Pay College Athletes?

Below are the posts that comprise our ongoing discussion on how (or if) college athletes should be compensated for their play.


Jul 21, 2011 @ 5:24pm

Pay College Athletes?

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Michael Wilbon thinks we should:

If the student as athlete can find a way, he/she should be able to endorse products, to have paid-speaking gigs, to sell memorabilia, as Allen Sack, the author and professor at the college of business at the University of New Haven has suggested in recent years. The best college athletes in the two revenue-producing sports have always been worth much more than tuition, room, board and books. The best football and basketball players in the Big Ten have produced to the degree that a television network has become the model for every conference in America, a network worth at least tens of millions of dollars to the member institutions. Yet, no player can benefit from that work. The players have become employees of the universities and conferences as much as students — employees with no compensation, which not only violates common decency but perhaps even the law.

Eric T. Cartman differs.


Jul 22, 2011 @ 12:14pm

A reader considers many facets of the question:

The debate over whether college athletes should be paid has raged among my friends since we met in 2004.  Since then I’ve shifted my position from “They get a scholarship, room and board – and that is plenty” to “They should be allowed to earn their own endorsement money, but should not get paid by the schools.” College sports is a huge money-making enterprise.  The schools and the conferences these students play for are making big bucks from TV deals, radio deals and other endorsements.  (Keep in mind, almost all of these colleges and universities are considered “non-profits” despite this massive amount of income.)

Now, I don’t believe these schools should pay their athletes; it creates too many logistical problems to list.  But why shouldn’t these athletes be allowed to profit off their own skills and celebrity?  If someone wants to pay them to make an appearance somewhere, sign autographs or even appear in a commercial, what is wrong with that?

Some will say that the free college education is reward enough.  Others will say that college sports is supposed to be amateur athletics, and still others will point out that all the money the schools receive from the “big sports” go to fund the less popular sports.

But the people saying these things are ignoring the reality of the situation.  The kind of athletes who would likely to get paid illegally today does not value their education the way you or I would.  These people are invested in their hands, their legs, their bodies; the skills they have to offer the world are physical, not mental (in most cases).  An elite athlete’s life after sports will be relatively the same whether they have a college degree or not.  Besides, most of these students who do play professional sports never finish their degree.

Whether we like it or not – and I don’t like it – college sports are no longer amateur sports.  There is too much money involved and we can lament that fact all we want.  But that is no reason to deny these students the opportunity to earn money based on their own celebrity while we sit back and let the University rake in endorsement money from Nike and lucrative television contracts from NBC.  There is a reason most deans and athletic directors at Division 1 Schools have seven figure salaries.


Jul 27, 2011 @ 8:31pm

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Watch the full episode. See more FRONTLINE.

A reader writes:

Not to put too fine a point on it, but your reader is dead wrong about college athletics being a moneymaker. Study upon study has been done on this, and story after story has been written about the phenomenon of universities subsidizing their entertainment (i.e. athletic young people running around after a ball) with funds from their core educational and pedagogical mission. Only the very best, biggest programs, all twenty-two of them, turn a profit. But hundreds of universities across the country are pouring money from their educational programs into their athletic programs.

Another writes:

Jay Paterno, assistant coach and son of head-coach-legend Joe Paterno, has an awesome editorial regarding this topic. As he points out, college athletes receiving full scholarships earn approximately $56.25 – $83.25 per hour in tuition, depending on in-state/out-of-state status. Most of the people I know would kill for that hourly rate.

Another:

Your reader said: “Besides, most of these students who do play professional sports never finish their degree.” In the NFL, at least, this is simply not true.

Right now, the graduation rate is about 50 per cent and a lot of the drop-outs would be the elite players who are maximizing their current appeal. (Cam Newton, for example, will get at least $35 million from the Carolina Panthers, possibly up to $50 million; I don’t think he needed Economics 101 to help him with that decision.) Amongst college athletes in general, the graduation rate is around 65 per cent, with some schools hitting over 90 per cent.

