Reconciling burden of proof in antitrust cases involving multi-sided platforms with judicial precedent in Bazemore v. Friday & Sobel v. Yeshiva

Ted Tatos 
Empirical Analytics, LLC

The treatment of multi-sidedness in antitrust cases has been the subject of recent attention in the Ohio v. American Express matter.  The point of this article is neither to reiterate nor to summarize the arguments made by both sides and detailed extensively in the parties’ legal briefs as well as those of amici, but rather to address a specific argument regarding burden of proof.  Briefly, multi-sided platforms serve as intermediaries between two or more agents where indirect network externalities exist between them.  In other words, such platforms bring together groups of agents that can mutually benefit each other, but high transaction costs make their interaction prohibitively expensive.  The intermediary platform allows them to interact without incurring such costs.  A typical example offered is that of video game platforms, which bring together players and video game developers.  Players benefit from more developers on a platform, and video game developers benefit by creating games for platforms that have many players.  On this point, Rochet and Tirole (and subsequently, Evans and Schmalensee) have drawn the distinction between membership and usage externalities.

The debate surrounding the definition of multi-sided markets in antitrust focuses on two issues:

1) should the effects of a restraint on one side of the market be measured against potential pro-competitive effects on the other side, or is a showing of antitrust injury on one side sufficiently probative of anticompetitive conduct, and

2) should the Plaintiffs bear the burden of proof of showing that the restraint’s net effect across all sides is anti-competitive, or should the burden shift to the Defendant after the Plaintiff shows antitrust injury on one side? 

This commentary deals with the latter.  I argue that levying the entire burden of proof on the Plaintiff would be inconsistent with judicial reasoning and precedent set forth both in the Supreme Court’s seminal Bazemore v. Friday (478 US 385 – 1986) decision and the Second Circuit’s decision in Sobel v. Yeshiva (Sobel v. Yeshiva University, 839 F. 2d 18 – 1988).  Both cases deal with issues involving regression analysis, but the reasoning therein applies equally to the burden of proof in multi-sided markets.

In Ohio v. Amex, the Second Circuit found that:

“Under the direct method of proving by the rule of reason that Amex violated § 1, Plaintiffs bore the initial burden to show that Amex’s NDPs have ‘an actual adverse effect on competition as a whole in the relevant market.’ K.M.B., 61 F.3d at 127…the Plaintiffs’ initial burden was to show that the NDPs made all Amex consumers on both sides of the platform—i.e., both merchants and cardholders— worse off overall…Without evidence of the net price affecting consumers on both sides of the platform, the District Court could not have properly concluded that a reduction in the merchant‐discount fee would benefit the two‐sided platform overall.”

The 2^nd Circuit’s decision effectively placed the evidentiary burden for demonstrating anticompetitive conduct in the entire market on the Plaintiff.  To understand why this represents such an enormous burden, consider the NCAA’s economics expert, Prof. Kenneth Elzinga’s view of the college or university market in the Grant-in-Aid Cap Litigation matter, as demonstrated by the figure in his expert report.

Source: Report of Kenneth Elzinga, March 21, 2017, In Re NCAA Grant-in-Aid Cap Antitrust Litigation.

Though in this matter, the parties stipulated to the definition of the market as one-sided, and the Court excluded the testimony of Prof. Elzinga as irrelevant to the remaining issues in the case, his report nevertheless informs the burden Plaintiffs would face under logic imposed by the Second Circuit in Ohio v. Amex.  Plaintiffs would have to investigate potential anticompetitive conduct across the entire market covered by all the various agents involved in the multi-sided platform. As Prof. Elzinga’s figure demonstrates, this burden could be considerable, if not insurmountable, particularly where platforms with more than two sides are involved. Moreover, this astronomic burden is inconsistent with judicial precedent in cases involving similar logical reasoning.

