It’s Just Business ep 236: Buying Futures on the U.S. Congress Running the NCAA

This episode of It’s Just Business (Steve and Chris) covers three stories after some opening banter about election-season yard signs and Steve’s HOA special-assessment vote.

1. College football payrolls and the Protect College Sports Act

• Steve walks through The Athletic’s estimates of roster spending across 68 power-conference teams. Ohio State, Texas and Oregon top the list at roughly $45–55M. Duke, Boston College and Stanford sit near the bottom at around $12–15M.
• Every AP top-10 team spends more than $30M, and eight of them spend more than $40M. Steve’s view is that spending now largely determines who wins. He calls college football professional in everything but name and says it’s “ruined.”
• Chris points to Indiana as a clear case of buying a program. They hired JMU’s coach, who brought about 30 players with him through the transfer portal. Chris jokes that JMU fans claim a share of Indiana’s title.
• Both hosts wish the chart included non-power conferences and the Ivies for comparison.
• A Higher Ed Dive piece reports athletic-department deficits. UCLA’s is $241M, far ahead of Colorado, UNC, Kansas, Minnesota and Boise State.
• The Protect College Sports Act cleared a 74–24 procedural vote, and a final Senate vote is set for Monday. As described, the bill would:
  • allow one transfer without losing eligibility
  • cap age at 24 and eligibility at five years
  • cap revenue sharing at about $21M, with exceptions for retaining players and non-revenue sports
• Steve says it’s absurd that Congress has to step in and blames NCAA incompetence. Chris calls the bill a reasonable compromise and notes it’s the furthest federal legislation has ever gone on this issue. He thinks election-year politics helped speed it up.
• Chris also connects athletics costs to a broader squeeze on higher education. Enrollment is falling at schools like Syracuse and GW, and he suggests there may be a coming “university bubble.”

2. States vs. Kalshi and Polymarket

• New York has sued both prediction markets, and Polymarket has countersued and is trying to move the case to federal court. Other states taking action include Kentucky, Nevada, Arizona, Massachusetts, Michigan, Connecticut and Tennessee.
• Steve, drawing on his experience with derivatives in commercial lending, explains the companies’ argument. They say their products are federally regulated futures contracts or swaps, not gambling. He finds that unconvincing because real futures are tied to tangible goods or market forces.
• The key legal question, he says, is how broadly federal law defines what a future can be based on.
• New York is seeking treble damages plus $100K per wager. Steve estimates that could bankrupt Polymarket.
• Chris argues the states’ motives are lost tax revenue and the social costs of gambling. He expects DraftKings and BetMGM to back the states.
• Chris also argues prediction markets are far easier to manipulate than regulated sportsbooks. Steve cites a reported case of military personnel betting on Iran-war events they were involved in.

3. Private equity in pro sports

• MLB has raised its private-equity ownership limit, and the NFL is declining to follow for now. Stan Kroenke is buying the Angels, which adds to his roughly eight or nine franchises.
• Both hosts see leagues as wary of PE. The worry is that it replaces an owner who wants to win with investors focused on returns. That could mean payroll cuts, higher ticket prices, and more international games at the expense of local fans.
• Chris’s “cookie brand” analogy captures the point: the same package with cheaper ingredients.
• Steve closes by noting these are private businesses, free to make that choice and live with the market consequences.

The episode wraps with a quick lament about Washington’s season and a plug for The Hog Sty Podcast.