Bleacher Report - Articles by Boyce Watkins

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

Boyce Watkins — Thu, 10 Jul 2008 05:40:34 -0400

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.

Is a Scholarship Enough?: Boyce Watkins on NCAA Reform

Boyce Watkins — Mon, 09 Jun 2008 16:35:05 -0400

Dr. Boyce Watkins is a Professor of Finance at Syracuse University. He frequently appears on CNN, ESPN, and other news networks to discuss his innovative ideas for reforming college athletics. Bleacher Report was thrilled to have an opportunity to interview Dr. Watkins about his belief that college athletes should get paid.

1) People often say that the opportunity to receive a free education
is enough compensation for college athletes. What's wrong with that argument?

A free education is valuable, no one knows that better than a college professor. The problem is that we can’t assume that $30,000 per year is fair compensation for any job. If Tom Cruise stars in a blockbuster film, he is going to kick your butt if you try to pay him $30,000, even if you throw room and board in with it. In America, you get paid what you’re worth.

I see many athletes who are literally responsible for bringing $20M per year into their campuses, yet their mothers are starving to death or homeless. This should be a shame for us all, since I’ve never seen a D-I college coach’s mother go hungry.

2) If colleges could pay athletes, the wealthier schools would appear to have an advantage. Do you think there would need to be a salary cap or other measures put in place to ensure some parity in college sports?

I am not opposed to the idea of a salary cap, although I haven’t seen a salary cap for coaches. My goal is not to support preferential treatment for athletes, I only endorse fairness. I don’t see why coaches and athletes can’t have the same rules. They are all under the same pressure to win, they are both treated as professionals and expected to produce as professionals. This pressure doesn’t come from the fact that their campuses love sports so much, it’s because CAMPUSES WANT THE MONEY. They are pushing these guys much harder on the court and the field than they do in the classroom, because good grades don’t pay university bills; only big wins bring in big paychecks.

But in terms of a salary cap, I would not be opposed to that. The NCAA is lucky, since they are the only multi-billion sports league that can get away with paying their players 1/100 of what they are worth. Players would be ecstatic to play for $150,000 per year, which is far less than the millions many of them would earn in a fair market system. The money wouldn’t have to come from university budgets, they could start by sharing the money coaches get from shoe deals. After all, the players are the ones we pay to see and they are the ones wearing the shoes. But as a general rule, the Finance and free market capitalist in me doesn’t like the idea of any kind of government regulation restricting wages. I am sure coaches wouldn’t like a cap on their wages either.

3) Do you think that recruits should be offered contracts by schools
based on the performance they showed in high school? How would one individual's contract differ from another?

I don’t think that we know all the answers to these questions, but one thing is true: The market knows ALL ANSWERS to ALL QUESTIONS. In other words, if a player is the next Lebron James, then the schools know what he can do in terms of revenue generation. I say let them bid it out and the highest bidder wins. Seriously, who is to say that Rick Pitino is worth $3 million per year? Nobody says it, there is a negotiation and the price that he gets is what he is worth. The beauty about the free market is that when the market is fair, open, and efficient, no one gets more than what they are truly worth, since no one pays more than the value of the commodity.

What I love about the NCAA (who expends a tremendous amount of money on their propaganda machine) is that they do a good job of making it seem that paying the athletes would be excessively complicated and nearly impossible. The problem is that they find a way to get around the complications when it’s time to bring in a coach for $4M dollars per year. The market works out all complications, because you either get the deal done, or the game doesn’t happen. They have a lot of PhDs working for them, and we are smart enough to help them work out the complications of their contracts.

The reality is that anyone who exploits someone else, whether it’s the NCAA or a pimp on the street, is always going to find a good excuse for keeping their money in their pocket. I say this as a financial expert. I am sure that when Billy Packer or Dick Vitale show up for their multi-million dollar paychecks, they wouldn’t want to hear any reasons that their money isn’t available. For some reason, they expect athletes and their families to accept these excuses.

4) What should be done regarding sports that bring in very little revenue such as golf, tennis, and track? Would the contracts for these athletes be substantially less?

Yes, they would be. That’s the way things work in the real world. I am a professor, and some could argue that educating our youth is far more important than being a Hollywood actor. However, I will always make less money than (and not be attractive enough to date) Angelina Jolie. I accept that.

I find it most ironic that when individuals expect payment equity among young athletes, as well as gender equity, they almost never mention the necessity of such equity among the coaches.