The reader also points to a piece on pro athletes enrolling in college courses as a hedge against early retirement. Another writes:

This is a subject I’ve thought about a great deal. The idea that I haven’t seen elsewhere involves the selling of merchandise with an athlete’s name: Set a portion of the profits aside in a trust to be turned over to the athlete when the athlete completes his/her degree. Keep it for a certain length of time, like 5 or 10 years after the athlete starts at the school. The money is returned to the school’s funds at the end of that time, or if the athlete transfers to another and completes his/her degree elsewhere. This gives the athlete a little extra motivation to finish schooling and enables the school to continue claiming that they want to educate their athletes.

Another:

We don’t have any of the issues we see with college football and basketball in college baseball. This is due to the existence of minor league baseball. If a high school baseball player is talented enough and wants to make baseball their vocation, he enters the draft and, if chosen, enters the minor leagues, where he will be paid for his talents. Meanwhile, those with lesser talent go off to college to either hone their skills and try and get into the minor leagues at another time or choose another vocation, study and work hard to attain a degree in that vocation, and supplement their college experience by playing college ball.

Yet another:

If the goal of these athletes is to go pro anyway, why not let them go pro after high school?  Expand the recruitment of high school graduates.  Already, we’ve seen quite a few players in the NBA (Kevin Garnett springs to mind) become successful after being drafted from the high school level.  The league has implemented mandatory transitional programs so that players don’t go off the deep end when it comes to fame and fortune.  Don’t see why that shouldn’t be their focus (and the focus of the NFL), moral imperatives be damned.

Of course, with such an expansion, the NFL and NBA should have a form of farm system that you see with the NHL and MLB, or a “youth” wing to their teams that you see in European soccer, to develop this talent.  Clearly, the only reason some of these athletes go through college at length is to improve their skills for the talent scouts, earning a better spot in the draft.  Why not let them be drafted from a fair baseline, and let them develop over a period of a couple years before reaching the major leagues?  It might even teach them to be more, you know, professional.

A reader flags the above video:

As usual, PBS got there first. It’s a short segment on the topic with great insight from Michael Lewis, who has written a lot about this topic. Covered in the program is Jim Calhoun, the coach of the University of Connecticut Huskies basketball team and the highest paid civil servant in the state (here is a famous YouTube video of Calhoun getting heated in a press conference when asked about his salary). The NCAA CEO is paid a sick amount as well.


Jul 28, 2011 @ 3:44pm

Another reader joins the discussion:

The biggest obstacle to paying college athletes is U.S. tax law and a century-old designation.  As your earlier reader noted, American universities are non-profits. This does not mean they pay no taxes, just that they avoid taxes on any income related to their charitable mission. So, for instance, they pay Unrelated Business Income Tax on the sale of t-shirts in their student stores.  College athletics is a multi-billion dollar industry, and universities avoid taxation on that income by a long-held designation of athletics as part of the educational experience given to their students.

This was first made back at the first inception of the NCAA in the early 20th century, and will be difficult to overturn based on that historical inertia. As a result, and to conform with non-profit tax law, student-athletes cannot receive any benefits that non-athletes don’t also receive. To receive even a single dollar in excess would impute that it was in exchange for a service above and not part of the educational experience, i.e. the student-athlete was paid for being an athlete.  This jeopardizes not only the tax status of the member institution for whom the athlete pays, but the non-profit status of all universities (which is why the NCAA appears to come down so hard on even relatively minor violations of their rules regarding “extra benefits”).

The easiest solution is to declare college athletics to no longer be part of the educational experience. Under that scenario, colleges would be free to pay athletes – just as they would pay students who provide other services to the school such as tutors and cashiers. Plus, they would not have to worry about Title IX compliance in regards to athletics, which every school with a football program is technically in violation of.

The downside would be those same schools having to pay much more in taxes, some in amounts measured in millions, and paying athletes would increase the costs associated with sports programs.  And that’s also the reason why the NCAA member schools will never willingly go for it.

