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Freakonomics Radio

648. The Merger You Never Knew You Wanted

with Dominique Foxworth, Victor Matheson, Jeffrey Kessler, DeMario Smith, Oliver Luck

Published October 3, 2025
View Show Notes

About This Episode

Host Stephen Dubner explores an ostensibly "absurd" idea: merging the NFL with NCAA football (and possibly the NBA with NCAA basketball) and introducing promotion and relegation, using it as a lens to examine the economics and governance of big-time American sports. The episode details how college sports historically exploited unpaid athletes, the legal and economic changes brought by NIL and antitrust litigation, and how this evolution makes top-tier college sports increasingly similar to professional leagues. It also examines the NFL's cartel-like power, antitrust exemptions, public stadium subsidies, and why a more open, competitive system might address problems like tanking and entrenched inequality.

Topics Covered

Sports economics NCAA NFL business model Unions and labor relations Promotion and relegation College sports Name image and likeness (NIL) Antitrust Stadium financing Labor and workforce issues

Disclaimer: We provide independent summaries of podcasts and are not affiliated with or endorsed in any way by any podcast or creator. All podcast names and content are the property of their respective owners. The views and opinions expressed within the podcasts belong solely to the original hosts and guests and do not reflect the views or positions of Summapod.

Quick Takeaways

  • Big-time college sports have long operated on a model where coaches and administrators are highly paid while most athletes, who generate the bulk of revenues, historically received no direct compensation beyond scholarships.
  • Legal challenges led by Jeffrey Kessler and others have dismantled key parts of the NCAA's amateurism model, enabling NIL deals and direct revenue sharing that could give Division I athletes roughly 50% of generated revenues.
  • Economist Victor Matheson argues that most college athletes are non-revenue generators, but top football and basketball programs function as commercial entertainment enterprises that previously exploited players as unpaid labor.
  • The NFL and other U.S. leagues benefit from antitrust exemptions, collective bargaining structures, and public subsidies for stadiums, creating a powerful cartel that faces little external regulation or oversight.
  • Promotion and relegation systems in European soccer create strong incentives against tanking and keep late-season games meaningful, a structure some guests see as exciting but unlikely to be adopted quickly in U.S. leagues.
  • The liberalization of the transfer portal and NIL has effectively professionalized many college athletes, raising questions about identity, fan attachment, and the continuing role of universities.
  • Public financing has paid for a substantial share of modern U.S. sports stadiums, with team relocation threats used as leverage even for chronically unsuccessful franchises.
  • Oliver Luck contends that the U.S. remains the global model for monetizing sports, but acknowledges that college athletics are rapidly converging toward professional structures in compensation and management.
  • Dubner's proposed merged, multi-tier league linking the NFL and NCAA with promotion and relegation is rated as "probably an eight" on a 1-10 nuts scale by Oliver Luck, suggesting it is provocative but not wholly unthinkable.
  • Future developments are expected to include direct team payments to athletes and likely unionization of college players, making top-level NCAA football and basketball structurally similar to the NFL and NBA.

Podcast Notes

Introduction: Dubner proposes an "absurd" merger idea between pro leagues and college sports

Framing the merger concept

Dubner clarifies he is not proposing other high-profile mergers (countries, soda companies, political parties, or religions)[0:58]
• Mentions previous episode about merging the U.S. and Mexico and interviewing Vicente Fox, who did not support that idea
• References a past episode about America's two-party "duopoly" and the idea of Republicans and Democrats merging
• Says a merger among Christians, Muslims, and Jews would be an "interesting conversation" but is not the topic here
States his actual proposal: merge the NFL with NCAA football, and possibly the NBA with NCAA basketball[2:23]
• Frames it as having a "religious feeling" for some people because of how devoted fans are to these sports
• Acknowledges the idea sounds absurd but argues for the value of absurdism when pragmatism is failing

