A Scholarship Is Nice, but College Athletes Should Still Be Paid

Boyce WatkinsCorrespondent IJuly 10, 2008

I enjoyed the interesting piece written by Michael Collins describing why he feels that a scholarship is more than enough for college athletes. 

I don’t want to get into a back and forth with him or anyone else on this topic, since I am not sure how productive that would be.  I think that when it comes to this interesting issue, we should present the evidence, information and ideas, and allow people to come to their own conclusions. Even if I disagree with his opinions, you should know that I respect and appreciate them.

In his article, Collins mentions many of the same arguments used by NCAA President Myles Brand regarding why it is impossible, devastating and ultimately wrong to compensate college athletes.  He mentions the high cost of college tuition, the complications of implementing a fair compensation system, and how the NCAA is ultimately protecting the athletes and their families from the strife that they themselves are willing to endure in order to keep us watching exciting games on Saturday afternoon.

How noble of them.

When it comes to the NCAA, simplicity is the best approach.  You see, anyone attempting to withhold resources from another individual or group of people will always find a long list of complicated reasons that they can’t pay you: they are protecting you in some way, they need the money, they’ve already spent your money elsewhere, the list goes on and on.  That might be what you call the “it would be too complicated to figure out how to pay you” argument.  The truth, however, is if there is money to be made, the NCAA finds a way around all the complications.  When it is time to negotiate the complications of getting a $4 million dollar per year coach onto campus, the NCAA finds a way to get the deal done.  When they have to negotiate multi-year TV rights deals, international broadcast restrictions, and complex zoning regulations in order to prepare for the Final Four, they get it done.  But when the athletes come to the table demanding their share of the gravy train, the response suddenly becomes “we can’t figure out how to make it work, it’s just too complicated!”  This form of intellectual laziness is problematic from an organization that has gobs of PhDs in its association.  

Then there is the “we can’t afford to pay you” argument. Let’s be clear: The NCAA makes money, lots of it. Their annual revenues are in line with the NBA, NFL and NHL.  So, the notion that we should, for one second, feel sorry for them because they are losing money is tough to imagine. If the NCAA were not making money, they would not be paying hundreds of millions of dollars for the building of elaborate stadiums, the purchase of luxury homes for their coaches, or the massive compensation packages of marketing and promotional teams.  The same humility and financial conservatism they expect from the athletes (many of whom have families in dire poverty) is not mirrored by their own extravagant behavior.

Then there is the following argument: “What about Title IX and the fact that we’ve already spent YOUR SHARE of the money paying for every sport across campus? (Please share this with your mother as she is getting evicted from her house)” Issues such as cross-campus subsidization and title IX requirements are real and relevant.  Ultimately, fundamental questions must be asked:

“Why is it the job of the guys on the football and basketball team to fund all the sports across campus, when coaches, administrators and wealthy commentators are not forced to share their salaries?  Do we feel it is OK to fund this subsidy with money from the athletes and not anyone else?  Is there a Title IX for coaches so that the female basketball coach earns the same as the men’s coach? ”

Part of the reason that I am in favor of holding congressional hearings to challenge the tax-exempt, non-profit status of the NCAA is because they’ve created a system in which one group is forced to bear the brunt of administrative burdens, while the other group can switch jobs when they want, negotiate the salary that they want, and get all the perks that they want.  Coaches get rich by forcing athletes to wear a certain brand of sneaker.  Athletic departments pay six and seven figure salaries with money earned from the jerseys of their athletes.  Commentators and even the NCAA president earn millions from holding games in which they don’t even participate.  The truth of the matter is that the system is a carefully-designed web of laws and rules that constrain one group and force them to serve another group’s financial interests – not unlike a Chinese sweatshop.  When you put laws in place that penalize athletes for accepting a bag of groceries, you’ve got a corrupt system on your hands. There should be nothing illegal about accepting a candy bar, a ride to the gym or free lunch. But all of these things suddenly become criminalized in the deceptive bastion of exploitation known as the NCAA. 

  The only universities with the moral authority to say that they truly cannot afford to compensate athletes are the ones who are not paying their coaches more than $200,000 per year.  Most campuses with big time athletics programs cannot make this claim, for they always find a way to pay coaches, administrators and everyone else. If there truly is a financial crisis in many athletics departments across the nation (as Mr. Collins asserts), then the NCAA and college coaches should be the first soldiers in line to fight the battle toward financial stability.  When I see coaches giving up their million dollar salaries for the sake of preserving the financial solvency of the NCAA, I will be convinced that the financial crisis is real. Since he and others assert that free tuition is just as valuable as real compensation, we can even allow the coaches to trade in their salaries for a big fat scholarship.

