Money Madness: Why and How NCAA Athletes Should Be Paid

NCAA President

By Zach Gorwitz.

Free markets and college football. Deeply embedded into the sociocultural fabric of American life, these two time-honored traditions have been deemed incompatible. Why is scandalous headline after scandalous headline born from the act of receiving compensation for working hard, an act that is laudable in every other profession? The answer lies in one dogmatic, pious, hypocritical, bloated bureaucracy of a governing body: the National Collegiate Athletic Association. However, with targeted new policies, the NCAA and member schools can end this false dichotomy between work and play.

An Environment of Inequity

The collegiate athletic system desperately demands reform. Young men and women are putting in 50-hour workweeks, on top of classes, and all they have to show for it is NCAA President Mark Emmert’s $1.7 million dollar salary. To put it bluntly, the NCAA’s revenues and operating budget thrive off the exploitation and suppression of “student-athletes” with nowhere else to turn for a playing field.

Economically defined, the NCAA is a monopsony. They are the one buyer in a market with unlimited sellers. In other words, if I want to play college basketball, I would have no choice but to seek athletic employment from the NCAA (not to mention grow 8 inches and develop a sweet jump hook). This effectively allows the NCAA to set the price they are willing to pay for the labor of college athletes- which is currently zero dollars. How can the NCAA get away with profiting from merchandise, ticket sales, advertising, and endorsements while the players don’t receive a penny in salary or stipend from the organization?

Easy—lame justifications and obfuscation of the facts. President Emmert is adamant about the classification of “student-athlete”—students who happen to play sports for school pride—remaining true. I would wholeheartedly support such a model, if a pay-for-play model weren’t already in place. The problem is top NCAA executives and head coaches are the ones getting paid, while the players are the ones doing the playing.

At a time when public university tuitions are rising uncontrollably because of a “lack of revenue”, the NCAA and top coaches are living large. “According to USA Today, salaries of new head football coaches at the bowl-eligible schools increased by 35 percent from 2011 to 2012. Average annual pay has ballooned to $1.64 million, an astonishing increase of more than 70 percent since 2006,” writes Dave Zirin of The Nation.

Whenever asked about the notion of paying players, Emmert equivocates. “Why would we want to force someone to go to school when they really don’t want to be there? But if you’re going to come to us, you’re going to be a student,” he posited. Well, Mr. Emmert that’s an awesome question. Maybe you should ask the NFL owners who would never draft a kid straight of high school, or consider consulting your rulebook that requires basketball players to go to college for a year before entering the NBA draft. So, yeah, they don’t really want to be there, but that goes back to our monopsony problem.

The other defense the NCAA and co. commonly turns to is the idea that athletes are receiving a free education. How is this not just compensation, they ask! The Drexel University Department of Sports Management Study did an analysis of the revenues, and the results are shocking. 

Most impactful was the discovery that college athletes on full scholarship do not receive a “free ride.” For the 2011-2012 academic year, the average annual scholarship shortfall (out of pocket expenses) for each Football Bowl Series (FBS) “full scholarship” athlete was $3,285. Further, the Willamette Sports Law Review  writes, “Many African-American student-athletes come from very financially disadvantaged backgrounds and are often much poorer than the general African-American college population. Many student-athletes have the mindset that sports is a means of escaping poverty.”   But for athletes who come from lower socioeconomic backgrounds, a free ride does not stock a refrigerator or buy toothpaste. 

So when the NCAA bans taking ANY type of gifts, athletes who have no time for a part time job because of their full-time “student-athlete” status often turn to illegal measures. NFL star Arian Foster’s recent admission that he took money on the side during his time at the University of Tennessee is a prime example.

And just how much are these players worth? The Drexel study finds “If allowed to access the fair market like the NFL and NBA players, the average FBS football and basketball player would be worth approximately $137,357 and $289,031 during the 2011-12 school year, respectively (not counting individual commercial endorsement deals). From 2011-2015, FBS football and men’s basketball players will be forced to forfeit over $6.2 billion.”