Identifying problems in current U.S. sports structures

Claims big-time sports in the U.S. have serious problems despite financial success[2:47]
• Hints at college sports "imploding" as the amateurism "pillar" crumbles like an old Greek temple in an earthquake
• Notes that pro leagues are always trying to expand but also have competition issues, like tanking for better draft picks
Describes the NFL's monopoly position and introduces idea of opening it to competition[3:28]
• Imagines replacing a single closed league atop an amateur pyramid with a system where lower-tier teams can be promoted and top-tier laggards relegated
• Notes this structure mirrors most soccer leagues worldwide and reminds listeners that soccer is the most popular sport in human history
Anticipates resistance to the merger idea[4:00]
• Says billionaire NFL owners would hate risking the value of their franchises
• Says some college fans want to cling to a "vanishing" past of amateur sports
• Describes the idea as "plainly" absurd but wants to test just how absurd it is
Gets a first sanity check rating on the idea[4:29]
• Notes that on a 1-10 scale (1 = fantastic, 10 = nuts), someone rated the idea an 8, meaning it's 20% of the way toward fantastic

Understanding big-time college football through Dominique Foxworth

Foxworth's background across playing, unions, and media

Introduction of Dominique Foxworth[5:22]
• He describes himself as a sports analyst currently
• Says he got into sports "the normal way" by being really good at them, playing in college and then for several NFL teams
Union leadership and business school[5:46]
• While in the NFL, he served as president of the Players Union for a couple of years during collective bargaining agreement (CBA) negotiations
• Explains the CBA is a 456-page contract between NFL players and team owners
• Says union work pushed him to go to business school
Roles in basketball union and sports media[6:03]
• After business school, he became chief operating officer for the NBA Players Association
• Then transitioned to sports media, giving him experience on multiple sides of sports

How proximity to the business changed his perception of football

Erosion of camaraderie and "family" myth as stakes rise[6:30]
• Says TV projects an image of camaraderie that fades as you get closer to the professional ranks, especially for non-star players
• In high school, many players' dreams already end; in college, top players feel cocooned, but mid- and lower-tier players see scholarships taken and injuries not covered by workers' comp
• At the pro level, highly drafted players or successful quarterbacks feel valued until injury or poor performance reveals that decisions are primarily business-driven
• Says once in media, it's obvious that teams and organizations treat decisions as business choices

Early recognition of college sports exploitation

Dubner and Foxworth's prior connection over a college sports documentary[7:48]
• Dubner recalls approaching him via the Players Association for help finding economists for a documentary about how exploitive college sports were
• Foxworth confirms and says polling at the time showed many people did not see what he thought was an "obvious" revenue-generating exploitation issue
The "obvious fact" that big-time college sports are revenue enterprises[8:09]
• Says his union background and understanding of business made it clear that major college sports were revenue-generating and needed to be explained to the public
Freshman year at Maryland as an awakening[8:27]
• He chose the University of Maryland partly because they had been bad the year before, increasing his chance to play as a freshman
• Team went 10-1, lost the bowl game, and had a great season leading to a contract extension for the head coach
• Assistant coaches received a Cadillac deal and drove free Cadillacs, while players got only a DVD player and a bag of sweatshirts for the Orange Bowl
• He recalls thinking "this ain't right" when comparing coaches' rewards to players' token gifts

Comparing unpaid college labor to other economic sectors

Scarcity of analogous situations in the broader economy[8:59]
• Foxworth says he cannot think of many other parts of the economy where so much unpaid labor produces revenue while coaches and administrators are paid
• Offers child actors as the closest analogy: a uniquely talented 12-year-old actor can anchor a show and deserves to be paid
• Argues that college athletes, like child actors, possess rare, valuable skills and should not be compelled to be "amateur" for years before earning money

