Paper No. 5

Why today’s system rewards revenue but erodes control—and why institutions must act before the next system is shaped without them.

"Competent power in the national government to regulate all matters of general concern... is a very essential ingredient in the organization of the Union."
— Alexander Hamilton, Federalist No. 7

Reform in college football will not occur unless the institutions that comprise the system—universities and conferences—conclude that change serves their interests. It is therefore necessary to address directly the question that follows from the prior papers: why would those who appear to benefit from the current arrangement choose to alter it?

At present, the answer may seem uncertain. Revenues have increased. Media rights agreements have grown in scale. The most prominent conferences have consolidated power and expanded their reach.

But these developments, while substantial, do not establish stability. They mask its absence.

This paper advances a central claim: the current system allows institutions to maximize revenue, but it does so within a structure that they do not control and cannot stabilize. A more structured system would reduce that risk, even if it imposes constraints on certain forms of immediate advantage.

I. The Illusion of Institutional Success

It is true that, at the highest levels of college football, revenues have reached unprecedented levels. Media agreements have expanded, conference distributions have increased, and the sport has achieved a scale that would have been difficult to imagine in prior eras.

But revenue growth alone is not a sufficient measure of institutional health.

The present system requires institutions to operate within an environment defined by:
- Legal uncertainty regarding compensation and eligibility rules
- Escalating financial commitments without corresponding structural controls
- Continuous renegotiation of roster composition through the transfer portal
- Increasing dependence on informal and external compensation mechanisms

These conditions do not reflect a stable system. They reflect one that is extracting value while its underlying constraints weaken.

The present system rewards success. It does not protect it.

II. The Escalation Problem

In the absence of enforceable limits, competition among institutions produces predictable results.

Programs seek to:
- Outspend competitors in recruiting and retention
- Expand NIL commitments through affiliated collectives
- Replace underperforming players through transfer acquisition
- Maintain competitive parity through continual roster turnover

Each of these actions is rational in isolation. Collectively, they produce escalation.

No institution, however well-resourced, can opt out of this dynamic. Each participant must continue to increase commitments simply to maintain position. The absence of enforceable limits ensures that restraint is punished and expansion is required.

In such a system, success does not produce stability. It produces higher costs.

This is not a sustainable equilibrium. It is an arms race.

III. The Erosion of Legal Control

The current system is not only economically unstable. It is legally deteriorating.

For decades, the NCAA and its member institutions relied on a combination of tradition and judicial deference to sustain a system of coordinated rules governing compensation, eligibility, and athlete movement. That foundation has steadily eroded.

The process did not occur all at once. It has unfolded over time, through a series of decisions that have progressively narrowed the range of permissible institutional control.

In NCAA v. Board of Regents, the Supreme Court made clear that the NCAA was subject to antitrust scrutiny, even while suggesting that some degree of coordination might be necessary to produce college athletics as a product. That suggestion was, for many years, treated as a form of limited protection.

In O’Bannon v. NCAA, that protection began to weaken. The Ninth Circuit rejected the NCAA’s prohibition on certain forms of athlete compensation, recognizing that such restrictions could violate antitrust law. The concept of amateurism, while not abandoned, was no longer sufficient to justify broad restraints.

In NCAA v. Alston, the Supreme Court confirmed that NCAA rules are subject to ordinary antitrust analysis. The Court unanimously rejected the NCAA’s position and emphasized that its restrictions are not entitled to special treatment. Justice Kavanaugh’s concurrence made explicit what had become increasingly apparent: many of the remaining limits on athlete compensation may be difficult to justify under existing law.

Recent eligibility challenges have extended this trajectory. Cases involving athletes such as Trinidad Chambless and Owen Heinecke have demonstrated the willingness of courts to intervene where eligibility rules constrain opportunity without sufficient justification. These decisions are not isolated. They are part of a pattern.

The direction of that pattern is clear. Each successful challenge further constrains the ability of institutions to impose coordinated limits. Each adverse ruling reduces the set of rules that can be confidently enforced.

The result is a system in which institutions attempt to regulate conduct through mechanisms that may not survive judicial review. Rules exist, but their durability is uncertain. Enforcement actions may be taken, but their outcomes cannot be assured.

Institutions are therefore not operating within a stable legal framework. They are operating within one that is being incrementally dismantled.

This has practical consequences. Planning becomes more difficult. Policies are adopted with caution. Enforcement becomes inconsistent. The ability to coordinate across institutions—once the defining feature of the system—diminishes.

A system that cannot reliably define or defend its own rules cannot long remain in its present form.

What has been weakened by decision will not be restored by assertion.

IV. The Coordination Problem

Institutions do not operate independently. They operate within conferences, and conferences operate within a broader competitive ecosystem.

This creates a coordination problem.

Even where institutions recognize the inefficiencies of the current system, they are limited in their ability to act unilaterally. Any attempt to impose internal discipline—whether financial, competitive, or structural—risks placing that institution at a disadvantage relative to its peers.

Conferences face a similar constraint. While they may coordinate among their members, they remain in competition with other conferences for media value, postseason access, and competitive success.

The result is a system in which all participants may recognize the need for change, but no participant can achieve it alone.

V. The Value of Enforceable Structure

A more structured system offers institutions something that the current one does not: enforceability.

Through a collectively agreed framework, institutions could:
- Establish defined limits on compensation structures
- Create predictable roster management rules
- Reduce the volatility associated with unrestricted transfers
- Align incentives across participants

Such a system would not eliminate competition. It would define its terms.

In doing so, it would allow institutions to plan, invest, and operate within a stable environment rather than one subject to continual revision.

VI. The Role of Conferences

Conferences are not merely participants in the current system. They are its organizing units.

As such, they will play a central role in any transition.

In the near term, reform must occur with conferences largely intact. Over time, however, conferences may evolve in function—from independent governing entities to components of a broader federated structure.

This evolution would not diminish their importance. It would redefine it.

VII. The Tradeoff

The decision before institutions is not whether to preserve the current system in its entirety or to abandon it completely.

It is whether to continue operating in a system that maximizes short-term gain while exposing participants to long-term risk, or to adopt a structure that moderates certain forms of immediate advantage in exchange for durability.

This is not an unfamiliar tradeoff. It is the same one confronted in other industries in which unregulated competition produces instability.

VIII. The Risk of Waiting

The present system allows institutions to generate substantial revenue. That fact, standing alone, creates the appearance of stability.

But revenue growth is not the same as structural security.

Institutions today are exposed to:
- Legal developments that may invalidate core operating assumptions
- Cost escalation that cannot be unilaterally controlled
- Competitive pressures that require continual reinvestment
- Governance fragmentation that limits coordinated response

These risks do not manifest all at once. They accumulate.

The danger, therefore, is not immediate collapse. It is gradual loss of control.

A system that appears to function well in the present may, over time, become increasingly difficult to manage. Decisions are made reactively. Constraints are imposed externally. The ability of institutions to shape outcomes diminishes.

The question facing institutions is not whether the system will change, but who will determine the form that change takes.

Those who engage early will shape the rules, the structure, and the distribution of value in the system that follows. Those who delay will inherit it.

In this context, delay is not neutrality. It is a choice to accept a future defined by others.

IX. From Maximization to Stability

The present system rewards maximization. It encourages institutions to pursue every available advantage, even where those advantages are temporary or unstable.

A more durable system would instead prioritize stability.

This does not mean reducing competition. It means structuring it in a way that is sustainable over time.

The institutions that recognize this distinction earliest will be best positioned to shape the system that follows.

Those that do not will ultimately be required to adapt to it.