For most of the modern history of college sports, the economic model rested on an unusual premise.
Everyone was allowed to participate in the market except the athletes.
Coaches could negotiate salaries. Athletic directors could move between schools. Conferences could sell television rights to the highest bidder. Apparel companies could compete for university contracts. Networks could bid billions for live inventory. Universities could monetize tickets, sponsorships, licensing, donations and intellectual property.
The athlete was different.
His compensation was bounded largely by what the institutions purchasing his services collectively decided he could receive.
Name, image and likeness changed that. The transfer portal accelerated it. House v. NCAA pushed the system further. And the result has been messy, expensive and, at times, absurd.
But markets often look chaotic immediately after artificial constraints disappear.
That distinction matters as Congress considers the Protect College Sports Act of 2026.
The bill contains provisions athletes should welcome. It would establish a federal NIL right, strengthen scholarship protections, impose healthcare obligations on schools, regulate agents, create athlete representation in governance and provide certain private rights of action. It also attempts to preserve women’s and Olympic sports.
Those are substantive protections.
But buried alongside them is a much larger economic proposition: Congress would help determine how much institutions can spend on athletes, restrict certain forms of athlete mobility and provide antitrust protection for institutions enforcing specified compensation, NIL and eligibility rules.
That deserves considerably more scrutiny.
The Senate voted 74-24 on September 15 to invoke cloture on the motion to proceed to the legislation. That procedural vote moved the bill forward; it was not final passage.
The debate is being framed as a question of whether Congress can “save” college sports.
The more useful question is:
What exactly are we saving, and from whom?
When a market finally develops
Economists have a useful word for a market dominated by a small number of buyers: monopsony.
College athletics has never been a textbook monopsony. Thousands of schools exist, institutional structures differ and athletes receive scholarships and other benefits. But at the highest levels of football and basketball, the NCAA and its members historically imposed common limits on what schools competing for athlete services could provide.
The Supreme Court’s 2021 decision in NCAA v. Alston did not resolve every issue surrounding athlete compensation, but the litigation exposed the uncomfortable economics underneath the amateurism model: competitors on the purchasing side of a labor market had been cooperating to restrict forms of compensation.
NIL began dismantling that architecture.
And something predictable happened.
Prices rose.
Quarterbacks discovered that quarterbacks are scarce. Elite pass rushers discovered that elite pass rushers are scarce. Schools discovered that a player’s theoretical “market value” becomes very real when another institution is willing to write the check.
What has followed is usually described as an arms race.
Perhaps it is.
But an arms race is also one way of describing competitive bidding.
A neurosurgeon negotiating among hospitals is not causing chaos because several employers want her services. A software engineer does not threaten competitive balance because Google can offer more than a regional technology company. Nobody proposes that Congress establish a national retention cap for investment bankers because Goldman Sachs has greater resources than a community bank.
Sports are admittedly different. Competitive balance has economic value. A league in which the outcome is predetermined eventually destroys its own product.
Yet professional sports already solved this problem.
The NFL has a salary cap.
The NBA has a salary cap.
Those systems contain drafts, restricted movement, revenue sharing and extensive rules governing the employment market.
There is one rather important difference.
Those restrictions are collectively bargained.
Players receive economic restraints on one side of the table and representation, compensation, benefits, free-agency rights and negotiated protections on the other.
College sports increasingly wants the economics of professional sports without fully adopting the labor architecture that legitimizes its restraints.
That is a difficult position to defend on free-market grounds.
The compensation contradiction
The revised Protect College Sports Act would preserve the House-settlement revenue-share framework while creating an additional $22.5 million retention fund. That retention capacity could increase to $27.5 million when specified investment in women’s and Olympic-sport NIL is made. The legislation also moves toward a “hard” revenue-share cap and treats certain associated-entity transactions as compensation counted against it.
Those numbers sound large because they are large.
But the size of a cap does not resolve the economic question presented by the cap.
Suppose University A believes its quarterback is worth $3 million.
University B believes he is worth $5 million.
University C believes he is worth $7 million.
In most markets, the question is settled through competition.
College athletics is instead considering a framework in which institutions collectively operate within government-sanctioned limits on the price they may pay certain participants.
CBO describes the legislation as providing antitrust protection for institutions, conferences and athletic associations enforcing specified NIL, eligibility and compensation provisions.