Past the lack of just compensation, the NCAA has a host of other silly rules that exacerbate the oppression of “student-athletes”. Players aren’t allowed to profit off their own popularity. Most notably, the NCAA handed Johnny Manziel a half-game suspension for allegedly signing autographs for money (they never proved it). I wonder how much money the NCAA and Texas A&M have made selling t-shirts with “Johnny Football” (his nickname) printed across. Duke alum, Jay Bilas, destroys the NCAA for such hypocrisy via Twitter.  And I bet you can guess how much ex-Michigan QB Denard Robinson was paid for being featured on the cover of EA Sports’ NCAA Football 14.  This rule robs the players of their right to their own names.

None of this is to say I don’t recognize the NCAA’s arguments. Yes, the revenue-generating sports like football and basketball pay for scholarships in sports like women’s lacrosse and men’s cross-country. Yes, there is something admirable about giving your body, your time, and your heart to a school sport for pride rather than for pay. But, we do not have to sacrifice these intangibles in a pay-for-play model.

Moving the Chains

Change in the NCAA is on the horizon. It is time to pay players- and here’s how. The most effective system will be a limited free market approach. The days of Nick Saban, Les Miles, Urban Meyer, Jim Boeheim, Tom Izzo, and Coach K using their persuasive powers alone to sign recruits are gone. Instead, coaches will have the added bargaining tool of money-backed contracts. Each sport should have a salary cap. For example, depending on the amount of revenue generated, University of X would have $1 million to spend on their football players. The maximum contract would be $60,000 with a minimum contract of $10,000 per season. In addition to their scholarship, athletes from disadvantaged backgrounds can now live like other students—buying plane tickets back home, catching a concert, etc.

Would this crush the heart of college sports? Of course not. The beauty of college sports is that athletes represent the institution they attend. If I get paid for a work-study position, does that make me any less of a student at Duke? No. I am working to better my university, I just happen to get compensated for it. The NCAA should absolutely remain in place as a quasi-farm system for the big leagues—maintaining the integrity of college sports and the “student-athlete”. Would the proposal create a gap between huge, rich schools and smaller D1 schools? That gap already exists. Florida A&M University is never going to be able to compete with the University of Alabama due to sheer size difference, so why not let the free market pay the players for their work? In fact, the free market (under my proposal) may even lead to a more even distribution of talent as Coach Nick Saban’s proposed salary cap would prevent him from signing exclusively 5-star recruits. Now, those three, four, and five star recruits looking for top salaries and more playing time would go to mid-level schools, increasing parity in college athletes.

The free market advantages do not end there. The movement for player rights is growing, and creating a market based relationship between the NCAA and the players would allow the players to unionize and form an organization that would act as a legitimate counterweight to the NCAA.  Just last week, players from major schools like Georgia Tech and Northwestern protested a lack of athlete rights by wearing #APU (All Players Union) on their uniforms. They will be able to demand injury protection, health-care, and four year guaranteed scholarships. As it stands, schools have the ability to drop a player from scholarship, effectively, kicking him or her out of school, if injury strikes or performance is less than satisfactory.  A single player can’t fight against this abuse alone.  It is past time college athletes had the basic right of representation and due process. 

The NCAA would continue to exist as an overarching body—they set the rules, sponsor intercollegiate competitions, determine eligibility, collect advertising money and distribute portions of the profits to the schools, and most importantly provide healthcare for all athletes (with lifetime healthcare provided to players in high-contact sports). The schools would be responsible for all their current activities, with the addition of player salary.  To compete in the NCAA, a school would pay a membership fee.

The player’s union is trickier. No player would be forced to join the union. An athlete can compete in NCAA competition without union membership; however, he/she would not be granted the benefits of a minimum salary, healthcare, etc. All the benefits would be hashed out in a collective bargaining agreement between the NCAA and player’s union. Yes, this opens up the possibility of a college sports “lockout”. Will that happen? Not likely. The NCAA is much more intertwined than the NFL, NBA, or NHL.  Given that they oversee dozens of sports and substantially more athletes, preference divergence is much higher in the collegiate world than in the pros.  As a result, it would take a serious amount of collective action to actually push a lockout through. Further, billions of dollars depend on March Madness, Bowl Games, and the draft process.  Players who stand to make millions in after college will think twice before harming their draft prospects. 

