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

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.

Automated summary

This article examines the impact of fan wage-repugnance effect on the competitive advantages in NCAA sports output markets. Although the court in the Alston v. NCAA case considered this advantage as given, it failed to recognize the empirically-verified relationship between league talent and fan demand.