The IRS could fix this anytime it wants, but there are too many political pressures against them doing so as well.  So instead we are left with a sports industry with clearly identifiable professional athletes and a conflagration of laws and political and historical pressures that deny those athletes professional status.  It is a situation that passed bizarre and entered absurdity several decades ago.


Jul 29, 2011 @ 8:55am

A reader makes a keen point:

Something that’s missing from those studies regarding which colleges make money on sports is the fact that universities make more money from sports as a way to stay connected with major donors.  Every university development office uses sporting events as a way to maintain ties with donors – many who are giving hundreds of thousands or even millions of dollars.  Coaching decisions are often made because some major donor doesn’t like the coach.  It may be difficult to quantify such things, but university administrators certainly understand that their jobs are dependent on keeping these donors happy, which usually means championships for their major sports teams.

Another:

Your reader’s assertion that only twenty-two athletic programs made a profit last year in collegiate athletics obscures an uncomfortable truth.

The problem rests not with a lack of football revenue, but rather the bloated budgets of non-revenue earning sports.  With no system in place to return the money earned by student athletes, it is simply spent on other sports unable to turn a profit. To borrow a term from Jason Whitlock, schools have created a “welfare state” that supports wrestling, baseball, lacrosse, fencing, soccer, and women’s basketball among many others.

Title IX mandates an equal number of scholarships be made available to women’s programs, but that alone cannot explain the system that is currently in place. The current system says that a women’s basketball coach earning  as much as $1 million is perfectly acceptable, but football players selling their own property should be punished.  This is despite the fact that only two women’s basketball programs in the country were able to turn a profit, whereas the Ohio State football program in question generated $35 million last year.  There are 78 Division I-A football programs that turned a profit last year.  This is not a revenue problem; it is a spending problem.

Another returns to a point raised in the original post:

I believe your commentators thus far have missed the mark, slightly. It isn’t about paying student-athletes with money from athletic department coffers. Rather, look into what ESPN Analyst/Duke Basketball Player/Attorney Jay Bilas has been suggesting: the Olympic model.

Michael Phelps is not paid to swim. He is an amateur in that regard. However, he is permitted, per Olympic rules, to give paid speaking engagements, endorse products, etc. He is allowed to capitalize on the market for his own fame and success.

Terrelle Pryor, former QB for Ohio State, is not. Any benefit he receives as a result of being a student-athlete is a violation of NCAA rules. That’s why it was a big deal when he sold his memorabilia – his own personal property, mind you – in exchange for tattoos and other items.

There is a vast market for unscrupulous deals like this, and the NCAA’s unrealistic definition of student-athlete creates a perverse system where student-athletes may not profit on the open market for their talents and accomplishments. On the other hand, merely removing “-athletes” from the title permits a student to profit on the open market for his talents and accomplishments at will.

Mark Zuckerberg could have stayed at Harvard and profited off his Facebook work while continuing to major in computer science. Terrelle Prior can’t sell his own personal property without the NCAA making it a federal case. The NCAA’s rules are outdated and illogical.


Sep 15, 2011 @ 2:10pm

“The Most Important Article Ever Written About College Sports”

That’s what Frank Deford calls Taylor Branch’s manifesto in defense of paying college athletes:

‘Scholarship athletes are already paid,’ declared the Knight Commission members, ‘in the most meaningful way possible: with a free education.’ This evasion by prominent educators severed my last reluctant, emotional tie with imposed amateurism. I found it worse than self-serving. It echoes masters who once claimed that heavenly salvation would outweigh earthly injustice to slaves. In the era when our college sports first arose, colonial powers were turning the whole world upside down to define their own interests as all-inclusive and benevolent. Just so, the NCAA calls it heinous exploitation to pay college athletes a fair portion of what they earn.