Yet, women’s volleyball doesn’t generate billions. What happens to the sports previously funded by football and basketball revenues not paid to the players? The sad reality is that they will take a hit. The number of scholarships will probably be reduced. But, the free market will set up an interesting choice for universities and alumni—how valuable is the sport? If determined that it adds value to the university, then it will be funded with school money or an athletics endowment fund established by alumni. If not, then the number of scholarship will be reduced and players will have to pay their own way. In my opinion, this is necessary collateral damage of a new college sports model. Truthfully, revenue-generating sports are bringing the most value to schools. No one black tents for cross-country.

Furthermore, players will finally not be literally banned from college sports if they talk to an agent. The process of choosing a college is confusing, often misleading, and monumental. Under a collective bargaining agreement, athletes will have this same privilege. Making the operation of hiring agents and paying players aboveboard and legitimate will reduce corruption in college sports and actually enhance the NCAA’s business model and educational experience.  

A crowning achievement of the free market is its ability to naturally correct for mistakes. The transition from the current NCAA model to fair, limited free market model won’t be easy, but with trust in the invisible hand, along with the guiding hand of a reformed NCAA, we will enjoy a new era of college sports. The NCAA has perpetuated a severe blunder over the years by separating free markets and collegiate athletics; it’s time to fuse these two uniquely American concepts. 

There are 9 comments

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  1. Conor Smith

    Well written, Gorwitz. You do make a pretty convincing case, and I agree with all your contentions about how the current system is unethical, flawed, and just generally fucked. However, I still feel that the implications of the system you propose are pretty serious. While some athletes are confronted with economic situations that are undeniably grave,paying those athletes comes at a cost that is morally hard for me to rectify, on a personal level. What of the talented womens soccer player who never gets a college education because all the schools she was good enough to play for dropped the program in order to field a football team? What of the kids who couldn’t afford to attend college because of the tuition hikes that came from having to pay that star recruit?
    Regardless, I appreciate the thoroughness and clear lines of thinking of the piece. Thought-provoking to say the least.

    • Zach Gorwitz

      Those are very real concerns, Connor. And they are problems that a free-market hopefully will address. I do not think tuition hikes will come as a result of these proposals as programs will be bound by a salary cap and the revenues generated by the team alone should exceed said salary cap. My hope for other sports programs that the University deems valuable is that they will be privately funded or funded by the University itself. There is no denying that this is not an ideal situation for these other sports, but I also have a difficult time (morally) justifying giving scholarships to athletes who don’t quite have the value that revenue generating athletes do, and using their deserved salaries to do so.

  2. wesmorgan1

    You wrote, “Yes, the revenue-generating sports like football and basketball pay for scholarships in sports like women’s lacrosse and men’s cross-country.”

    At which schools does this occur? According to the most recent numbers available, only about 10% of the 340+ NCAA Division I athletic departments were self-sufficient. That percentage fluctuates from year to year, but only rarely does it escape the single digits.

    For the other 90% (or more) of Division I programs, their universities are subsidizing athletics, some to an astounding degree; Rutgers has pumped more than $100 million into its athletic department over the last 3 years – and those were just operating monies (i.e. no arena/stadium construction).

    So, no, the vast majority of Division I schools do NOT have “revenue-generating sports” paying the way for other athletic programs. In fact, the vast majority require subsidies from their universities.

  3. Kenai McFadden

    Well written. I forgot that I was reading an article written by a Duke student and not a pro sports writer until I read, “No one black tents…”

    The issue makes me uncomfortable… I, as a student, get to take my time to study, be in lots of clubs, and have a job. Athletes don’t necessarily get to do those things, and they furthermore have to physically work harder than I do almost daily, on top of trying not to get injured, etc. Paying them for their service and sacrifice sounds really good, but something about the transition to paying athletes gives me that “you might regret it” feeling. That regret “feeling” is probably what the NCAA wants me to feel anyway.

    However, I definitely think that we should try something. It seems to be agreed upon as a problem by the majority.

  4. Michael Fischer

    Paying college football and men’s basketball players has the feeling of inevitability about it at this point. The rub is, how do you manage a ‘limited’ free market system. It strikes me that you would have just as much trouble policing a system with a salary cap as the one we have now.

    What I think would work better is a system where the colleges are allowed to pay any athletes they want a stipend to cover the full cost of attendance. You could even make that a need based benefit similar to financial aid grants schools are familiar with.