Lived experience of inequality within the college team

Ambivalence: enjoying college while seeing injustice[9:49]
• Foxworth distinguishes between the "right" answer and the honest one, then says honestly he loved his college experience and had a great time
• Complaining in the locker room about perceived injustices was part of that experience
• He stayed healthy, played well, was drafted, and feels it "worked out" for him personally
Harsh outcomes for teammates without star status[10:15]
• Notes that when Maryland played well, it attracted higher-quality recruits, requiring scholarships to be freed up from somewhere
• Some players had their scholarships taken away; they left with a bag of sweatshirts, some memories, and transfers to smaller programs like Hofstra
• Says those players' experiences likely weren't as good as his; injured friends saw their treatment and respect from coaches decline
• Adds that even he was not treated as a "full human being," emphasizing the limits of how players are viewed

Economist Victor Matheson on NCAA economics and exploitation

Scale and revenue distribution in Division I sports

Growth of college football's financial importance[11:15]
• Dubner notes that Division I sports generate nearly $20 billion annually, with around 75% from football and 15% from men's basketball
• Matheson is introduced as a sports economist at the College of the Holy Cross

The term "student-athlete" and wage suppression

Why Matheson calls "student-athlete" a made-up term[12:03]
• He says "student-athlete" was created by the NCAA to avoid using the term "worker"
• Argues these individuals work for the college, often make money for it, and should be treated like any other workers, who are typically paid
• Rejects the notion of a mandatory 1-4 year unpaid internship for a tiny chance at the NBA

Historical enforcement of amateurism: the Sanity Code

How the Sanity Code sought to end pay for players[12:53]
• Says athletes had long been paid under the table; by the 1950s, schools wanted to stop that "rat race", so the NCAA implemented the Sanity Code banning pay
• Comments that the code was only "sane" from the employers' standpoint and "insane" for employees
Scholarships as a partial concession[13:11]
• Over time, the rules relaxed somewhat to allow scholarships and room and board
• Matheson says for the overwhelming majority of athletes in most sports and at most schools, scholarships are more than fair compensation given their lack of positive revenue generation
• Most athletes generate zero or negative net revenues because sports are expensive to run

Cross-subsidies and where the money really goes

Non-revenue sports at schools like Holy Cross and Ohio State[14:46]
• Matheson cites men's golf at Amherst, women's rowing at Holy Cross, and women's soccer at Ohio State as examples of teams that don't cover their costs
• Notes Holy Cross generates essentially zero revenue from tickets and media but has as many athletes as Ohio State
Role of big-time football revenue at major schools[15:04]
• Confirms some big money is redistributed from football to non-revenue sports at schools like Ohio State
• But challenges claims that such programs could not exist without football money, pointing to Holy Cross's ability to run women's soccer without football revenues
High coaching salaries as a symptom of constrained player pay[15:41]
• Typical NFL team: about $500 million revenue, top coach earning around $10 million (~2% of revenue)
• Typical top college football coach also earns ~$10 million, but on a program generating ~$100 million (~10% of revenue)
• Thus, college coaches take roughly five times the revenue share of NFL head coaches and infinitely more than players who receive no salaries
• Explains that in a system where players can't be paid, schools compete by over-spending on famous coaches and lavish facilities like $25,000 lockers
• Says pro players would choose $25,000 in cash over a $25,000 locker, but college recruits choose among fancy facilities since they receive no direct pay

Legal transformation of college sports compensation with Jeffrey Kessler

Kessler's background and motivation

Personal influences and career path[19:05]
• Jeffrey Kessler is a New York City lawyer specializing in antitrust and sports lawsuits, and a partner at Winston & Strawn
• He grew up in Brooklyn idolizing Muhammad Ali and Kurt Flood as athletes who stood up for social justice
• Says he never dreamed his career would further similar interests but that is what happened
How he chooses cases and gets paid[23:03]
• Explains that as a large-firm partner he usually bills hourly, but in some class actions like the college players case, fees are paid by the other side with court approval if they win or settle
• Says he only takes on a few cases like this, when he believes they are right, likely to win, and worth the firm's investment