The Chicago School view of consumer welfare as the overarching aim of antitrust jurisprudence holds sway under current judicial orthodoxy.  Consumer welfare, however, is a latent variable. Since it cannot be observed directly, we measure it through inferences drawn from other observable variables that bear a theoretical nexus to consumer welfare. Chief among these variables is output.  The total consumer welfare on a multi-sided platform may be expressed as a function of the effects on individual participating agents (sides). Of course, the measurement involves some degree of error, as the standard is reasonable, not absolute, certainty.  

In this regard, the estimation of the platform-wide consumer welfare effects from a restraint imposed on one or more agent(s) in the platform can be expressed in the same fashion as one would express a regression equation.  There is nothing novel about this approach, as econometric evidence of consumer welfare effects on one side is commonly presented in litigation as indicative of anticompetitive conduct.  But, suppose we were to extend this to the whole market, as the Second Circuit indicated in Ohio v. Amex.  The 2nd Circuit's logic appears to imply that such an equation must include all measurable variables that may affect total consumer welfare.  This approach runs directly counter to the Supreme Court’s seminal decision in Bazemore v. Friday.

In reversing the 4^th Circuit Court of Appeals, Justice Brennan delivered the Supreme Court’s unanimous opinion in Bazemore v. Friday, stating:

The Court of Appeals erred in stating that petitioners' regression analyses were "unacceptable as evidence of discrimination," because they did not include "all measurable variables thought to have an effect on salary level." The court's view of the evidentiary value of the regression analyses was plainly incorrect. While the omission of variables from a regression analysis may render the analysis less probative than it otherwise might be, it can hardly be said, absent some other infirmity, that an analysis which accounts for the major factors" must be considered unacceptable as evidence of discrimination." Importantly, it is clear that a regression analysis that includes less than "all measurable variables" may serve to prove a plaintiff's case.

The Bazemore Court also emphasized Defendants’ burdens in responding to Plaintiffs’ evidence:

Respondents' strategy at trial was to declare simply that many factors go into making up an individual employee's salary; they made no attempt that we are aware of - statistical or otherwise - to demonstrate that when these factors were properly organized and [478 U.S. 385, 404] accounted for there was no significant disparity between the salaries of blacks and whites.

The Second Circuit, in its Sobel v. Yeshiva decision, leaned on the Supreme Court’s finding in Bazemore v. Friday, opining that,

We read Bazemore to require a defendant challenging the validity of a multiple regression analysis to make a showing that the factors it contends ought to have been included would weaken the showing of a salary disparity made by the analysis.

Likewise, the District of Columbia Circuit Court of Appeals, in Palmer v. Schultz, opined that

Implicit in the Bazemore holding is the principle that a mere conjecture or assertion on the defendant's part that some missing factor would explain the existing disparities between men and women generally cannot defeat the inference of discrimination created by plaintiffs' statistics…The logic of Bazemore, however, dictates that in most cases a defendant cannot rebut statistical evidence by mere conjectures or assertions, without introducing evidence to support the contention that the missing factor can explain the disparities as a product of a legitimate nondiscriminatory selection criterion.

The Appeals Court in Palmer also referenced Baldus and Cole’s treatise, Statistical Proof of Discrimination, which noted:

…when otherwise relevant evidence is challenged on methodological grounds, the burden should normally be on the challenger (a) to present credible evidence that the statistical proof is defective and (b) to present a plausible explanation of how the asserted flaw is likely to bias the results against his or her position.

These arguments are consistent with the District of Columbia Court of Appeals’ opinion in Seger vs. Smith (738 F.2d 1249 (1984)), finding:

Of course, when a defendant claims that a specific factor was sufficiently objective to permit quantification, the defendant's failure to present alternative statistics incorporating the factor will severely undermine its rebuttal.

Together, these decisions consistently point to a burden-shifting approach to evidentiary showing.  

