One of the most hotly debated topics all across America is whether college athletes should or should not be paid. I agree in theory that college athletes should not get paid. However, I cannot deny the economic impact that college athletes have on their universities and the NCAA, the National Collegiate Athletic Association, as a whole. When you couple that with the fact that there are some college athletes who can barely pay for basic necessities on a monthly basis then I really have an issue.
At the moment, Ed O'Bannon, a former college basketball standout, is filing a class action antitrust lawsuit against the NCAA. The lawsuit, which represents former and current college athletes, demands that the NCAA find a way to cut players in on the billions of dollars earned from television contracts, memorabilia sales, video games, and other revenues.
Now there are some people who have a huge problem with O'Bannon's lawsuit. Ironically, these same people will complain when high school athletes decide to skip college and go directly to the pro ranks. These people will contend that these guys need to get their education. They should take advantage of their opportunity to get a college education. Meanwhile you have guys like Steve Jobs, Mark Zuckerberg, and Bill Gate, all college drop-outs, who were great successes. The only difference between a top notch high school athlete and these guys is that the athlete is making their fortune from their athletic ability. So please spare me the "go to college" rhetoric.
Is The Education Really FREE?
Before we crush this notion that their education is free, I want to lay out the difference between free and not free.
Situation A - I give you a car and I don't ask for anything in return.
Situation B - I give you a car but you have to clean my house for 5 years.
Which situation is clearly demonstrates a FREE transaction?
Situation A right.
In situation A you are given a car with no strings attached. However, in situation B you are given a car, but you have to perform services-in-kind. Situation B is like a trade or barter situation. By no means is situation B free. It is just a situation where no cash is involved.
Essentially, college athletes are given athletic scholarships in exchange for the athletic services. It is basically a trade. If they decide to stop playing, then their scholarship is retracted. So how is this a FREE education?
Did you know that college coaches can revoke your scholarship based on your athletic performance? It surprised the hell out of me too.
According to a report done by Drexel University, a student-athlete, Durrell Chamorro, had his scholarship at Colorado State revoked despite having a 3.5 grade point average. He lost his scholarship due to his poor athletic performance.
Before 2011, the NCAA mandated that athletic scholarships could only be awarded on an annual basis, not a four year scholarship that we have all been led to believe. In the summer of 2011, the NCAA changed the rule which gave colleges the option to offer multi-year scholarships that could not be revoked based on athletic performance. But according to an article in the Pittsburgh Post-Gazette, there are not many Division I programs that are offering the multi-year option to their athletes.
So if student athletes know that their scholarships can be revoked based solely on athletic performance do you really think that their priority can be in the classroom? It is not like they really have a choice right.
According to a survey done by the Goals, Opportunities, Aspirations, and Learning of Students in College (GOALS) Study Division I college athletes spent, on average, between 39 and 43 hours a week on athletic activities during the season. If you were to break down a 40-hour work week including sleep and class, then how much would that leave you to actually study?
In addition to the amount of time that a student athlete spends training and preparing for competition, they are putting their health at risk as well.
As a person who was fortunate enough to have a full academic scholarship I would say that my education would qualify as free. I was basically paid to study and maintain a 3.0 grade point average. My academic scholarship requirements cannot begin to compare with the requirements and demands of a student athlete on scholarship.
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Are College Athletes Really Amateurs?
When I think of amateur sports I think of coaches volunteering to coach. I think of money that is raised by the team is spent on the team whether it is for travel, equipment, or food. I think of fans, the relatives and friends of team members, creating T-shirts and "knik knacks" from scratch with a glue gun, glitter, and a little paint. This is amateur sports in its truest form.
As soon as you have coaches being paid over $1million to coach, then we have crossed over to the other side. When you have jerseys, T-shirts, and all other types of merchandise being sold to fans at premium prices, then it's starting to look a little like a business. When you have video games being sold using the likeness of the player, then it's looks like a business. If a ticket to see a college football or basketball game costs as much as seeing the professionals, then it's like a professional game. When you have billion dollar television contracts being signed, then it's definitely not amateur sports that we are dealing with here.
