By Nick Stegmann
As millions fill out their March Madness brackets, we are drawn to college basketball for all the right reasons: Cinderella stories, buzzer beaters and teams that come together against the odds. We believe in the purity of competition – that excellence, teamwork and coaching can triumph over raw resources.
But behind the scenes, a different game is being played. Coaches are poaching players from rivals mid-season. Boosters are engaging in bidding wars that would make Wall Street blush. Programs are treating roster construction less like team-building and more like corporate raids. The culprit? A Name, Image and Likeness (NIL) system that, despite good intentions, has become a textbook case of what happens when markets lack the ethical guardrails that make them work.
When good intentions meet market failure
Let me be clear: The idea behind NIL was absolutely right. College athletes generate billions in revenue, and they deserve fair compensation. Nobody with a basic understanding of market economics would argue otherwise. The problem is not the concept; rather, it is the execution.
What we’re witnessing are three fundamental ethical violations that would be unacceptable in any general business environment. First, there is the breach of implicit contracts. Players commit to programs, coaches build strategies around them, and teammates depend on their presence. Then they are poached away. In the corporate world, we could recognize this as a breach of duty, this being the kind that erodes trust and makes long-term planning impossible. It is also one of the reasons why some coaches are leaving the profession entirely.
Second, tampering has become rampant. When boosters contact athletes who are still committed elsewhere, it is the business equivalent of poaching employees bound by non-compete agreements. It doesn’t just break rules; this undermines fair competition.
Third, information asymmetry runs rampant. Wealthier programs leverage massive advantages that have nothing to do with coaching quality or player development. We have created a system where money alone increasingly determines outcomes.
The real cost: Everyone loses
One of the foundational concepts in business ethics is stakeholder theory. This analyzes how decisions affect everyone with a stake in the outcome. The current NIL landscape fails this test spectacularly.
Student-athletes are being reduced to itemized personnel in bidding wars rather than students being developed for long-term success. Coaches cannot build sustainable programs when rosters are in constant flux. Teammates watch trust evaporate as anyone might leave for a better offer. Fans and alumni could lose their emotional connection when there’s no continuity or loyalty.
This should sound familiar to any Columbia-area business leader. It’s what happens in companies that prioritize short-term profits over long-term sustainability. You get a race to the bottom where everyone loses, even the apparent winners who have mortgaged their future for immediate gains.
Building a sustainable marketplace
Criticism without solutions is just complaining, and there are proven models for creating functional markets that balance freedom with fairness.
We need standardized contracts with defined transfer windows, just like professional sports leagues use. This provides predictability while still allowing athlete mobility. Transparency requirements should mandate disclosure of significant NIL deals, because markets work best when participants have good information. Next, enforcement mechanisms need real teeth. Tampering should result in meaningful consequences like scholarship reductions or postseason bans. Athletes could use some form of representation through collective bargaining, and NIL collectives should be regulated efficiently.
The underlying principle is simple: Regulation isn’t the enemy of free markets; it is what makes them work. From manufacturers adhering to safety standards to financial institutions following lending regulations, successful businesses recognize that ethical frameworks enable growth. Proper structure and ethical standards do not constrain markets, but rather make them sustainable.
The lesson for all of us
The NIL space serves as a powerful case study for business ethics principles because it perfectly illustrates how quickly well-intentioned deregulation can become destructive without ethical foundations.
In my sports management courses at Columbia College in the Robert W. Plaster School of Business, students engage in discussions about this very issue. Some defend the current system as pure capitalism at work, while others advocate for comprehensive reform. Those debates mirror the conversations happening in boardrooms across the state about balancing profit with purpose, freedom with responsibility, innovation with sustainability.
As we watch March Madness unfold, let’s remember what makes both sports and business compelling: fair competition, trust and the belief that excellence will be rewarded. Right now, college athletics stands at a crossroads. The same principles that make businesses sustainable, such as transparency, accountability and ethical conduct, need to be applied to NIL.
The madness we are experiencing off the court will not fix itself. It requires all stakeholders to come together and build a system that is fair, transparent and built to last.
Nicholas Stegmann is an instructor in the Columbia College Robert W. Plaster School of Business. He holds a master’s degree in Sport and Fitness Management from Missouri Western State University and has been involved in the sports and entertainment industry since 2013. He is a member of the North American Society for Sport Management.
