“With $8 Million on the Line, It Is More Than Just a Game” So Pay Them.

What would happen if colleges could openly pay star athletes?

Today’s New York Times includes a nice story of how Boise State and the Western Athletic Conference lost millions of dollars when the school’s kicker missed a 26-yeard field goal. Coaches, advertisers, ESPN, and many others make big money from the college football game. The players take large physical and life risks. They might get scholarships, which are worth less than they should be given the rigors of college sports and the low graduation rates. They rarely receive much else, unless they are in the definitionally tiny minority who become successful professionals.

To add insult to injury, players risk serious penalties if they violate the NCAA’s insanely hypocritical rules. The furtive nature of their compensation causes all sorts of problems, and initiates players into a corrupt world which does not serve anyone well except for their coaches with shoe contracts and others who can appropriate a greater share of the profits.

I look forward to the day that some judge issues a short decision which simply states: The National Collegiate Athletic Association is hereby enjoined from regulating player compensation.

I wonder what would happen if colleges were allowed to openly pay players. Commenters, what do you think?

Author: Harold Pollack

Harold Pollack is Helen Ross Professor of Social Service Administration at the University of Chicago. He has served on three expert committees of the National Academies of Science. His recent research appears in such journals as Addiction, Journal of the American Medical Association, and American Journal of Public Health. He writes regularly on HIV prevention, crime and drug policy, health reform, and disability policy for American Prospect, tnr.com, and other news outlets. His essay, "Lessons from an Emergency Room Nightmare" was selected for the collection The Best American Medical Writing, 2009. He recently participated, with zero critical acclaim, in the University of Chicago's annual Latke-Hamentaschen debate.

27 thoughts on ““With $8 Million on the Line, It Is More Than Just a Game” So Pay Them.”

  1. As a former professor and former-former Division III athlete, I'd rather just see NCAA Divison I completely eliminated. Even Division II tends to be perceived as so high-stakes that it distorts the educational imperative.

  2. I look forward to the day that some reporters investigate the upper echelons of the corporate NCAA.

    How integrated is it?

    How many vice presidents does it have?

    How are big are the salaries, the perks, the parachutes?

    Where are it's offices? How dandy are they? Who gets free cars?

    All of this is of course borne on the backs of kids who do the blocking and tackling for what I suspect are a ton of rich (mostly white) benefactors at the top.

    My hypotheses going forward is simple: That once you follow the money it will so sicken everyday sports people that the corporate NCAA will be forced to do what it always should have done before: Guarantee 4 years of tuition and books for every athlete who makes any college team. You can tell me the universities can't afford it, after you show me what the NCAA lavishes on itself…

  3. Let's start with just having NCAA scholarship athletes considered to be employees of the university, just like any other student who performs work in exchange for tuition. Currently, they are not.

  4. The baseball system is loads better. Minor-league teams, which pay their players, and college teams which get little coverage and can be an actual scholar-athlete situation. I'm with Tom H. – move the Div I and Div II level play to a minor league, and end the huge distortion of college life. Cal Tech and Chicago, that's the model!

  5. There is a deep crack in the foundation of big-time college sports. Big-money professional sports have been rather crudely grafted on to college extra-curricular activities. It is a bad fit, and it should never have been done that way. There is no good, remotely plausible fix for this deeply-ingrained blunder; we can only shift the problems around. No other country was dumb enough to set up their sports system that way. It is hard to predict exactly what the consequences of the Pollack Rule would be, but I consider it highly improbable that it would be an improvement. I agree with Dave Schultz that baseball has a better system, as does hockey; highly talented 18-year-olds can go pro or take a scholarship. I would like to see small minor leagues in football and basketball to make honest men out of those 18-year-olds who have the highest ratio of basketball or football potential to lack of desire for immediate higher education; maybe women too someday in basketball. As a practical matter, it is about as likely as the U.S. beating the West Indies in cricket, or the adoption of the Pollack Rule; all about zero. And if anybody cares, I have been a big Wisconsin Badger fan for decades, and plan to be for decades more.

  6. The end of Harold's speculation is that universities will have to decide whether they should engage in any business enterprise that makes money for them, which leads to something like this http://www.samefacts.com/2009/10/education-policy… , and that courts will have to decide which of those are unrelated business income and taxable on profits and property.