Describing the NCAA as a wage-fixing cartel

Uniqueness of the NCAA-athlete relationship[23:21]
• Kessler says the NCAA maintained a cartel that fixed athlete wages at zero, calling it uniquely exploitative
• States that nine U.S. Supreme Court justices-all of them-agreed the system was wrong in a key ruling
Why scholarships and "ladders" to the pros are not enough[24:32]
• Addresses the argument that athletes get free education and exposure to pro leagues, asking why that is insufficient
• Notes that at top football and basketball programs, about 90% of athletes will never play a day in the NFL, NBA, or WNBA
• Argues their only chance to monetize their athletic value is during college, yet revenues instead go to athletic directors, strength coaches, and others

Rejecting the myth that students cannot also be paid professionals

Why linking professionalism to university is not contradictory[25:38]
• Kessler says courts and even the NCAA concede that what makes college sports distinct is that athletes are students, not that they are unpaid
• Points out that students commonly work as actors, writers, or journalists, so there was no reason to invent amateurism except to exploit free labor
• His firm started its litigation campaign over a decade earlier, anticipating a long struggle requiring multiple cases

Key cases: O'Bannon, Jenkins, and Alston

O'Bannon as the opening salvo[26:52]
• O'Bannon challenged restrictions on players' images in video games and focused on group licensing rights
Jenkins and Alston, culminating in a Supreme Court win[27:42]
• Kessler filed Jenkins v. NCAA while co-counsel Steve Berman filed Alston; the cases were later consolidated
• Alston went to trial and then to the Supreme Court, where Kessler argued and won 9-0 in 2021
• The Alston ruling struck down NCAA limits on education-related compensation such as laptops, study abroad, internships, tutoring, graduate scholarships, and academic awards
• Alston also opened the door for NIL (name, image, likeness) compensation

NIL, collectives, and the House settlement: evolving models of pay

Victor Matheson on "real" NIL vs. collective NIL

Defining real NIL[28:25]
• Real NIL is described as market-based pay for an athlete's name, image, and likeness-endorsement deals, autograph signings, and social media monetization
• Examples include Paige Bueckers' million-dollar deal with Nike, appearances at car dealerships, and Livvy Dunn monetizing Instagram and TikTok
Defining collective NIL as quasi-professionalism[29:13]
• Collective NIL involves boosters or associated groups paying large sums, ostensibly for NIL, to attract players, often without actual marketing activity
• Describes a booster paying $100,000 for an "autograph" from a quarterback and not even asking for the autograph
• He calls this a backdoor professionalization of athletes, an evolution of longstanding booster systems
Recent examples of collective-driven talent concentration[30:18]
• Mentions a group of Duke alumni pooling money to buy better players and a big donor helping St. John's bring in talent despite recent underperformance
• Labels this "privately funded professionalism"

Matheson's criticisms of collectives

Unsustainability and weak contractual protections[30:52]
• Questions why a donor would keep giving $10 million annually to a program without a financial return, unlike pro owners who expect wins to produce revenue
• Notes problems with unenforceable or unfulfilled NIL contracts, citing a Holy Cross player who transferred to UNLV under a $100,000 NIL promise that never materialized
• Points out that having anonymous donors pay players is like a professor being hired without salary and told a wealthy alum might pay them later, which he calls the "worst job ever"

House v. NCAA: revenue sharing and direct pay

Basic structure of the House settlement[32:20]
• Kessler explains that the House case attacked the entire NCAA compensation system, leading to a settlement
• The settlement will allow schools to directly share revenue with athletes under a new system starting this year, with about $20.5 million per school in the first year
• Third-party NIL deals continue, as do scholarships, medical care, and other benefits
• Kessler says Division I athletes will receive roughly 50% of the revenues generated under the full package of compensation
Kessler's expectations vs. surprise at victories[33:33]
• He is not surprised by the string of legal victories but did not take them for granted
• Believed judges and juries were ready to see the system as exploitative, exemplified by Alabama's strength coach making $1 million and head coach over $11 million while players got none of the revenues