Contrary to the 2^nd Circuit in Ohio v. Amex, which placed the entire burden squarely on the Plaintiffs, courts in Title VII cases dealing with statistical evidence have shifted the burden of providing empirical evidence to rebut Plaintiffs’ allegations once an initial threshold has been met.  Once econometric evidence is presented that demonstrates Defendant liability, the burden then shifts to the Defendant to provide data it contends were missing and demonstrate that the inclusion of such data undermines the Plaintiff's case.  The Defendant's burden goes well beyond simply throwing stones at the model. 

That is not to say all Plaintiff models meet the threshold of admissibility.  The Bazemore Court noted that "There may, of course, be some regressions so incomplete as to be inadmissible as irrelevant;" Just as with any other expert testimony, evidence presented in markets involving multi-sided platform would be subject to Rule 702, which governs testimony by expert witnesses. But, by the logic applied in Bazemore, Sobel v. Yeshiva, and other cases cited above, that rule should be applied on the validity of the Plaintiff's model in one market.  Once Plaintiffs' model showing Defendant liability in one market is ruled admissible, or its admissibility goes unchallenged by Defendants, then the burden should shift to Defendants to provide expert evidence to demonstrate both the existence and the effects of multi-sided effects that Plaintiffs may have omitted. 

The 2^nd Circuit in Amex would elevate the threshold Plaintiffs must meet to the ceiling, thus standing in direct opposition to the burden-shifting logic adopted by the Courts with respect to statistical evidence.  Indeed, this same burden-shifting approach represents the most common method courts employ to adjudicate antitrust cases under the rule of reason. (see e.g., Michael Carrier, The Real Rule of Reason: Bridging the Disconnect, Brigham Young University Law Review, Vol. 1999, p. 1265)

Of course, one may respond by pointing out that the decisions cited herein deal with Title VII cases involving statistical evidence, not with relevant markets in an antitrust setting.  I find such a counter-argument unpersuasive. Courts are concerned with substance, not form (see, e.g., In Re Urethane Antitrust Litigation, 152 F.Supp.3d 357, in which the Court rejected a motion to exclude expert testimony, finding that “the Court is concerned with substance, not form;”). Whether in Title VII or antitrust cases, Courts attempt to balance the costs of committing errors of Type 1 (finding defendant liability where none exists) vs. Type 2 (rejecting defendant liability when it exists).  Lowering the risk of committing one type of error comes at the cost of increased risk of committing the other. The burden-shifting approaches advocated by the Supreme Court and appeals courts cited herein reflect this concern.

Daniel Rubinfeld offered this same burden-shifting alternative in his Columbia Law Review article Econometrics in the Courtroom.  Rubinfeld, who also discussed the nature of Type 1 and Type 2 errors in the context of the social disutility each may cause, noted, 

After some evidence of a relationship between sex and hiring is presented, the burden of production could then be shifted to the defendant to attack the plaintiff's hypothesis.

The shifting of the burden of production becomes more important when the number and forms of alternative hypotheses are more complex. This occurs naturally when defendants argue that  differential treatment of men and women is valid. One difficulty relates to the availability of information concerning possible discrimination. If the defendant has the data or other information that are necessary for the alternative hypotheses to be well specified, then it may be appropriate to make it easy for the plaintiff to shift the burden of production to  the defendant." (emphasis added)

Unfortunately, the Second Circuit’s decision in Ohio v. Amex ignores the role of such errors in determining burden of proof. Rather, it reflects a singular focus on errors of the first type, exposing future judicial decisions to a significant risk of errors of the second and society to considerable social costs.  In doing so, the Second Circuit's finding in Ohio v. Amex is clearly at odds with its own precedent in Sobel v. Yeshiva and Supreme Court precedent in Bazemore v. Friday. Should the Second Circuit’s approach be affirmed by the Supreme Court, it would levy a Sisyphean burden on Plaintiffs, allowing Defendants to successfully stave off antitrust challenges to multi-sided platforms by pointing to myriad factors that Plaintiffs may not have considered, regardless of whether Defendants have measured them or can even do so.