  7. I agree with the get-rid-of-Division I people: the NFL and NBA should just start minor leagues and pay people. The current system is ridiculous.

  8. I think that paying student athletes might kill audience interest and therefore destroy the revenue stream. I agree that college athletes unfairly receive very little of the value that they generate. But if you explicitly pay them, then the audience can't ignore the fact that the athletes aren't really amateurs. To be clear, I don't think student athletes at schools that contend for Div. I national titles actually are amateurs in any meaningful sense, but the audience, which pays the money, appears to have a lot emotionally invested in being able to believe in "amateur sports." Thus, if college football is not an amateur sport, then people won't watch. The world where televising bowl games yields millions of dollars is likely inconsistent with the world where student athletes are paid a fair share of the value they generate.

  9. When we refer to "the value they generate", are we even sure it exists? College football is incredibly expensive (when last I saw the numbers almost 15 years ago, the University of Washington was officially spending $8 million a year; I'd not be surprised if it's at least 12 now), and the accounting is highly suspect. The enormous purpose-built stadiums' capital costs and their operating costs aren't necessarily on the Football program's budget, for example. As noted above, these entertainment businesses pay no taxes (not just income tax, which is dependent on making a profit, but also sales and property tax). And at some schools the revenue side is at least as manipulated – the sports teams are credited with all of the income from sales of items branded with the university logo, for example, and might be credited for any alumni donations on a game day or over an alumni weekend that includes a game, as if none of those sales or donations would otherwise happen. My understanding is that studies of Collegiate Professional Sport have reached varying conclusions about whether it makes or loses money for the schools involved.

  10. College football is incredibly expensive (when last I saw the numbers almost 15 years ago, the University of Washington was officially spending $8 million a year; I’d not be surprised if it’s at least 12 now), and the accounting is highly suspect.

    One big flaw in the accounting at state universities is failing to account for the taxpayer tuition subsidy when calculating the cost of athletic scholarships. In the absence of the scholarship athletes, that would either be less, or the same, but go to more academically oriented students.

  11. The NCAA is a hypocritical and corrupt organization dominated by the big state schools and the high revenue producing sports. College football players in D – 1 are sadly exploited, since only a small percentage will ever play professionally and since it is very difficult to obtain a real education while working full time at football. In return, the players suffer physically, without any meaningful compensation. The fact that players do so voluntarily needs to be considered in the context of their misguided expectations concerning their career possibilities. College basketball is only marginally better. I alsways advise academically oriented athletes to choose a D-3 school where there is a more reasonable perspective concerning the role of sports competition.

  12. Bernard,

    The taxpayer subsidy for tuition isn't that big, compared to the football budget. A footbal team is what, 90 people? Say 100, for convenience. Washington state subsidizes students to about 15% of their tuition – a number that's going down amid budget troubles. I don't remember the current tuition rate, but if we assume it's about 20-30,000 then that's 3-400,000. It's real money, but it's a small fraction of even the official football spending.

    It's worth noting in this context that the University of Washington gives a 66% discount on tuition for in-state versus out-of-state students, but only gets 15% (and dropping) from the state. Essentially, out of the goodness of its heart and without recompense from the state the school is subsidizing in-state students. I happen to think that the local-service mission of the university is hugely important, and the the UW does it well (the UW is in my hometown, is my alma mater, and much more importantly has been a truly great research university since decades before news reports about Microsoft, Starbucks, and Nirvana caused the rest of the country to realize Seattle existed), but you have to wonder how long that state of affairs can persist under current funding trends.

  13. The circumstances of "student athletes" vary greatly, and there is reason to be wary of generalizations. However, I believe that some — a distinct minority — are quite well paid if we look at their situations through an employer/employee lens. That is those who have full-ride scholarships (tuition, room, board, books, small cash allowance, some miscellaneous) at a private school or an out-of-state public school; who are reasonably serious students; and who would not have an immediate lucrative professional option even if the rules permitted it. (The portion who DO have that pro option is rather tiny.) There is a reason why access to those full-ride opportunities is highly competitive.