Transfer portal, parity, and fears about non-revenue sports

The transfer portal and fan attachment

Expanded freedom of movement[35:05]
• Dubner describes the liberalized transfer portal, where an athlete can play for four different teams in four seasons
• Notes the 2025 men's basketball Final Four had all #1 seeds, each with players who had previously played at other colleges
Kessler's defense of athlete mobility[35:38]
• Recalls how early in his career there was essentially no free agency in pro sports and owners claimed fans would dislike it, but fans now love free agency
• Says the portal allows backups to find starting roles and players to follow beloved coaches who themselves move as free agents
• Emphasizes athletes have limited eligibility; they should not be trapped when a coach leaves or does not play them
• Argues all other workers can quit and move, so restricting athletes' freedom is unjustified
• Says increased mobility reduces stockpiling of unused talent by the richest programs and helped expand competition in college football playoffs

Impact on smaller sports and Title IX

Will paying athletes shrink non-revenue sports?[37:06]
• Dubner raises concern that paying revenue-sport athletes might reduce funding for sports like women's golf, wrestling, or squash
• Kessler expects reallocation to come from athletic directors, strength coaches, and gold-plated facilities rather than from cutting non-revenue sports
• Notes that extra money hadn't been going to women's golf; it was funding high salaries and fancy locker rooms
Role of Division III and Title IX in sustaining broad sports offerings[37:53]
• Division III schools have no revenue sports to subsidize others yet still offer many teams because sports are part of educational and campus life, like acting or music departments
• Explains Title IX requires proportionally equal opportunity in sports for women and men, preventing wholesale cuts of women's programs
• Predicts some individual sports may occasionally be cut and schools may blame the House settlement, but he argues that will not be the true reason

Matheson's forecast: unionization and direct pay

Expected developments this decade[39:06]
• Matheson says in the near term it's hard to predict, but over this decade he expects teams or conferences to pay players directly
• Believes meaningful parity and coherent rules will require players to unionize, leading top NCAA football and basketball to resemble the NFL and NBA structure
Why the NCAA will not disappear entirely[40:19]
• Matheson argues the NCAA still plays crucial roles: setting playing rules and running championships like March Madness
• Calls championships a "natural monopoly" where one organizer makes sense, even though economists typically dislike monopolies

NFL power, antitrust, and public subsidies with DeMario Smith and Victor Matheson

DeMario Smith's background and view of NFL owners

Career path to leading the NFL Players Association[40:56]
• Smith served ~10 years as a federal prosecutor focused on homicide, violent crime, and terrorism, then became a partner at two law firms
• In 2009, he was elected executive director of the NFL Players Association, serving until 2023
His characterization of NFL owners and their influence[41:39]
• In his book, Smith writes that NFL owners use football as one of the most addictive and profitable "drugs" in American culture to influence elections and bully competitors while pursuing ever more wealth
• Says owners in the billionaire class influence healthcare, media, and news consumption, with disproportionate impact on American life

Lack of regulation and antitrust exemptions for the NFL

Smith's shock at regulatory vacuum[42:15]
• He took the job soon after the 2008 financial meltdown and was shocked that a multi-billion-dollar industry was beyond any regulator's purview
• Points out the NFL relies on public infrastructure, first responders, tax-exempt status, land grants, and bonds, yet has no government oversight, SEC filings, public board, or similar controls
• Says the only entity holding the league accountable is a relatively small union of about 1,800 players, forcing the union to "become the prosecutor"
Antitrust exemptions and broadcast power[43:48]
• States the NFL exists only because Congress granted an antitrust exemption to allow the AFL-NFL merger in the 1960s
• Explains the Sports Broadcasting Act allows the 32 teams to jointly negotiate exclusive national TV contracts, giving them huge leverage
• Says networks often lose money on NFL rights deals from direct ad sales and recoup losses via promotions and audiences for other programming
• Uses the example of Fox overpaying for NFL rights despite weaker programming, undermining CBS's dominance with "60 Minutes" and forcing CBS to buy back NFL rights