Call for Papers - Symposium on Monopsony Power and Labor Market Concentration

The Antitrust Bulletin will publish as special symposium on monopsony, buyer power, and labor market concentration, scheduled for Issue # 2 of 2019. I proposed the idea to the journal and the editors agreed, provided that I reprise my role as guest editor. The last issue of which I was the editor, the first issue of 2017, titled, "Symposium: Amateurism and Antitrust: Economic and Legal Perspectives on the Antitrust Issues Facing the NCAA's Collegiate Model" generated excellent papers from authors including Roger Blair (Univ. of Florida), Rodney Fort (Univ. of Michigan), Jayma Meyer (Univ. of Indiana), Matt Mitten (Marquette Law), Rich Sheehan (Notre Dame), and others.  (I hope the authors I did not mention take no offense, as I am equally grateful to all of them for their contributions to the symposium.)

I am excited for this upcoming symposium and hopeful that it will generate the same enthusiasm among prospective authors.  The role of monopsony power and labor market concentration has gained increasing research attention as of late, with one question being whether wage-depressing effects result from buyer power in labor markets.  The President's Council of Economic Advisers October 2016 Issue Brief discussed this point in some detail. For recent work on this topic, see e.g., Azar, Marinescu, & Stinebaum, 2017.  This issue, of course, is front and center in the ongoing NCAA Grant-in-Aid litigation, the outcome of which may shape the future of collegiate sports in the United States.

Another question, particularly for legal scholars and antitrust economists, is whether the Sherman Antitrust Act has anything to say on this matter. Is the Act's focus solely on seller power rather than buyer power? Should it be?  (For a sample discussion of this issue, see Marius Schwartz' 2004 comments to the FTC/DOJ merger enforcement workshop.)

As such, I reiterate my hope that this issue will spark the interests of prospective authors. I should mention that this is an interdisciplinary issue. Articles from legal scholars, antitrust economists, labor economists, and other disciplines are welcome, provided the key issue discussed deals with competition and antitrust (and, in particular, buyer power, labor market concentration, monopsony power, and factors that could affect those issues), given this journal's focus.  As with the previous symposium on NCAA amateurism, differing points of view and research findings are expected and warmly welcomed.  However, I would like to stress that the Antitrust Bulletin is a peer-reviewed journal.  Authors with existing or potential conflicts of interest are expected and required to mention them upon submission of the abstract or paper idea/title.

Now on to the details:

Paper deadline: 12/31/2018. 
If this deadline is too aggressive, please let me know and we can work around time constraints. We do not want valuable contributions to be excluded on this criterion.  However, to the extent that this deadline can be met, it is greatly appreciated. Papers then have to go through review, copy editing, etc.

Footnoting: Let me apologize in advance here. Yes, the Antitrust Bulletin uses the Bluebook citation standard.  This is not my requirement, but the journal's. Do I hate it? Yes. Do we have to use it? Also yes.  So, for authors primarily of economic journal papers, this means that we use no endnotes.  All citations are in footnotes using the Bluebook format. If you need details on this, I will happily provide them.

Style:
A few stylistic notes:
1.       Please include a brief abstract.
2.       Please add four or five key words following the abstract.
3.       Author credentials should be in an asterisk footnote.
4.       Please use type face 12 throughout, including footnotes, which should also be double spaced.

There are no length limitations, though authors may want to consider placing more technical discussions as appendices to the article.

Also, an important note, particularly for those using machine learning and/or complex econometric techniques: Please keep the journal's audience in mind. My hope is that this issue will provide a bridge between disciplines to gain a greater understanding of the role of monopsonies in competition and whether existing legal statutes address any potential dangers labor market concentration may pose.  As such, legal scholars may not be familiar with the econometrics vernacular, nor economists with certain legal concepts. While authors may find it occasionally cumbersome to explain such concepts and techniques to the uninitiated, please know that not doing so may result in an otherwise brilliant paper being "lost in translation" and not reaching a potentially receptive audience.