Again, going back to a fair market, if an athlete brings revenue to the university, he/she should have the same rights of negotiation that coaches, administrators, corporate sponsors, and everyone else getting paid from his/her labor. If you simply release the rules and let the market work, you will get the result you are looking for.

5) How would you like to reform the horrendous academic environment in college athletics?

I agree, the environment is horrific. I’ve seen athletes admitted to college with no expectation that they are ever going to consider graduating. Money is a drug, and a drug addiction can make any of us lower our standards. Universities are no different, as many of them abandon their academic missions in exchange for the opportunity to earn a few million dollars off the next superstar from the ghetto.

We must remember that incentives roll downhill. A coach with high graduation rates and a low winning percentage would be fired, while a coach with low graduation rates and a high winning percentage is given a raise and promotion. This shows blatant disregard for the value of academic success. I see universities giving coaches blank checks for controlling every aspect of their players’ lives in order to get them ready to play, but they throw their hands up and negate their responsibility to see to it that these young men and women are getting educated. The excuses are interesting: “We can’t make them study if they don’t want to!” At the same time, the same coach who claims that he can’t make the athletes study miraculously finds a way to get 80 grown men awake at 6 am for intense weight lifting sessions. They are able to motivate the athletes to do what coaches deem to be most important.

I don’t completely blame the coaches for these contradictions, I blame the campus. Coaches understand that they are not going to be rewarded for academic achievement. Winning, however, is key to their job security. Campuses should take the lead in putting oversight in place that insures that academic progress is the most important part of any athletics program. That means that if a player has practice the night before an exam, he/she misses practice. If they have an exam during a game, they miss the game (even if it is a million dollar game on ESPN). THAT, my friend, is the life of a student athlete. Right now, college athletes live the lives of professionals.

6) If you were named President of the NCAA, what other changes might
you make other than compensating athletes?

I am hesitant to be an armchair quarterback on the NCAA, primarily because I believe that many of the administrators in the NCAA know that what they are doing is wrong. In fact, Walter Byers, the former executive director of the NCAA has reversed his position and stated that athletes should be paid. Honestly, anyone with common sense realizes that if you earn millions for someone else, you deserve more than a college scholarship. I believe that Myles Brand, in spite of the propaganda exercise performed by he and CBS Sports last year (in an attempt to refute my analysis), knows that he would never allow himself or his coaches to operate under the same constraints, penalties and exploitation placed on athletes and their families (especially if his mother were getting evicted, as many of these players come from poverty). In fact, I found it quite ironic that nearly every participant in the CBS sports special was earning at least a few hundred thousand dollars per year while simultaneously explaining to athletes and their families why they shouldn’t get any of that money.

Beyond paying the athletes, I would make a decision: either the NCAA is going to be a professional organization or an amateur one. It’s not going to be a hybrid. A truly amateur organization doesn’t have coaches earning as much as $4M dollars per year. Coaches earn no more than, say, $80,000 per year.

An amateur organization doesn’t fire losing coaches with high graduation rates and reward winning coaches with low graduation rates—any coach hired by the NCAA is expected to not only teach at the university, he/she is expected to ensure that academic achievement is first and foremost in the life of each athlete.

The rules should disappear: why can’t players transfer to other schools without being penalized? Coaches leave in the middle of the season all the time. Why is it illegal for athletes to receive compensation from outside entities? Coaches take money from whomever they please. Athletes are given the same responsibilities as adults, told to behave as adults, yet we put rules in place that treat them like children. Again, anyone who exploits another human being, whether it’s the NCAA or a corrupt warlord in a third world country, is going to place constraints on you and then guise his/her motivations by claiming that the rules are in place for your protection. That is the consistent theme of the NCAA’s justification for controlling their student athletes. But their desire to protect the athlete goes out the window when an athlete gets into trouble, loses his/her eligibility or loses his/her scholarship for not being able to perform on the field.

The NCAA needs to redefine its mission and be honest with the world. Right now, it is an elephant with bunny ears, swearing that it’s nothing but a harmless little rabbit. The truth is that the NCAA is exactly what it appears to be: a professional sports league. So, rather than allowing me to become the head of the NCAA, I would rather be the head of the House Ways and Means Committee, which initiated an investigation into the NCAA and began to question its non-profit status. A bureaucratic beast that has grown so deformed with contradictions needs to be deconstructed and rebuilt in a model of fairness. As it stands, the NCAA exists in stark contrast to the values most of us embrace as Americans. I’ve seen it up close over the past 15 years and it bothers the heck out of me.

Check out Dr. Watkins' website http://www.yourblackworld.com/. Your Black News. Your Black Life. Your Black World.