Matheson on leagues as cartels and antitrust workarounds

Three main ways U.S. leagues navigate antitrust[46:31]
• Matheson calls leagues collections of businesses that collude to make as much money as possible, meaning they inherently raise antitrust issues
• Describes MLB's unique judicially created antitrust exemption dating back over a century, where a judge declared baseball outside antitrust law
• Notes that other leagues gained limited antitrust exemptions for negotiating media rights; when courts initially found joint TV deals illegal, Congress intervened to legalize them with conditions
• Explains that Congress allocated Sunday to the NFL, Saturday to the NCAA, and Friday night to high school football, while allowing other days for competition
• Third workaround: collective bargaining with unions, which allows leagues to impose salary caps and roster limits as part of a negotiated agreement rather than illegal collusion

Stadium subsidies, relocation threats, and incentives to lose

Public financing of stadiums and shifting cost shares

The modern stadium boom[49:01]
• Matheson says a modern U.S. stadium boom began in the early 1990s, during which over half of all major-league teams in big sports replaced their stadiums and some expansion teams built new ones
• During that period, roughly two-thirds of costs were paid by taxpayers and one-third by teams
Effect of the 2008 recession on subsidy levels[50:15]
• Around 2008, public appetite for subsidies waned; from 2008 to roughly 2020, taxpayers covered about one-third of stadium costs on average
• Notes that stadiums have become far more expensive and there is an "arms race" as owners seek features they see in others' facilities
• Even at one-third public funding, the dollar amounts remain huge

Lease cycles, bargaining power, and relocation threats

30-year leases and shifting leverage[52:15]
• Stadiums built in the early 1990s often had 30-year leases, giving cities bargaining power until those leases expire
• When leases end, teams gain leverage to demand new stadiums or threaten to relocate
Recent examples of relocation and subsidies[51:47]
• Mentions the San Diego Chargers moving to Los Angeles and the Oakland Raiders moving to Las Vegas after using relocation to secure better deals
• Notes the Buffalo Bills stayed in Buffalo after New York Governor Kathy Hochul offered $850 million in public funding, a record taxpayer contribution for a stadium
• Highlights the Cleveland Browns receiving $600 million in subsidies despite only four winning seasons in 26 years, illustrating how being in the NFL cartel pays even for losing teams

Incentives to tank and the case for relegation

How current U.S. leagues reward losing[54:58]
• Matheson says in U.S. leagues teams may intentionally lose (tank) to improve draft position, giving them access to better players next season
• Argues fans hate seeing players not try to win and distinguishes between betting on oneself to win (Pete Rose) and intentionally losing (1919 Black Sox)
• Calls a system where teams keep top-tier status regardless of performance and sometimes profit from not trying a set of "bad incentives"
Dubner's simple fix: promotion and relegation[56:36]
• Proposes demoting the two or three worst teams each year to a lower league and promoting the best lower-tier teams, eliminating incentives to tank
• Says they will explore this solution after the break, linking it back to his broader merger idea

NFL dominance, global expansion, and Oliver Luck's multi-sided perspective

NFL's cultural and economic dominance

Ratings, franchise values, and the commissioner[59:27]
• Dubner notes 93 of the top 100 U.S. TV broadcasts in 2024 were NFL games, and the latest Super Bowl had over 125 million U.S. viewers and was the most watched show in TV history
• Says the U.S. has 47 of the world's 50 most valuable franchises, with the NFL as "king of kings"
• Mentions that the NFL commissioner, Roger Goodell, reportedly made about $125 million over a recent two-year period, which could be seen as either outrageous or a bargain given the league's success
Growing the product with more games and global reach[1:00:23]
• Regular season expanded from 12 games in the early 1960s to 17 now, with owners pushing for 18
• Upcoming NFL games are scheduled in São Paulo, Dublin, London, Berlin, and Madrid, showing intensified international expansion