Mar 26, 2013 @ 8:00am

Money Madness

The New Yorker drafted a prediction “in which the biggest spender always wins” the NCAA basketball tournament:

Go here to interact with the brackets yourself. Meanwhile, a Freakonomics/Marketplace podcast crunched the ad numbers for the annual tourney:

[Kantar Media researcher Jon Swallen] tells us that two years ago, CBS and Turner may have lost money on March Madness, as they pay roughly $770 million a year for broadcast rights but took in only $728 million in TV ad revenue. But last year, Swallen says, CBS and Turner — which broadcast ever single game in the tourney — took in more than $1 billion. This makes March Madness “the most lucrative sports TV franchise in the country in terms of advertising revenue,” Swallen told us, “bigger than the Super Bowl, bigger than the entire NFL playoffs, and larger than the combined revenue that’s brought in from the Major League Baseball playoffs, plus the NBA, plus the National Hockey League.”

With that sort of windfall in mind, Dave Barri doesn’t think that giving scholarships to players is adequate compensation:

To illustrate, consider the Indiana Hoosiers this season. An examination of the player statistics reveals that Victor Oladipo produced 7.37 wins for Indiana (the Wins Produced calculation for college basketball was similar – in fact, amazingly similar — to what has been done for the NBA).   We are working on the economic value of a win in college basketball, but a conservative estimate is that a win is worth at least $100,000 for a program like Indiana.   Given the number of wins Oladipo produced and the conservative value of a win, Oladipo’s production was worth (i.e. his Marginal Revenue Product) about $737,000 (and again, this is a crude and conservative estimate).

A scholarship to Indiana is valued at less than $30,000.  So at least nine of these players were exploited (which simply means they were paid less than their Marginal Revenue Product).

He argues for a “free-market approach to college sports.” The Dish has debated the topic at length.


Apr 1, 2013 @ 5:09pm

That Broken Leg

by Doug Allen

Duke v Louisville

Louisville sophomore Kevin Ware’s extreme compound fracture yesterday was probably the most disturbing injury I’ve ever seen in person or televised, and after seeing the replays I was unable to watch the rest of the game. Ian Crouch analyzes other reactions:

Ware’s injury quickly became about a variety of other things. It was a media story: When did CBS decide to stop airing replays? Did it do the right thing? And a tech story: How does social media capture and shape cultural responses to live events? It became an infrastructure story: Did the elevated court on which the game was played, installed largely for aesthetic purposes, contribute to the way in which Ware jumped and fell? And it has become a question about ethics: Ware’s immediate pain, and the long-term physical challenges he will face, make the mounting questions about the compensation (or lack of it) and exploitation of college players all the more significant.

Barry Petchesky provides a thorough rundown of how TV networks addressed airing the injury. Despite its gruesome nature, Will Leitch doesn’t blame sites like Buzzfeed and Deadspin for posting the footage:

Whether or not you think it’s right or wrong for Deadspin and The Big Lead and Buzzfeed and Yahoo to profit off the incident, it is undeniable that people desperately wanted to see it. You can hardly call those sites rogue or somehow sadistic, unless you are willing to call the vast majority of humanity that (and you might be). But those sites aren’t peddling drugs to children; they’re running footage of a nationally televised event that tons of people were watching. Don’t blame them for the video — blame the rest of us.

That’s to say: Blame human nature. Even now, knowing how horrific the video is, having been told by so many people to stay far away… I’m still curious to watch it.

David Sirota worries about Ware’s future:

[His injury] will likely be remembered alongside Joe Theismann’s career-ender as one of the most tragically gruesome in sports history. But that’s not the only tragic and gruesome part of this episode, because unlike Theismann, who was working under a guaranteed contract, Ware was an NCAA athlete helping to generate millions of dollars for the NCAA, but not automatically guaranteed a four-year education scholarship. As in so many other similar cases, that means his injury in service to the NCAA’s multimillion-dollar machine could spell the end of his financial aid and massive healthcare bills to boot.

