Paper No. 5 — The Institutional Interest
Why the current system’s short-term advantages mask longer-term instability—and why institutions have reason to prefer a more structured framework.
“Enlightened statesmen will not always be at the helm.”
— James Madison
From the perspective of many institutions, the current system appears to be working.
Revenue continues to grow. Media contracts remain intact. Public interest is strong. In the short term, there is little incentive to disrupt a model that produces substantial returns.
That stability is more apparent than real.
Beneath it, the conditions that support institutional control have begun to shift. Legal pressure has increased. Compensation has expanded beyond traditional boundaries. Competitive dynamics have become more fluid, and more expensive, than in prior eras.
These changes have not yet forced a structural response. They have, however, altered the position of institutions within the system.
This paper proceeds from a simple premise: the current model provides short-term advantages to institutions, but exposes them to longer-term risks that are not fully addressed within the existing framework.
I. Revenue Growth and Its Limits
There is no question that major college football remains financially successful.
Media agreements continue to generate substantial revenue. Conference distributions have increased. Facilities, staffing, and infrastructure have expanded accordingly.
At the same time, the cost side of the system has begun to move in parallel.
Compensation, once constrained, is now an open and evolving category. NIL activity alone has reached significant scale, with tens of thousands of deals submitted for review and hundreds of millions of dollars flowing through the system in a relatively short period1.
In practice, institutions are now operating in an environment where spending is driven less by fixed rules and more by competitive necessity.
That shift matters.
A system in which costs are effectively uncapped, but revenues are contractually fixed for years at a time, does not remain stable indefinitely.
II. Escalation Without Structure
The current environment encourages escalation.
Programs compete not only on the field, but in assembling and retaining rosters. Compensation—whether direct or indirect—has become part of that process. Market signals are visible, but not always reliable.
At the upper end, the numbers are substantial. Individual players can command multi-million-dollar valuations, particularly at premium positions.
At the same time, the broader market remains uneven. Compensation is not standardized, and enforcement mechanisms are limited. Institutions are left to navigate a system in which spending is necessary, but not clearly bounded.
Over time, that dynamic tends to produce the same result: rising costs, uncertain returns, and pressure to match the behavior of competitors.
III. The Litigation Environment
Legal risk is no longer peripheral.
It is a central feature of the system.
Recent years have seen a steady progression of cases challenging NCAA rules and, more broadly, the structure of college athletics. Compensation restrictions have been invalidated. Eligibility rules have been contested. The possibility that athletes may be treated as employees is no longer theoretical.
Individual disputes reflect the same trend. Players have begun to challenge eligibility limits and contractual arrangements in court, seeking both the ability to compete and the opportunity to secure compensation2.
In this environment, institutions are not insulated.
They are participants.
Legal exposure does not remain confined to a governing body. It extends to the entities that implement, benefit from, and rely on the system in question.
IV. Control and Its Erosion
Institutional control has traditionally been one of the defining features of college athletics.
That control is now more difficult to maintain.
Player movement has increased. External entities play a larger role in shaping outcomes. State laws influence behavior in ways that are not fully harmonized. Enforcement authority is dispersed.
In practical terms, institutions now operate within a system they influence, but do not fully control.
That distinction is becoming more pronounced.
Decisions that once could be managed internally now depend on external actors, legal interpretation, and competitive pressures that are difficult to predict in advance.
V. The Competitive Dilemma
Each individual institution faces a similar calculation.
Act conservatively, and risk falling behind.
Spend aggressively, and assume risks that may not be sustainable.
Because the system lacks clear boundaries, these decisions are made in relation to competitors rather than within a defined framework. The result is a form of collective escalation in which no single participant can easily opt out.
This dynamic is familiar in other contexts.
Absent coordination, competition tends to expand the range of outcomes—often beyond what participants initially intended.
VI. Why the Current System Feels Stable
Despite these pressures, the system continues to function.
That persistence can create the impression that the risks are manageable, or at least distant.
In part, this reflects the structure of existing agreements. Media contracts provide predictable revenue streams. Conference affiliations remain intact. The visible elements of the system—games, schedules, championships—continue without interruption.
These factors reinforce the appearance of stability.
They do not eliminate the underlying pressures.
VII. The Case for a More Structured Framework
A more structured system would not eliminate competition or reduce the prominence of successful programs.
It would alter the conditions under which that competition occurs.
For institutions, the benefits are straightforward:
Greater predictability in compensation
Clearer rules governing movement and eligibility
Reduced exposure to ad hoc legal challenges
A framework for coordinating behavior that is consistent with applicable law
Such a system does not guarantee favorable outcomes.
It provides a set of constraints within which outcomes are determined.
That distinction matters over time.
VIII. Alignment and Incentives
Institutional incentives are not static.
They evolve with the system itself.
As costs continue to rise, and as legal uncertainty persists, the relative appeal of a more structured model increases. What may initially appear as a constraint can, under different conditions, function as a form of protection.
This is not a matter of preference.
It is a function of incentives.
IX. Conclusion
The current system offers institutions significant advantages.
It also places them in a position that is less stable than it appears.
Revenue is strong, but costs are expanding. Control remains, but is more limited. Legal risk is no longer abstract.
These conditions do not produce immediate change.
They do, however, shape the direction of it.
Over time, institutions are likely to favor a framework that restores a measure of predictability and alignment between authority, economics, and legal constraints.
The question is not whether that preference will emerge.
It is when.
https://www.cbssports.com/college-football/news/college-sports-commissions-nil-clearinghouse-strained/
https://www.reuters.com/sports/report-rutgers-transfer-seeking-nil-deal-suing-ncaa--flm-2025-03-25/