Act designed to encourage cartelization of labor markets, it is equally possible to adduce evidence showing that universities, as putative employers, richly defended by the NCAA, possess unjustified market power. If universities are properly seen as employers, they can be viewed as monopsonies that extract unjustified benefits from their employees who possess inferior bargaining power in spite of the NCAA’s self-proclaimed mission to prevent exploitation of student-athletes under the umbrella of “amateurism.” This brief essay suggests that an economic case can be established favoring the unionization of Division I football players grounded in the likelihood that college players face employers with monopsony power. This remains true despite the fact that complications arise with regard to the possible adverse effects of unionization on both the status of Division II and Division III programs and university athletic programs outside of the domain of football.

Keywords: bargaining power, college football, Division I, employee, employer, labor law, labor union, monopsony, National Labor Relations Act, NLRA, National Labor Relations Board, NLRB, National Collegiate Athletic Association, NCAA, sports law, student athletes, universities

JEL Classification: K31