Oliver Luck's career across leagues and roles

Overview of his executive journey[1:00:45]
• Luck describes himself as an independent sports executive doing consulting, with prior senior roles across multiple sports entities
• He worked for the NFL starting in 1990, ran NFL Europe (described as the NFL's AAA league), spent time in MLS and ran the Houston Dynamo
• Served as athletic director at his alma mater, West Virginia University, motivated in part by the increasing professionalization of college athletics
• Led the Harris County-Houston Sports Authority, a governmental entity tasked with financing and rebuilding aging sports infrastructure in Houston
Playing career and family ties to football[1:02:07]
• Luck was an NFL quarterback for five years with the Houston Oilers after a strong college career at West Virginia
• His son Andrew Luck became a star quarterback at Stanford and with the Indianapolis Colts and now works as general manager of Stanford's football program
• Notes that the GM role at a college program "barely existed" until recently, indicating how college football is copying professional organizational structures

Differences between college and pro football and the collapse of amateurism

Two traditional pillars: academics and amateurism[1:02:58]
• Luck says academics and amateurism were the two pillars distinguishing college from pro sports 40 years ago
• Academic pillar: athletes are students who go to class and can become ineligible if they fail
• Amateurism pillar: players were not paid; he says that pillar has now crumbled "like an old Greek temple" in an earthquake
Why preserving academics matters[1:02:58]
• Luck argues that maintaining academics is the only remaining "connective tissue" between fans, alumni, and programs now that amateurism is gone
• Alumni want successful teams but also care that players earn degrees and can start lives beyond sports
• He sees keeping an academic component as both ethically important for young people and financially important for alumni support

Promotion and relegation in European soccer and its emotional impact

Relegation battles as intense drama[1:04:23]
• Luck says top European clubs rarely face relegation, but mid-table and lower clubs often fight to avoid it, creating intense excitement
• Describes relegation deciders as the most exciting thing "known to mankind" for those communities
• Gives an analogy: if the Colorado Rockies risked relegation to a much lower level, fans would rally behind them to avoid that fate
Promotion's upside for small clubs[1:05:34]
• For small clubs like Portsmouth, England, promotion into the Premier League means hosting giants like Chelsea and seeing world-class players visit
• Luck says the excitement in such communities is "through the roof" when promotion looms

Prospects for broader or collective ownership in U.S. sports

Green Bay model and potential for colleges[1:06:02]
• Currently, only the Green Bay Packers have a form of collective ownership among major U.S. sports teams
• Luck suggests colleges could be leaders in experimenting with share-based models, especially as they spin athletic revenues into separate entities
• Proposes scenarios like buying shares in a specific team (e.g., Notre Dame fencing) with universities retaining control through differentiated voting rights

Dubner's merger and relegation proposal evaluated by Luck

Dubner outlines the merged multi-tier league concept

Constraints on NFL expansion and calendar[1:07:03]
• Dubner reasons that global expansion of American football faces limits, and the NFL likely doesn't want many more teams or further calendar stretching
Proposed structure linking NFL and NCAA tiers[1:08:52]
• He imagines NCAA football organized into multiple levels (AAA, AA, A) that effectively merge with the NFL into a single multi-tier system
• Teams would move between tiers through promotion and relegation based on performance, rather than fixed franchises in a closed top league
• Suggests similarly linking NCAA basketball with the NBA, with college programs formally professionalized
• Acknowledges complex questions about franchise operations and revenue sharing but posits a "bigger, better" combined professional ecosystem

