No Athletic Scholarships? Ralph Nader Needs an Economics Lesson
As the NCAA Tournament continues to shatter ratings records, one man wants to make a controversial change that would spell the end of March Madness forever: Ralph Nader.
The one-time presidential hopeful wants to get rid of athletic scholarships, saying that college sports have become too professionalized.
Nader's proposal, which he hopes to take to Congress, calls for schools to either eliminate all athletic scholarships or, at the very least, "openly acknowledge the professionalism in big-time college sports, remove the tax-exempt status currently given to athletic departments, and make universities operate them as unrelated businesses."
Nothing Nader says is false. The NCAA is a multi-billion dollar business in large part because of the immense cash flow from sports like men's basketball and football. The so-called "non-profit" makes millions off of the heroics of guys like Kemba Walker and Jimmer Fredette while paying them the equivalent of just four years of tuition, room and board (about $200,000 for a private university and $80,000 for a public school).
The system is flawed—there's no question about that. The biggest names in college sports are not fairly compensated for what they do on the court or field and deserve their appropriate share of the economic pie. But removing the only incentive that gets them to come to college in the first place is not the solution.
Here's what will happen if Nader gets his wish and athletic scholarships are eliminated:
- The top high school athletes in the country will bypass college entirely and go play professionally in Europe or elsewhere until they are eligible to be drafted.
- The remaining athletes who now can't afford to go to the school of their choice will have to settle for state school, creating a massive competitive imbalance in favor of public institutions.
- Thousands of athletes who wouldn't even be able to get into college without an athletic scholarship now lose any chance of getting a good education.
- The high school athletic system will collapse because there will less incentive to compete in sports, potentially leading to a youth health crisis.
- And, perhaps most importantly, the entertainment industry would lose billions. Think about how many jobs are dependent on college athletics. From coaches to trainers to stadium employees, all of them would potentially be out of work. All the revenue generated from ticket sales and merchandising will disappear. Universities need this money to continue to operate school programs, especially the dozens of sports that don't make a profit. The economy needs this money, especially while it's still recovering from a recession.
I admire Nader and his goal to "finally address the myth of amateurism surrounding big-time college football and basketball in this country." It's a serious problem that deserves attention.
But Nader's proposal is about the worst possible solution. He seems to forget that only a miniscule percentage of athletes ever play professionally. What will happen to them if the NCAA gets rid of scholarships? What will happen to the American educational system? What will happen to the economy?
Nader needs to think long and hard about these questions before he goes any further with this and makes one of the biggest mistakes of the century.
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