(Photo: Russ Smith #2, Gorgui Dieng #10, Chane Behanan #21 and assistant coach Kevin Keatts of the Louisville Cardinals react after Kevin Ware #5 suffered a compound fracture to his leg in the first half against the Duke Blue Devils during the Midwest Regional Final round of the 2013 NCAA Men’s Basketball Tournament at Lucas Oil Stadium in Indianapolis, Indiana on March 31, 2013. By Andy Lyons/Getty Images)


Apr 2, 2013 @ 3:58pm

by Doug Allen

Responding to David Sirota’s fear that Ware’s injury would cause him to lose his scholarship, a reader writes:

In the case of a career-ending injury, the NCAA allows the school to continue financial aid to the injured player “off the books” (i.e. without it counting against the limit the NCAA imposes in each sport). It is a remarkable bit of common sense on the part of an organization that doesn’t show it very often.

Additionally, Louisville has made it clear that Ware will pay no out-of-pocket expenses for his medical treatment. Meanwhile, the injury has renewed the debate over the relationship between universities and their “student-athletes.” Anna North calculates the worker’s compensation for which Ware would be eligible if he were a paid employee:

Workers’ compensation [PDF] in Kentucky is based on the employee’s average weekly wage. Ware doesn’t make a wage, per se — that’s another feature of being a student-athlete. But researchers at Drexel University estimated [PDF] the fair market value of college players, based on how much they could make professionally; they estimated a University of Louisville basketball player’s market value for 2011-2012 at $1,632,103. An employee making that much in Kentucky would run up against worker’s comp maximums, which are pegged to the state’s average weekly wage. If that employee were totally disabled for a year from an on-the-job injury, he or she would get $39,139.88.

Jon Green thinks the “student-athlete” is a myth:

[L]et’s not kid ourselves; especially on powerhouse teams, collegiate rosters are filled out by athlete-students, not the other way around. From one-and-done recruits to softball courses specifically for varsity athletes to outright grade-changes, the idea that players are really on campus for the sake of going to college, and only play sports on the side, is laughable. They are on campus to win games and make money for their respective universities, though ticket sales, ad revenue and licensing rights. It is time they were paid accordingly.

While this may be true for athletes in the higher-profile sports like basketball and football, which always garner a lot of attention, it’s not the case for all student-athletes, even at very competitive Division 1 schools. Some of my good friends from college were student-athletes, in the very best sense of the word: they managed to balance their athletic and academic responsibilities and move on to successful careers after graduation.

I think that this ongoing debate about compensation for student-athletes often ignores a key point: the experience of playing a game that you love at a high level.

While in college, I was an athlete on a club sports team that traveled all over the country to play in tournaments. I did not receive a scholarship, and nearly all of my expenses for equipment, travel, and medical care for the injuries I sustained were out-of-pocket. There was never any hope of making money as a professional athlete after school, yet I wouldn’t trade that experience for anything.

The relationship between schools and athletes could certainly be improved. Previous readers have pointed to the prohibition on endorsements as particularly problematic, and I agree. Maybe colleges should be encouraged to think more long-term about their student-athletes, setting up safety nets for students like Ware who are injured while representing their school, to ensure that such injuries don’t threaten their ability to complete their education should they choose to. But I think the image of the poor, burdened, college athlete who suffers endlessly to line the pockets of their athletic department is a bit overdone.


Apr 3, 2013 @ 3:22pm

by Doug Allen

A reader who teaches student-athletes disagrees with Jon Green on the athlete work ethic:

I teach classes at a MAJOR sports university and have students who are going into the NFL draft. Every one of my student athletes is among my most conscientious, polite, and hardworking students. In fact, if I took my student-athletes of any sport and put them up against the regular student body, I would choose to teach the athletes every day of the week. Sure, they have a support system that keeps them in school, makes them go to class, and offers tutoring, but, um, good? I have problems with the exploitation of student athletes, but I have never had any problems with their in-class conduct. In fact, quite the opposite. I think that a few bad student-athletes get the press and tarnishes all of their reputation, but do you really believe that athletes who are monitored constantly are worse people and/or students than your average frat house? In my experience, the athletes are WAY better.

Another reader lists some of the support she received as a student-athlete:

Every medical expense I ever needed during college, for any reason, was covered by the athletic department. This included birth control, routine eye appointments, contact lenses. For those who had any major injury, surgery was completely paid for. To help with rehab, there were daily visits with personal trainers who tailored programs to your specific injury.