Peer Review:

The Antitrust Bulletin's editor is William J. Curran III.  The economics editor is Mark Glick.  Click here for more information on the journal's editorial board. As the guest editor of this issue, I hope to repeat a similar peer review process used in past issues.  That is, each author will anonymously review two other authors' papers. Our editorial team will also review the papers and provide comments.

Contact:

For any questions or comments (and, of course, commitments to contribute a paper!), please feel free to contact me at ttatos@eaecon.com.  For those who use Twitter, you can also direct message me at @TedTatos.

 

A Response to Dan Dakich's Disingenuous Attacks on College Athlete Rights and Frank Kaminsky

Immediately before the commencement of the 2017 NCAA Division I men's basketball tournament final between North Carolina and Gonzaga, sports commentator Dan Dakich engaged in a strongly-worded Twitter exchange with former Wisconsin and current NBA player Frank Kaminsky.  Dakich derided the idea that college athletes are exploited, to which Kaminsky responded that Dakich had no idea what he's talking about.  Dakich then launched into various acrimonious attacks calling Kaminsky "clown" and "son".  Dakich also continued making other largely antagonistic comments that are the province of those whose position has been exposed as tenuous at best, yet choose to defend it with ad hominem attacks rather than facts.

I decided to write this not because Dakich deserves any attention, because he does not, but rather because the arguments he used to "support" his position are simply false.  Unfortunately, many treat these arguments as persuasive, rather than disregarding them as the "alternative facts" they are.  In short, Dakich argues that college athletes are not exploited, they're paid, and have no value beyond that granted to them by wearing their respective schools' jersey.  Of course, anyone with the most basic understanding of sports realizes Dakich's claims are nonsense.  So, let's look at each of Dakich's comments and compare them with the facts.

1. Dakich claims college athletes only work 20 hours per week.  The exchange started with this Dakich tweet: "NCAA..only place 18-24 yr old Athletes make $20,000 to $60,000 for 20 hr a week work only 8 hrs work in the summer months and r "exploited".

This is a common falsehood perpetuated by those who pay little attention to actual data.  The "20" hours comes from the NCAA's rule that mandatory activities not exceed 20 hrs/week. The problem with relying on this figure is that it ignores the fact that athletes have to spend much more time than this, because many of their activities involved athletics yet do not count as a Countable Athletically Related Activity, or CARA.  Here's the evidence:

a) In the O'Bannon v. NCAA case, NCAA President Mark Emmert was questioned by Bill Isaacson, attorney for the Plaintiffs regarding a document prepared by the NCAA's own former vice president and senior policy advisor, Wally Renfro.  The NCAA document states:

"WE KNOW FROM A COUPLE OF SURVEYS WE HAVE DONE... STUDENT ATHLETES SPEND AS MUCH 45 HOURS A WEEK ON THEIR SPORT, MORE THEY SAY IN SOME CASES THAN THEIR ACADEMICS.
WHAT DO WE WANT TO SAY ABOUT THIS? I'M TORN. WE HAVE A 20-HOUR RULE FOR STRUCTURED ACTIVITY. WE HAVE A WINK-AND-A-NOD APPROACH TO VOLUNTARY ACTIVITY."

O'Bannon v. NCAA transcript at 1886-1887.

b) Here is the evidence directly from NCAA's own surveys.  The following is from a presentation the NCAA's Chief Medical Officer, Brian Hainline, made at an ACGME (Accreditation Council for Graduate Medical Education) Symposium.  As the chart below shows, FBS athletes spend over 40 hours a week on athletic activities, and men's basketball players spend nearly 40.