In other words, the worst excuse for me to use for not compensating you fairly is to say that I’ve already spent your money.  Even worse is for me to say that I need your money to avert a financial crisis that you did not cause and I am not willing to help avert myself.  Again, simplicity is key: OJ Mayo plays for USC.  USC earns an extra $30 million due to the presence of OJ Mayo on their basketball team.  OJ Mayo’s mother has the right to negotiate at least $10 million dollars of her son’s contribution to the campus.  OJ Mayo’s mother is no more responsible for solving the financial problems of cross- campus USC sports than USC is responsible for solving the financial problems of OJ Mayo’s cousins. Additionally, you can give OJ Mayo the grand, super-deluxe, Presidential scholarship, and it will be a drop in the bucket compared to what this young man is bringing to his campus.  Common sense is the weapon to ensure that you are not deceived by the NCAA’s smoke and mirror parlor tricks.

Mr. Collins’ idea that an open market system would create a long list of losers is another tactic used by the NCAA.  In their claims of altruism (which come with a multi-million dollar propaganda campaign), they claim that the losers in a fair market system would be those poor inner city kids who get their only chance to get an education because the NCAA is gracious enough to give it to them.  That would be what I call the “what we give you is better than nothing” argument.  I beg to differ.  Many college athletes in revenue generating sports are multi-million dollar commodities and college sports is a multibillion dollar industry.  The truth of the matter is that there is a ready-made market for these athletes, and they bring as much or more value to the table than the NCAA.  Of course, the NCAA deserves credit for the branding, marketing and promotion of the product, but the athletes are the product. The only problem is that the athlete is pimped to the advertising community, with the universities keeping the revenue in their pockets.   Without players to pimp, there is no revenue.

You cannot, in any conceivable way, justify leaving out the sources of labor from compensation when the billions are being earned from college sports.  A scholarship is nice.  But again, most athletes would settle for a fair payment of $200,000 each year and pay their own tuition.  Sorry Michael, private university tuition is not $200,000 per year, so I think you misinterpreted the numbers I mentioned in my first article. Additionally, paying a student in tuition when their family needs cash is like paying them in candy bars, soap or some other commodity that they may or may not want. 

Mr. Collins mentions that the Syracuse University football program has been losing money, he doesn’t mention that they’ve also been losing games….a lot of them.  Their record over the past 3 years has been among the worst in school history.  But during an average season, the money flows like rain in the Amazon. Additionally, the losing of the past 3 years has not stopped them from paying coach Greg Robinson his $1 million dollar per year salary.  A business can’t stop paying its employees just because it is losing money, just ask the New York Yankees.

The idea of “protecting athletes by not paying them” doesn’t make much sense if neither the athletes nor their families are asking for such protection. Such an argument is highly paternalistic and exploitative in nature. In fact, if the NCAA is making such a sacrifice by accepting their multi-million dollar paychecks and enduring the great challenge of paying tuition for players who add little value to the process, then I would expect them to welcome the idea of open market compensation. What is most ironic is that I have never once seen someone watch a college basketball game in order to see the coach or a commentator, so it doesn’t make sense to me that they are paid in cash, while athletes are given a scholarship that isn’t worth nearly as much as the revenue being brought into the university.

The bottom line is this: if the market were operating in a fair and orderly manner, the NCAA would not have to enforce so many rules to rig the system in its favor.  The fact that one set of operating rules exists for coaches and another exists for players implies that the system is structured and legislated to allow one group to profit handsomely from the labor of another.  If a school is losing money, then it should not have sports teams.  But the truth is that they are not losing money, which is why they keep their teams active.

Another interesting truth is that many members of the NCAA agree that players should be paid.  That’s why Walter Byers, former Executive Director of the NCAA, wrote a book stating that he believes athletes should have access to the same free market system that coaches have.  The question is not whether the NCAA knows the athletes are worth billions, they understand that.  The question is not whether they feel the athletes deserve to be paid, they understand that as well.  The question is whether the athletes have the POWER to be paid, particularly in light of a corrupt administrative process that has allowed the NCAA to operate in the form of a business cartel that restricts fair business competition.  In no other industry in America are all of the possible employers allowed to form a union and restrict worker salaries.  However, this is the case in the NCAA, where Duke, Kentucky, and Kansas all agree that their players won’t get paid.  If Walmart, Target and Kmart did the same thing to their employees, they would be hammered by the Justice Department for anti-trust violations.

The players can only get power if they either strike or go to Europe.  Brandon Jennings had the right idea, and I hope other players follow suit.  Also, a strike would be a great way to remind the NCAA that the players do bring value to the table.  Without the players, there is no game.  Without the game, millions walk out the door.  This clearly indicates that players are the primary revenue generators in this process.

Dr. Boyce Watkins is a Finance Professor at Syracuse University and a faculty affiliate at the College Sports Research Institute at the University of North Carolina Chapel Hill.  He does regular commentary in national media, including CNN, ESPN, BET, and CBS Sports.  For more information, please visit www.BoyceWatkins.net.