    You could then leave the players free to make as much as they want in the free market, through agents, autograph hounds and the rest. This would allow the players more access to their true value and save the vast majority of colleges from another major expense while having to sacrifice other athletic programs.

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  6. sjkoskela

    Came across your article. Well written. However, it’s entirely based upon a false premise: Participation in collegiate athletics occurs in the framework of an economic market system in which the participants’ services are both unique and their value determinable by the workings of free market principles. Such an assumption is patently false. Participation in college athletics is entirely voluntary. No different than playing in the band or choosing to be a neuroscience major. You need to re-examine the following statement: “Young men and women are putting in 50-hour workweeks, on top of classes, and all they have to show for it is NCAA President Mark Emmert’s $1.7 million dollar salary.” I’m the parent of two college undergraduate students who are not the beneficiaries of athletic scholarships. Total cost of tuition and room and board per year for the pair, approximately $82,000. I’m supposed to have sympathy for college athletes because they put in time outside of class in exchange for a free education that they may otherwise have not been able to receive? Shouldn’t prospective athletes make their decision to play based on the fairness of the value of the educational benefits that they’re being granted, if love for the game by itself isn’t enough? Give us all a break and please read the following:

    Thoughts on the Absurdity of the Argument that College Athletes Be Paid.

    I grew up in the San Francisco Bay Area in the 50s and 60s. My obsession with college athletics began as a young boy with the amazing run of the USF (that’s University of San Francisco, not South Florida) Dons who won back to back NCAA basketball titles in 1955 and 1956, followed shortly thereafter by consecutive Final Four appearances of the Cal Bears in 1959 (another national championship team) and 1960. During my high school years, I would volunteer to “usher” at Stanford football games that then assured me of free access to a good seat in the stadium after a brief, lax effort to help people find their seats before kickoff.

    I later would on go to school at UCLA where I was fortunate enough to witness firsthand the crossover from the Lew Alcindor to the Bill Walton era, continuing the unbelievable John Wooden led basketball dynasty that I first admired as a teenager.

    So, although my own athletic prowess fell well short of allowing participation in intercollegiate sports, my passion for college level athletics is deeply rooted in exposure to unforgettable teams, memorable players and thrilling moments. In other words, I care deeply about college sports and the connection between the institutions and the teams that represent them. Compared to their professional level counterparts, athletics on the college and university level breed loyalties that go far beyond winning or star power. While the professionals provide the muscle and brawn of the athletic body, the collegians have historically supplied the heart and soul.

    Which brings me to consider the absurd notion that college athletes are somehow being economically exploited and need to be paid some kind of fair wage, or more. Even more ridiculous, some have suggested that the real answer to this grossly unfair financial imbalance is that student-athletes need to be unionized, an amateur (in all senses of the word) version of the NFLPA or NBPA. Such arguments are prompted by the extraordinary riches now generated by the big money sports – Division 1 basketball and football – compounded by the largesse now flowing from basketball’s March Madness and the soon to be revenue bonanza generated from college football’s imminent final four playoff system.

    While we can all agree that it is worthy of further thought and discussion as to how the enormous dollars emanating from the two major sports machines can best be divided and who and what should benefit, can we at least reconsider that it is the athletes themselves who deserve a cut? After all, aren’t they the ones that are practicing, playing, sacrificing their health and well being, putting their bodies in jeopardy in view of their longer term professional sports potential, creating brand images for themselves that ultimately drive fan and alumni support? Well, yes and no. For perspective, let’s consider the NCAA’s long running advertising campaign that tries to put in context the concept of the student-athlete. You know, the spots that end with the line: “There are more than 400,000 NCAA student-athletes, and most of us will be going pro in something other than sports.” Surely, this is the NCAA’s messaging effort to try and maintain the illusion of the student – athlete (in that order of priority). Isn’t it all a sham, because of course, everyone knows that college jocks are simply in it for the personal gain that the professional ranks provide? Those that are cynical about the NCAA ads and ultimately, the organization’s mission, maybe should want to consider the facts. Surely, the true student-athletes are more the swimmers, cross country runners, fencers, volleyball and softball players – you know all those minor sports that don’t generate any money and where the participants will never be playing on Sundays, or in an NBA arena. Of course, that is what substantiates the claim that most athletes will never participate professionally. But what about the high profile worlds of college football and basketball? Shouldn’t we all be paying attention to all of those laying it on the line for their respective schools whose valuable careers lie ahead in the NFL or NBA? What about all of them? Consider these facts for the 2012 academic year:

    According to the NCAA research division, of more than 14,000 participants in Division 1 college football, only 1.6% are expected to play at the professional level. In 2012, only 253 college players were drafted by the NFL. Of more than 5,000 players in Division 1 college basketball, only 1.3% are expected to play in the NBA (a small fraction more potentially to play internationally). Last year, only 51 Division 1 college players were chosen in the NBA draft. Of all college sports, baseball (at 9.7%) led the pack of athletes eventually turning pro, and a large portion of those athletes completed their college eligibility before signing professional contracts.

    So, when we consider a complete overhaul of the financial workings of college athletics, what are we hoping to accomplish? To establish “fairness” for the microscopic minority of high profile, potentially professional football and basketball athletes? To better compensate all athletes for their dedication and sacrifice to represent their schools in athletic competition? What exactly is the argument? It seems to be much about satisfying the wagging short tails and ignoring the big dog.

    The miniscule group of athletes who have the level of skill to play at the next level in a major sport such as football or basketball have a unique opportunity, an opportunity that most career aspiring students in other disciplines, or other athletes for that matter, will never have. Major college football and basketball is now played on a stage that has unfounded global exposure. Those that have been blessed with exceptional ability can showcase their wares for as many as four years while never having to pay a dime for room or board, or tuition costs to obtain a college degree, if they choose to pursue it.

    Some might logically argue that THAT is an unfair circumstance vis-à-vis the non-athletic, but otherwise talented undergraduate. Upon arriving at school, most students do not have a ready-made platform to demonstrate their abilities to prospective employers as future professional athletes do.

    Others may suggest that without these high profile, star power athletes, college sports will somehow become less attractive and the financial goose will be cooked instead of regularly laying golden eggs. Really? When UCLA plays USC, will I as a Bruin alum suddenly have no interest because Marquis Lee is not in uniform for the Trojans, or top quarterback prospect, Brett Hundley, is not taking snaps for the Bruins, or some other future NFL star is not taking the field? As I recall, although they may not have bought as many jerseys in the campus bookstore, was the notorious 12th man at Texas A&M not fully engaged before Johnny Manziel ever came on the scene? If only teams with senior starters and no NBA level talent make it to the Final Four, will no one watch? Really? The point is – college athletics has always been a changing landscape. Players come and players go. The institutions live on. The competition would be just as fierce and the fan loyalty just as strong if another future NFL or NBA player never put on a college uniform. So can we stop with the incessant moaning and groaning about how unfair the NCAA is to the college athlete and how much money does not end up in the player’s pockets?

    The economic reality is clear and somehow gets ignored. There are 85 scholarships in place each season in a Division 1 college football program. Applying the overall costs of attendance to each of these scholarships yields some astounding numbers. Some examples: at Notre Dame, football scholarships have an annual cost of $4,666,925 (85 x current COA of $54,905) to the university, at USC (once all of their scholarships become available again) – $4,836,755, at Cal-Berkeley $3,270,630 (assumes 50/50 in state and out of state tuition), at Ohio State- $2,315,060 (assumes 50/50 in state and out of state). Basketball scholarships (assume 13 allowed) are valued between $300,000 to $700,000 annually for the four institutions specified. Are those who argue that college athletes are not fairly compensated serious in the suggestion that the value of an athletic full ride is not adequate recognition of the athlete’s contribution to his institution?

    The proposition that athletes are economically disadvantaged in today’s world of intercollegiate athletics is simply a myth. The appeal of college sports goes beyond the individual athletes. College basketball survived without the participation of Lebron James or Kobe Bryant. Few remember the wide receiver sensation that left the USC football program for the NFL before his junior year 10 years ago. Let the pros be pros. But let the true student-athletes that represent more than 90% of those on the field or on the court for their respective schools be what THEY have chosen to be. They’re being well compensated in ways that go far beyond tangible financial rewards, and they know it.

    —Steve Koskela, Grand Rapids, Michigan
    October 9, 2013

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