That is where the philosophical tension becomes difficult to ignore.
Antitrust law ordinarily exists in part to prevent competitors from coordinating in ways that suppress competition.
Here, Congress is considering granting protection from that law to competitors coordinating certain economic restraints.
One does not have to oppose every element of the bill to find that extraordinary.
Who bears the cost of “saving” Olympic sports?
One of the strongest arguments for congressional intervention has little to do with quarterbacks.
It concerns everyone else.
Universities argue that unrestricted spending on football and men’s basketball threatens sports that do not generate comparable revenue. The bill responds with protections for women’s sports, Olympic sports, roster positions and scholarships. CBO expects those requirements themselves could impose tens of millions of dollars in annual institutional costs.
The policy objective is understandable.
But economists should ask a second question whenever somebody proposes a subsidy:
Who is actually paying for it?
If society believes wrestling, swimming, gymnastics, track and field and other Olympic sports have educational and social value, there are many ways to support them.
Universities can allocate institutional resources.
Donors can fund programs.
Conferences can share television revenue.
Athletic departments can reduce administrative spending.
Media-rights structures can be redesigned.
Congress can choose explicit public policy.
What deserves scrutiny is the idea that football and basketball players should implicitly subsidize those priorities through restrictions on the market price of their own services.
That would be a peculiar arrangement.
The young men generating the most commercially valuable inventory would effectively become part of the financing mechanism for an institutional model they did not design.
Supporting Olympic sports and allowing football players to capture their market value are not inherently incompatible objectives.
Treating them as such conveniently shifts the cost of preservation.
The transfer portal is a labor market
The transfer portal may be the most disliked efficient market in America.
Coaches complain about instability. Fans complain that players lack loyalty. Administrators complain that roster construction has become impossible.
Some of those complaints are legitimate.
But viewed through an economic lens, the portal performs a familiar function.
It creates exit.
Exit is one of the most important sources of bargaining power a worker possesses.
If a player is buried on the depth chart, he can leave.
If a coach recruits over him, he can leave.
If his market value increases, he can test that value.
If the environment is poor, he has alternatives.
The Protect College Sports Act would establish one penalty-free transfer while generally imposing a competitive restriction on subsequent transfers, subject to exceptions. CBO specifically identifies the bill as limiting athletes’ ability to transfer.
There may be legitimate reasons to regulate transfer timing. Academic calendars exist. Seasons need structure. Tampering can undermine contracts.
But limiting movement should be understood for what it is economically.
It increases the bargaining power of the incumbent institution.
That does not automatically make the rule wrong.
It does mean we should stop pretending it has no economic consequence.
NIL is property—until the price becomes inconvenient
One of the great conceptual breakthroughs of the NIL era was remarkably simple:
Your name belongs to you.
Your image belongs to you.
Your likeness belongs to you.
That proposition now seems obvious.
The federal legislation would formally protect that right, which is meaningful. It would also impose contract requirements, registration standards and other rules intended to make the market more transparent.
Some regulation is sensible.
Fraud should be punished.
Agents should disclose conflicts.
Athletes should understand contracts.
Counterparties should not disguise recruiting inducements as fictional endorsement transactions.
But there is a difference between policing fraud and regulating price.
CBO estimates, for example, that the bill’s 5% cap on agent fees could reduce agent revenue by approximately $35 million annually.
Perhaps 5% is a reasonable fee.
Perhaps 3% is.
Perhaps an extraordinary agent creating millions of dollars of incremental commercial value is worth 8%.
That is precisely the type of question markets ordinarily answer.
The free-market objection is not that agents deserve unlimited fees. It is that Washington is an odd place to determine the appropriate price of athlete representation.
Exploitation is not simply “someone else made money”
The word exploitation gets used too casually in sports.
Every commercial relationship produces surplus.
A worker can create $500,000 of value and earn $150,000 without necessarily being exploited. A business must compensate capital, infrastructure, risk and other employees. The fact that an employer captures part of an individual’s economic output is not itself evidence of injustice.
The more interesting question is how the worker’s $150,000 price was established.
If multiple employers compete openly for his services and $150,000 is the best available offer, we have a market outcome.
