Corporate Social Responsibility / Entertainment / Organizational Strategy

The Economics of Paying College Athletes

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Chris Barker

Region 13 of the National Labor Relations Board ruled last month that the players on Northwestern University’s football team could unionize. Peter Ohr, the NLRB Director for Region 13, ruled that the athletes fall within the definition for “employees” contained in the National Labor Relations Act[i]. According to Ohr, the players spend far more time on football than many employees spend working. Further, the players spend more time on football than they do on their studies, nullifying the NCAA’s claim that they are students first and athletes second.

Obviously, ethics are the overriding element to this debate. Many college football players come from poor families, and it is difficult to understand why the players should have to struggle to make ends meet while the coaches often have multi-million dollar salaries. It seems like a form of slavery in that those in power, the coaches and administrators, are enriching themselves at the expense of the true laborers, the players.

However, compensating the players is actually a more complicated matter than just correcting a moral inconsistency.

In the fiscal year 2012, only 23 of the 228 athletic departments in the NCAA Division 1 generated enough revenues to cover expenses[ii]. Granted, part of this is because the coaches are paid well, but they need to be paid well so as to prevent them from taking jobs in the National Football League. Even with the coaches’ high salaries, the football and men’s basketball teams generally earn a surplus. The surplus is then distributed to the non-revenue producing sports like baseball and swimming. The hard truth is that if the players are paid, it will not come at the expense of the coaches. The money would have to come from the non-revenue producing sports.

It is morally obvious that college football and men’s basketball players deserve to be paid. However, if the university were to pay those athletes they would have to take scholarships away from hardworking students in non-revenue producing sports. This would run contrary to a university’s mission to promote higher education. On a related note, the implications for women’s sports are difficult to imagine. Title IX of Education Amendments of 1972 could easily be interpreted to mean that if men are paid, women also have to be paid. Unfortunately, there just is not enough money to go around.

Even with these economic hurdles, it may be possible to help the athletes out without crippling the athletic departments and without raising tuition to fund something unrelated to academics. Recently Texas A&M quarterback Johnny Manziel was suspended for a half for allegedly accepting payment for signing autographs. A few years ago, Ohio State quarterback Terrelle Pryor was suspended for allegedly selling memorabilia. It is difficult to understand the harm done by these things. Players like this who have obvious value to their schools should have the right to profit off of themselves privately.

The NBA may have come up with another great solution: an alternative to the NCAA. Technically speaking, athletes do not have to go to college in order to go professional. The NBA requires players to be at least one year out of college, so generally the best players spend a year in college before declaring for the NBA Draft. However, these players do have the option to spend that year playing professionally in the NBA Developmental League instead. Perhaps the NFL should design something like this.

The economics of paying college athletes are difficult. Most of the time, doing so would require either cutting other sports or raising tuition. Personally, I would be pretty upset if I was asked to pay a higher tuition rate so that Pitt’s mediocre football players could get salaries. The athletic department should exist to serve the university; not the other way around. However, this does not mean the athletes should be prohibited from profiting on their own by selling their merchandise.

 

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Kesling, Ben. Cohen, Ben. “College’s Football Team Can Unionize.” The Wall Street Journal. 27 Mar 2014.

Berkowitz, Steve. Upton, Jodi. Brady, Erik. “Most NCAA Division I Athletic Departments Take Subsidies.” USA Today. 1 Jul 2013. <http://www.usatoday.com/story/sports/college/2013/05/07/ncaa-finances-subsidies/2142443/&gt;

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