But, what about the claim that athletes only spend 8 hours on their sport in the off-season?  The data also refute this claim.  Approximately 70% of MBB and FBS athletes report spending as much or more time on athletic activities in off-season than in-season.  Of course, this number may drop in the summer months, though many athletes remain at their school for summer classes where they also engage in frequent unscheduled and unsupervised practices.  See below:

Further, the NCAA reported in its Division I Time Demands Study, Summary of Findings, April 1, 2016 that head coaches' interests do not align those of college athletes:

 

These time demands have consequences.  Hainline's presentation showed that prescription drug usage among NCAA athletes increased from 2009 to 2013, with nearly a quarter of athletes using pain medication either with (18%) a prescription or without (5.8%) in 2013.  Perhaps more worrisome is that more athletes use ADHD medication without (8.8%) a prescription than with (5.8%) one.

2.  Dakich claims athletes "get a check" so they're paid, saying "That's complete crap..I got a check 30 yrs ago my son gets a check..lotsa $$$ in that check."

From a simple economic point of, his argument is nonsense.  Yes, athletes can receive "a check" in addition to their cost-of-attendance, generally in the form of a Pell Grant payment.  This is NOT a payment from the school or anyone else in exchange for the services they provide to the school.  This amount is currently up to $5,920, a mere pittance compared to the actual benefit the school receives from athletics. As I noted previously in a tweet, P5 schools alone earned $53 BILLION in revenues between 2003-2004 and 2014-2015.  Now, before anyone claims that "they also spend a lot", consider where schools spend these funds: lazy rivers, enormous facilities, massive coach salaries, all of which indicates that there is more than enough to pay college athletes for their services.

Thus, simply the fact that athletes receive some payment does not mean it is a fair payment in exchange for their services.  How many coaches would accept living in a dorm, receiving meals, and maybe a year's supply of free television as fair compensation for their services? I'd expect not a single one.  All of their payments are based on market rates, the same market rates athletes demand should be used to compensate them.

3.  Dakich claims athlete images are worth nothing without the school name, tweeting: "Clown..read my tweets..who has said anything about image btw ur "image" without WISCONSIN jersey is currently worth 0 zip nada."

Dakich's puerile commentary aside, his claim is entirely false. His risible claim would mean, for example, Ben Simmons name, image, and likeness (NIL) would have had no value beyond that created by his LSU jersey.  So, then, why was he the #1 pick in the NBA draft?  Why was he sought-after for endorsements if his image was only worth something because of LSU?  The same questions can be asked of Michael Jordan, Anthony Davis, Stephen Curry, etc.  Moreover, by Dakich's "logic", Lebron James image worth nothing when he was in HS.

Which brings us to the high-school issue. High school recruits have value even before they enter into college, as evidenced by the fact that college spend enormous sums recruiting them and attempting to entice them to attend their respective schools.  Jim Harbaugh famously spent over $10k per day on jet costs for recruiting trips during a 12-day period.  Schools, like Central Florida most recently, spend on lavish facilities, including a lazy river to attract recruits.

Moreover, shoe companies battle over top high school recruits, using trips to the Bahamas or other inducements to establish relationships that may translate into future post-collegiate endorsement deals.  Thus, it is clear that athletes have value before, during, and after college.  As such, it is abundantly clear that the value of a top recruit lies far less with what is written on the front of the jersey than what is written on the back.

For example, consider prep basketball phenom, Zion Williamson, whose dunks have already become the stuff of Internet legend and who is sought after by virtually every top program who has an inkling of hope they may land him.  Is there a single person, perhaps other than Dakich, who would claim that Williamson's jersey would only take on value once a school's name appears on the front?  It is abundantly clear that the value of the name of the sports program is buttressed by the fact that top athletes have their names on the back.  It is no different in the NBA or any other professional league.  Would Lionel Messi's jersey's value drop to zero if he were to leave Barcelona for Chelsea?  Of course not.