When I became depressed my senior year, the athletic director immediately sent me to a therapist.  I’ll never forget the day she told me, “we will pay for every visit you need, and we will do everything we can to get you better.” They even paid for anti-depressants, and this continued even after my eligibility was up. Did I mention I was a non-revenue-producing women’s soccer player, it was not a sports-related injury, and the grand total of my care over four years must have cost unimaginable sums of money?

While this is by no means every athlete’s experience, I’m guessing most large (football) schools provide their students with similarly extensive care, especially to high-profile athletes in revenue sports. And for those of you getting ready to pick a college, you might want to consider not only where you want to get your degree if you’re severely injured and can’t play again, but also where you’re able to get the best resources to get you better again.

Another distinguishes between the big-money sports and others:

Both football and basketball have high-paying professional leagues that apply exclusionary age rules to their labor pool and rely heavily on college sports for player development.  So an NBA-caliber college freshman – or an NFL-caliber freshman or sophomore – isn’t being treated to a free education enriched by some athletic competition; he’s being screwed out of a chance to get paid in the draft before risking injury in an NCAA season.

Not every NCAA athlete is getting screwed.  Hell, not every football or basketball player is getting screwed.  It’s great that you enjoyed playing sports in college, and it’s great that lots of other people also have their experience enriched by playing on a team. But please, please don’t be so dense as to let that obscure the fact that there are hundreds of kids who play so well at popular sports that their labor would be worth hundreds of thousands or millions on an open market, who are playing college sports for free because there is no open market to sell it on. That’s the trick the NCAA wants to pull, and it isn’t helpful to be credulously repeating it.

It seems to me that this reader has more of a problem with the draft eligibility rules that prevent these athletes from going straight from high school to the pros than with the funding of college athletes. As to the point that “there is no open market to sell it on,” that’s simply untrue for basketball. Current Milwaukee Bucks star Brandon Jennings opted [NYT] to play professional basketball in Italy out of high school rather than attending the University of Arizona, and the NBA Development League (pdf) allows all players over 18.

Another reader questions the relevance of my own experience:

With all due respect to your Ultimate Frisbee career (just a guess, but amirite?), you’re conflating two very different things. No one is suggesting that schools do away with sports that don’t make money, or paying athletes that compete in those sports. We are talking about allowing some of the money generated by a huge enterprise to go to those who make it possible. No one wants to take your experience on a club team away from you, but neither is anyone demanding that you should have been paid for it. This is about relatively simple economics, and I’m not sure that your point has any relevance to the actual discussion.

This reader is right, I played Ultimate in college. But I was not trying to argue that I should have been paid for my experience (I definitely should not have), I was simply pointing out that the opportunity to play a sport at the college level could be considered a reward in and of itself, and that is something to take into account when discussing whether or not student-athletes are being “exploited.” I was willing to pay out-of-pocket for this chance, and this is why you see students trying to walk on to teams even if there isn’t a scholarship available for them: because playing on a team at a competitive level can be fun and rewarding.

I’m not so sure that this is a case of “relatively simple economics,” either. Most of the discussion of student-athletes assume that the benefits flow only one way: scholarship athletes in big-money sports get nothing (except for scholarships, medical care, tutoring, the opportunity to showcase their skills…) while the schools reap all of the rewards. But I think the relationship is more symbiotic than that. College sports teams get the benefits of a built-in fan base. Across all 338 teams in NCAA Division 1 basketball, attendance at each home game averaged over 5,000 fans during 2012 (with schools like Louisville as high as 21,000 per game), while the 16 teams in the NBA’s D-League averaged about 2,800 fans per game in the 2010-2011 season despite an arguably higher level of play. Fans flock to see their favorite programs play, not necessarily the star players.

As I said before, I would like to see more long-term thinking from colleges to help ensure that sports-related injuries like Ware’s don’t force the athlete to leave school for financial reasons. But paying athletes? I’m just not there yet.