Where is the other place that we see coaches getting paid millions of dollars? Where else do we see clothing and merchandise being sold to fans at premium prices? Where do we see videos games being sold? In what other places do we see billion dollar television contracts? We see all of this in the professional leagues like the NBA, NFL, and the MLB.
So how can the athletes be amateur when the NCAA is replicating the business model of all of the major professional sports leagues? On the surface I would agree that student athletes are not professionals, but no one can argue the fact that they are major participants in an organization, the NCAA, that is utilizing for-profit business model similar to professional sports leagues.
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The Economics of College Athletics
The NCAA generated over $830 million in revenue ($864 million if you add investment income) last year. A little over 80% of that came from television and marketing rights. Of that $503 million was distributed to Division I conferences, like the SEC or the Big 12, and then the conferences pass that down to its members.
Athletic Department Revenues
The top Division I athletic programs can easily top $100 million dollars in revenues. In the case of the University of Texas, their athletic department brought in $163 million in revenue in 2012. The football program alone brought in $104 million in revenue. As a whole the UT athletic department made a profit of $25 million, but the football program made a profit of $77 million.
It should be noted that the football and basketball programs are considered to be the revenue generating sports on most college campuses. Their revenues usually will support other sports programs within the athletic department.
Indirect Revenues And University Exposure
Aside from revenue directly generated from the athletic programs, successful football and basketball teams can add a ton of exposure to their respective schools which could lead to higher enrollment.
There have been some cases where top football and basketball school indirectly increase the sales of sports apparel companies. This is something that is out of the NCAA or the university's control, for the most part, but it happens.
For instance the "Fab Five" of the University of Michigan, which included Chris Webber and Jalen Rose, popularized wearing long basketball shorts, black Nike Air Force Max with black socks. Back in 1993, the Nike Air Force Max was endorsed by Charles Barkley, however it was the "Fab Five" that made the shoes famous.
Nike is still cashing in on the popularity of the "Fab Five" Nike Air Force Max. They have actually re-released the shoe in 2013.
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The Economic Disparities Between Athletes REAL Benefits, Cost of Attendance and the Federal Poverty Line
Firstly, there are a lot of the student athletes that play Division I football and basketball that come from lower income families. Basically, a lot of these athletes cannot call up mom or dad to wire them $300. With that said, it should be no surprise that some of these athletes are looking for extra income sources.
There was a study conducted by Drexel University Sports Management Program in collaboration with the National College Players Association that analyzed a couple of factors with regard to the scholarship awards that student athletes receive. They looked at the top 10 revenue-producing college football teams and men's basketball teams.
There were four questions that they wanted to answer which were:
What is the value of a "full" athletic scholarship compared to the cost of attendance?
How does the value of a "full" athletic scholarship compare to head coach compensation for football and men's basketball?
How does the value of a "full" athletic scholarship compare to established federal poverty guidelines?
How would the value of revenue-producing college football and men's basketball players be affected if revenue-sharing formulas used in labor negotiations for NFL and NBA were applied?
However, we will only focus on the two questions that are highlighted above.
In the study here are how each variable "full" athletic scholarship, cost of attendance, and the federal poverty line were defined.
A "full" athletic scholarship consist of tuition and fees, room and board, and required course-related books.
The cost of attendance is the amount calculated by an institution's financial aid office that includes the total cost of tuition and fees, room and board, books and supplies, transportation, and other expenses related to attending the institution.
The federal poverty line number was based on what the U.S Department of Health and Human Services designated for a single individual, which at that time was $10,890 or less.
Here are some of the findings from the study.
- The difference between the total cost of attendance as determined by the institution's financial aid office and "full" athletic scholarship, on average was $3,222. This means that the student athlete would still need $3,222 after their "full" athletic scholarship. This number is based on the top 10 revenue-producing football programs.
- On average the "full" scholarship athlete in a top 10 football program earns less than the poverty line by $1874 on campus and $1794 off campus. This figure was calulated by subracting cost of room and board by the federal poverty line number. Tuition, fees, and books were not included because they do not affect the students ability to pay basic for basic necessities such as food, shelter, and utilities.
Now I know there will be someone who says that they should just get a part-time job. Well the good ol' NCAA prohibits players from working any type of job while they are on scholarship.