4.  Dakich claims playing basketball or sports isn't really work: "Working ur ass off" isn't playing basketball or lifting weights in my world..Mill work,construction etc is to me ..I've done both not close"

So, let's educate Mr. Dakich.  The idea that what college athletes do is work is not novel.  In fact, the 1929 Carnegie Foundation report “American College Athletics” noted, “He [the college athlete] works (for it is work, not play) under paid professional coaches..." (Howard J Savage, Harold W.  Bentley, John T. McGovern, & F. Dean, American College Athletics (Carnegie Foundation for the Advancement of Teaching, Bulletin Number 23, 1929).  As noted here, college athletes labor over 40 hours per week so their respective schools can make millions in revenues.  College athletes suffer injuries, often life-threatening, concussions, etc. all in the course of promoting their school.  In return, they receive cost-of-attendance for one year.  As was evidenced in the UNC scandal, the promise of an education can be an empty shell, as former athletes now suing UNC, which has admitted to "long-standing" academic fraud, found out.

Further, whether college sports is "work" to Dan Dakich, or whether he thinks athletes deserve compensation in exchange for their services  is entirely irrelevant.  If he and Doug Gottlieb, who claimed "Name and likeness guy is having a tough tournament. People can't pick out "stars" from a line-up. Tourney is on fire due to bracket/brands," think that college athletes truly have no value beyond that created by the school, remove the restriction and let's test that hypothesis. This is how the scientific process works.  Of course, there would be no reason for the NCAA to incur millions in legal fees to protect "amateurism" if the same results could be obtained without imposing the restraint against direct compensation.  Further, one may not think that making YouTube videos of Minecraft games is work, yet, as anyone with young kids likely knows, YouTuber Dan Middleton (Dan TDM) has become so popular, he's practically a member of everyone's family (including ours!).  The issue is not whether one thinks another person's labor is work or not, but whether the market is willing to pay for that labor.  Of course, we all know the athletes' labor is valued, as Ben Simmons, who said that during his college time at LSU, he was offered a “Bentley, a Wraith Rolls-Royce, watches, jewelry, a house . . . anything. It literally is anything. People coming at you, offering you things" all of which he was not permitted accept or risk losing his eligibility.  This is a clear indication that he has value.  Otherwise, why would anyone want to pay him directly, rather than paying the school, if the entire value can be ascribed to the name in front of the jersey?  Simply put, athletes have enormous value, and it is their value that drives the school's brand.  Has Michael Jordan not raised UNC's value?  Do schools not use the names of their top players, who have gone on to professional success, to advertise?

5.  Dakich claims athletes are doing well because they have money for tattoos and a dog: "Yeah? How do they afford the tats? Big ones across the chest and back! How do they afford having a dog? You have been lied to"

This is a common argument used to stir up resentment not only against athletes, but poor people in general.  I don't intend to get into the politics of Dakich's insensitive and ridiculous argument, but this sort of illogical babble deserves to be addressed.

This sort of "logic" is grounded on the presumption that poor people must "act poor" to be recognized as such.  As noted before, many college athletes do receive Pell Grant to help with expenses and to allow them to at least be normal college students to some degree.  Just because they get a tattoo or go out on a date, or dare to have a pet does not obviate the reality that they are exploited.  Nothing requires college athletes to live as hermits in order to placate the likes of Dan Dakich.  But, let's look at this from a purely economic standpoint.

In economic damages cases, the standard for calculating lost profits is called the "but-for" standard.  In other words, absent the alleged "bad act" by the defendant, what would the Plaintiff's profits have been?  Those are called the "but-for" profits, from which the actual profits are subtracted to arrive at lost profits, i.e., damages.  The damaged Plaintiff does not have to earn ZERO profits in order to be damaged.  Nor do the Plaintiff's profits have to be declining in order to make a claim that it has been damaged by the alleged actions of the defendant.  The standard is simple: what is the difference between but-for and actual profits?

In the case of athlete compensation, what is the difference between what athletes currently receive under the NCAA's "amateurism" restraint on trade and what they otherwise would earn "but-for", or absent the restraint?  This is what the athletes have lost because of the restraint.  The standard is not what ad hoc amount a TV commentator or radio personality thinks athletes are worth vs. what they receive.  While such a "standard" may gain some traction among those ill-informed about the actual plight of college athletes, it is based on nothing except opinion, without any sort of economic justification.