Luck's assessment of the idea's feasibility

Rating the merger on the "nuts" scale[1:10:01]
• On a 1-10 scale (1 = fantastic, 10 = nuts), Luck rates the idea an 8
• Dubner, as a "glass 20% full" person, jokingly takes that as enough encouragement to keep exploring the concept

Looking ahead to Part 2

Further exploration of open systems and obstacles[1:10:41]
• Dubner previews that next episode will work through what the new scheme could look like and notes that from a non-American perspective, promotion/relegation may seem obvious
• Quotes a view that shifting from a current closed system to an open one would be wildly destructive and would require a "benevolent overlord" to implement

Closing credits and lighthearted coda

Production credits and acknowledgments

Staff and contributors[1:11:24]
• Dubner names production staff, mixer, composer, and people who helped inspire and think through the episode, including James McGinty and several others

Joking remark about NIL aesthetics

Foxworth humor about who benefits from NIL[1:11:47]
• A joking exchange suggests not all players benefit from NIL because some are less telegenic; Foxworth jokingly says in football, being ugly helps, while he had to "fight against" being "too damn handsome"

Lessons Learned

Actionable insights and wisdom you can apply to your business, career, and personal life.

1

When a powerful institution fixes compensation at zero for a group that generates significant revenue, you are likely looking at a cartel-like structure rather than a fair marketplace, and structural legal challenges may be required to rebalance it.

Reflection Questions:

  • • Where in your own industry might compensation norms be more a product of entrenched power than of genuine market forces?
  • • How could you distinguish between a situation that can be changed through negotiation and one that requires formal legal or regulatory intervention?
  • • What specific data about value creation and pay distribution in your organization would you gather to evaluate whether people are being compensated fairly?
2

Restricting worker mobility-whether through transfer rules, non-competes, or culture-tends to entrench incumbents and reduce competition, while carefully designed freedom of movement can spread opportunity and improve overall system performance.

Reflection Questions:

  • • In what ways are people on your team or in your field informally or formally discouraged from moving to better opportunities?
  • • How might increasing mobility or internal transfer options change the talent distribution and performance in your organization over the next few years?
  • • What is one policy, contract term, or norm you could advocate changing to give capable people more freedom to move where they can contribute most?
3

Incentive structures that reward losing-or at least do not penalize failure-create perverse behaviors; designing systems where performance meaningfully affects future prospects (like promotion and relegation) can keep effort and engagement high.

Reflection Questions:

  • • Where are you or your team effectively being rewarded for low performance or risk-avoidant behavior rather than for meaningful results?
  • • How could you redesign goals, bonuses, or recognition so that sustained underperformance has clear consequences and improvement is tangibly rewarded?
  • • What is one metric you rely on now that might be encouraging the wrong behaviors, and how could you replace it with a more aligned measure?
4

When direct compensation is prohibited or constrained, value often leaks out in distorted forms-like inflated executive salaries or gold-plated facilities-instead of reaching the people actually creating the value.

Reflection Questions:

  • • Looking at your organization's budget, which line items seem disproportionately large compared with their direct contribution to value creation?
  • • How might shifting even a fraction of spending from status goods (buildings, perks, titles) to direct rewards for contributors change culture and performance?
  • • What is one area where you could transparently link spending more directly to the people or processes that generate revenue or impact?
5

Aligning the interests of owners and workers through transparent revenue sharing and collaborative bargaining can turn adversarial relationships into growth partnerships, where both sides benefit from expanding the pie.

Reflection Questions:

  • • Where do you currently see misalignment between leadership's incentives and frontline contributors' incentives in your context?
  • • How could you introduce or improve a revenue-sharing or profit-sharing mechanism that makes success visibly mutual rather than zero-sum?
  • • What is one concrete step you could take this quarter to involve the people doing the work more directly in how the gains from that work are allocated?

Episode Summary - Notes by Reese

648. The Merger You Never Knew You Wanted
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