Skip Navigation

To Pay or Not to Pay: The Big Business of Collegiate Sports

October 11, 2018
By Chris Talgo and Emma Kaden

As the leaves start to fall and tailgaters fire up their grills, the eternal question of whether or not college athletes should be paid has returned to the forefront of barroom banter.

As the leaves start to fall and tailgaters fire up their grills, the eternal question of whether or not college athletes should be paid has returned to the forefront of barroom banter. As big-time college sports — football and basketball in particular — have boomed into a billion-dollar business, the issue of compensation (or lack thereof) for these athletes is more relevant than ever.

When it comes to the issue of paying big-time college athletes, Americans are more divided than fans at a Notre Dame vs. Michigan game. The Washington Post recently asked, "Do you think that college football and basketballplayers deserve to be paid in addition to receiving scholarships based on how much money they generate for universities, or do you think scholarships are adequate compensation?" The results: 38% of Americans believe college football and basketball players should be compensated beyond scholarships, and 52% of Americans believe college scholarships are enough compensation.

Those who believe big-time college athletes should not be paid argue that these players already receive ample financial compensation in the form of a full-ride scholarship. In 2017, 351 National Collegiate Athletic Association (NCAA) Division I schools awarded a total of $2.6 billion in athletic scholarships. That year, the average annual NCAA Division I scholarship for men's basketball players was $16,154 and $21,749 for football players.

"First, the pay-the-athletes position is predicated on the mistaken assumption that college athletes receive no compensation. … Athletes receive scholarships that cover tuition, fees, books, and room and board," stated Francis T. Cullen, distinguished research professor emeritus at the University of Cincinnati.

"Second, the campaign to pay players ignores the fact that the vast majority of college athletes, including most females, participate in sports that do not produce much, if any revenue. Who, then, is to be paid?" continued Cullen. "It is neither legal nor moral to pay some athletes and not others. And since most college athletic programs already are subsidized by general funds from university budgets, there simply is not enough money to pay every athlete playing every sport."

Athletes Seek Piece Of The Action

On the other side of the debate, proponents of paying college athletes point out that the NCAA and major universities are raking in money and players deserve at least a share of the pie. In 2017, the NCAA generated more than $1 billion in revenue, and this figure is likely to increase as TV contracts and marketing agreements expand more than a college lineman's appetite.

Across the United States, athletics departments are banking off the college sports bonanza. For example, the University of Alabama "reported $174.3 million in revenue in 2017 and $15.6 million in profit, with the football department accounting for $108.2 million in revenue and $45.9 million in profit," according to Chip Patterson, CBS sports writer.

Richard Karcher, assistant professor of sport management at Eastern Michigan University, states, "College sports is the only industry in this country whereby the court system has essentially ruled that competing sellers (universities) of a commercial product (FBS football and D-I men's basketball) are allowed to conspire to suppress the value of the human capital that generates their profits."

Karcher adds, "The NCAA's 'Principle of Amateurism' is grounded in a historic and antiquated paternalistic ideal that these adult athletes with unique talents are children ('student-athletes') who should be thankful for the 'opportunity' to participate and must be protected from the evil forces of commercialization."

An amateur is commonly defined as someone who engages in a pursuit, especially a sport, on an unpaid basis. Thus, the main question becomes, to what extent should these amateur athletes be compensated for their time and efforts?

College Sports: A Corrupt System?

If the status quo is not working — just consider the endless corruption and under-the-table payments that regularly occur on college campuses — then maybe it is time to consider alternatives.

For instance, maybe the NFL and NBA should revise their minimum age requirement policies. The NFL requires players be out of high school for at least three years. The minimum age limit to play in the NBA is 19. After all, 18-year-olds can be drafted into a war, but they can't choose whether or not they want to play "dangerous" college sports.

Perhaps it is time the NCAA reforms its ridiculously complex regulations on player compensation. For example, would a player stipend really jeopardize the integrity of the athletic program?

Or what if big-time college athletes were given options on the allotment of their scholarship money? Even more radically, what if college athletics were subject to free-market forces and players were compensated based on supply and demand?

Although the likelihood of a national consensus on the issue of whether or not college athletes should be paid is lower than the odds of your favorite team winning the national championship every year, it doesn't mean we should give up on a solution. As the old saying goes, "Winners never quit and quitters never win."

[Originally Published at Investor's Business Daily]

Article Tags
Taxes

Related News & Opinion View All News