If those employers agree among themselves that nobody may offer more than $75,000, we have something fundamentally different.
That is the economic concern college sports has never fully resolved.
The greatest problem with the old amateur model was not simply that universities made billions of dollars.
It was that the institutions earning those revenues participated in a system that restricted competition for the athletes helping produce them.
The modern debate therefore should not be reduced to whether athletes are now receiving “enough.”
Enough is not an economic principle.
Who determines the price is.
The institutions make a serious counterargument
There is another side.
College sports are not simply ordinary businesses.
The product depends upon competitive balance, institutional identity and a broad ecosystem of sports that generally cannot support themselves commercially.
The bill’s sponsors argue that escalating spending, litigation, fragmented state laws and uncontrolled roster movement threaten that ecosystem. They point to athlete healthcare, scholarships, national NIL standards and protections for women’s and Olympic sports as reasons federal intervention is necessary.
That argument should be taken seriously.
There is no guarantee that a completely unrestricted market produces the college-sports system fans prefer.
But that leads to a different question.
If economic restraints are necessary to create a viable product, who gets to negotiate those restraints?
That is why professional sports provide such a revealing comparison.
Restrictions themselves are not necessarily the problem.
Unilateral restrictions are.
If universities need compensation limits, transfer windows, eligibility standards and other restraints to preserve their enterprise, there is a strong economic case that athletes should have meaningful representation in negotiating the value exchanged for those restrictions.
The bill leaves the broader employment question unresolved while establishing a congressional commission that could spend years studying alternative structures. CBO says that commission would report to Congress within five years.
Institutions would receive greater regulatory certainty considerably sooner.
That asymmetry deserves attention.
College athletes are becoming economic enterprises
There is a second consequence of all of this that has received far less discussion.
Regardless of whether this particular legislation becomes law, the college athlete is rapidly becoming a new type of economic entity.
Consider an elite college quarterback.
He may have:
school revenue-sharing income;
retention compensation;
outside NIL contracts;
an agent;
an LLC;
future NFL earning capacity;
disability exposure;
contractual obligations;
intellectual property;
social-media value;
cyber and reputation risk;
and potentially millions of dollars of economic value tied to his continued physical performance.
That is not simply a student receiving a scholarship.
It is an enterprise.
At the same time, the university is becoming something different too.
A major athletic department may soon be allocating tens of millions of dollars across a portfolio of athletes while simultaneously managing injury risk, NIL transactions, medical obligations, transfer exposure, litigation, cybersecurity, compliance and future compensation commitments.
That begins to look less like traditional athletic administration and more like enterprise risk management.
The industry therefore needs infrastructure that does not currently exist at scale.
Athletes need systems protecting earning capacity, contracts, businesses, legal rights and financial interests.
Institutions need tools for understanding aggregate athlete exposure, roster concentration, insurance, contractual obligations, compliance and risk financing.
Sponsors need transaction diligence.
Agents need compliant infrastructure.
Insurers need data.
There will eventually be an enormous difference between knowing how much a player is being paid and understanding how much economic risk surrounds that player.
That distinction is where the next sports-financial-services market will be built.
The market isn’t the threat. It is the information.
For years, college athletics benefited from obscuring the economic value of the athlete.
NIL exposed it.
Revenue sharing will quantify more of it.
Retention payments will make it impossible to ignore.
Insurance markets will price it.
Data will eventually measure it.
Once those things happen, college sports will have difficulty returning to the fiction that athlete value is somehow unknowable.
Perhaps that is what makes the current moment uncomfortable.
The market is finally providing information that the previous structure suppressed.
A five-star quarterback has a price.
So does an elite left tackle.
So does a women’s basketball star with two million followers.
Those prices may be uncomfortable. They may occasionally be irrational. They may produce excesses that correct themselves.
That is what markets do.
Congress can legitimately protect athletes from fraud. It can establish healthcare standards. It can safeguard scholarships. It can address abusive agents. It can create transparency. It can protect genuine educational interests.
The harder economic case is explaining why protecting college sports also requires protecting institutions from ordinary competition for athlete talent.
Because if unrestricted competition makes the traditional model financially unsustainable, there is another possibility worth considering.
Perhaps the market did not break college sports.
Perhaps it simply revealed what the old model actually cost.
And who had been absorbing that cost all along.