In spite of the NCAA making all types of revenue and profit along with the fact that they don't allow student-athletes to work a part-time job while on scholarship, they are willing push the burden of supporting their student-athletes on the tax payers. The NCAA allows its players to accept food stamps and welfare benefits. I assure you that this is not a joke.
How The NCAA Makes Themselves Look Like Greedy Pricks
I really think that the NCAA is its own worst enemy. Some of the rules on the books are just dumb and they do not make any sense. Especially, when you look at the numbers. It doesn't take a rocket scientist to recognize that since "full" athletic scholarships do not cover the total cost of attendance, then you come up with some type of solution to cover the total cost of attendance. It is not like you do not have the cash to implement something.
Here are some of the most ridiculous NCAA rules and violations that make the NCAA look like complete pricks.
The late Jim Valvano, who coached North Carolina State, gave one of his scholarship athletes a round-trip airline ticket to attend his grandmother's funeral. He knew that the kid was dirt poor and couldn't afford a ticket to get home so he thought it was the right thing to do. Once the NCAA found out about this the university was sanctioned.
There was a case where coaches for Boise St. arranged for local summer housing for incoming students. The students paid full and fair value for all of there expenses and documented their payments. The NCAA ruled that Boise St. violated policy because they saved their prospects time, energy, and effort by them helping them find a place to live.
It is a NCAA violation for coaches to give athletes a ride home even if a practice is off campus.
You cannot give anything to college athletes. Even groceries. Former UCLA player Donnie Edwards was suspended for unknowingly breaking NCAA rules when he put about $150 worth of groceries left by an anonymous person at his doorstep.
In defense of the NCAA, they have a Special Assistance Fund in which players who qualify for a Pell grants are eligible for. The eligible players can receive up to $500 during the academic year. The catch, there is always a "catch" with the NCAA, is that the athlete can only use the money on clothes, shoes, one-trip back home, medical and/or dental expenses. Firstly, how will $500 in one year cover all of that? Secondly, why in the hell are students not alble to use this money for food or sanitary items?
Hines Ward, Baron, And Other Former College Athletes Reflect On NCAA Rules
Final Thoughts and Solutions
It is very clear that the NCAA must make changes and figure out a way to take better care of its athletes. There should not be one NCAA athlete struggling to pay for basic necessities such as food. Period. There should not be one NCAA athlete not being able to attend their loved ones funeral because they cannot afford a plane ticket to get home. There should not be any NCAA athletes stranded off-campus because their coach decided to have practice there and their coach cannot bring them back to campus. None of these things should be happening especially with all of the money that these athletes generate for their colleges, athletic conferences, and the NCAA.
Furthermore, I think that the United States government needs to definitely get involved in how the NCAA operates. They should not take it over but they should definitely look into an organization that makes so much money off of so-called amateur athletes and passes the buck to the federal and state governments to support their athletes. Everyone, especially American taxpayers, should have a huge problem with the NCAA allowing their athletes to accept food stamps, welfare, and federal grants while prohibiting the students to take on a part-time job on top of generating billions of dollars in revenue. The American taxpayers should be begging for the US senate to have a "sit down" or hearing with the top executives from the NCAA and major athletic conferences.
Additionally, there is a problem when the NCAA and colleges make money from merchandising sales like player's jerseys or video games while none the athletes do not benefit from this. While it would be somewhat tricky to pay individual college players, we can no one is going out buying college jerseys of players that are sitting on the bench. They are buying jerseys of the stars on the teams. Well shouldn't the stars get a portion of that money?
Solutions and Recommendations
Here are some of the solutions or recommendations that have been proposed by the National Association of College Athletes.
Allow universities to increase athletic scholarship amounts which will fully fund the total cost of attendance to the university. The NCAA can contribute to this as well.
Utilize the Olympic amateur model. This would allow college athletes to take advantage of commercial opportunities such as endorsement deals and getting paid to sign autographs. Olympic athletes are considered amateurs yet they are allowed to secure sponsorships, endorsement deals, and other business ventures outside their sport.
There were other solutions mentioned in the report, but I think that these two are things that can be implemented very quickly.
Let me know what you think in the comments section below.
Do you think that the United States government should be subsidizing NCAA athetes?
What rules do you think that the NCAA needs to change to make it better for their athletes?