Fascinating Ruling by SCOTUS on Athletes vs the NCAA

This post is by Jeff Carter from Points and Figures

Just handed down today.  Justice Gorsuch wrote the opinion with Kavanaugh concurring.  This opinion will have some far-reaching and unanticipated effects.  It opens up a lot of ways for athletes to monetize their skills.  It also will put a lot of undue pressure on kids in high school on down to grade school.  I suspect much of that pressure will come from parents seeking to mine gold off their kid’s athletic ability.

There are a lot of angles here.  One is the obvious one about athletes making money.  My gut tells me that athletes will create scalable startups that solve problems in this space because they are closest to the problem and feel the pain.  Already we are seeing some.  Brandon Wimbush has a platform. He played QB at Notre Dame.  But prior to him, Serra Ventures funded Opendorse in Champaign, IL.

However, I think the ruling creates a lot of uncertainty that will be fun to watch play out in the ensuing years.

In microeconomics, one of the interesting battles to watch is the contest between producer surplus and consumer surplus.  Who gets more?  The Supreme Court just opened up a huge battle for that surplus between the NCAA and the athletes.  There is also a surplus that each athlete will have to fight for.  The thing is in this case, it’s not a fixed pie.  I suspect the ruling will grow the market.

What happens to team dynamics?  The star will grab most of the money (Read more...)