  14. @Tim S:

    You raise a key question: why do people watch college football and basketball (which is what we're really talking about) with such avidity, when they are both minor-league versions of the pro sport? I disagree with your answer: that fans think they're amateurs. I don't think that the fans are that stupid. (For that matter, I don't think that the fans of pro wrestling believe that the matches aren't fixed.)

    Instead, I think that people watch college football and basketball because it combines high-level athletics with a sense of localism. There aren't that many major league teams, and most of them are associated with cities. Major league players and teams take off whenever they are contractually free to do so, and see an advantage to it. In contrast, colleges don't move, and there are plenty of them, for every region. Coaches, if not players, tend to have long tenures.

    This kind of thing is common in, say, Italian professional football. American major league sports do not play much to this need for local attachment, the odd Derek Jeter aside. That leaves the colleges.

    So I'm not sure that paying the players would destroy the college sport. And if it does, why care?

  15. Ken D.,

    You're assuming that these student-athletes, however dedicated they might be to the first half of that title, are permitted to engage in their pursuit of an education. This even though they're up early in the morning for a strenuous workout and practice, working out and practicing all afternoon, and being coached and lectured on their sport at other times. And they're travelling to and from a game seven weekends during the semester. They're putting in extremely strenuous, unusually damaging full-time work. Sure, some nonetheless manage to get a good education (there was an ex-NFL player with an MD who was a regular contributor to NPR's Morning Edition awhile ago), but can you imagine how those people might have excelled in a more balanced environment? Sure, the face value of an athletic scholarship might be $50,000 a year – but few of the recipients are able to access most of that value.

    And consider: when you talk about those students who've been lucky enough to have their obsessive dedication to Sports pay off with a full-ride athletic scholarship (to be cancelled the moment they get seriously injured in the practice of their duties as an athlete), there are many, many more high-school student-athletes who've put all their effort into sports because they were told it was their ticket to a college degree – and then failed to make it. Students who might have made something of themselves academically, who instead are failed athletes at the age of 17. We are offering a whole lower-class subculture a vision that sports is their ticket to possible riches, with a college education as a fallback – even though few will actually get that slightly recompensed college slot, and few of those who are so fortunate will actually get an education, and vanishingly few will get the riches of legitimate professional sports.

  16. The entire premise of the article is off base. As a former football player, my sympathies are with the kicker and the kicker only. If he had better teammates, perhaps a decent defense that allowed one less score when Boise State was ahead late in the game, he would never have been in that position. As for college athletics in general, Robert Maynard Hutchins had the right idea in the 1930s. But no one ever accused me of being practical.

  17. Warren,

    OK, but that just changes the source of the subsidy, I think. It still either costs the University something, or is misdirected.

    By the way, one marginal improvement I would like to see is making athletic scholarships full four, or even five, year commitments, regardless of athletic (not academic) performance. The current year-to-year term really does make it like a professional arrangement, and benefits the school and coaches at the expense of the athlete.

  18. Warren Terra:

    We probably do not disagree greatly. Some student-athletes are exploited, often the ones who wouldn't be in that system at all were it not (unfortunately) the de facto minor leagues for the NBA and NFL. Some, the ones described in my previous post, have a very good, well-paid but demanding, part-time college job. And some just have an extra-curricular activity that they enjoy, with or without some scholarship support.

  19. Warren Terra: when you're talking about the value generated by college athletes, you're not talking about the supposed surplus revenue returned to the institution, but rather the gross economic activity that's enabled. The surplus is always subject to manipulation — if the football team threatens to become profitable, just hire a bunch more coaches, buy more training equipment, renovate the stadium, do whatever it takes to sink those funds. (The same goes for other kinds of "nonprofit" organizations: there are always things you can spend on to make the books balance.)

    On the idea of paying the kids: how would you do it in a way that doesn't take away the last vestige of the universities' responsibility to at least pay lip service to preparing most of them for a life that doesn't include sport? Calling it a new minor league doesn't really cut it, because even colleges are fairly cushy compared to minor league sports. (The only thing is that at least most of the kids in the minors know they're not going any further, and may prepare backup accordingly.)

  20. Paul,

    (1) My point is that I believe the teams suck money from the university, and don't even provide athletic opportunities for genuine students (so-called "walk-ons", who are vanishingly rare in terms of playing time at the upper levels). You respond by saying that some teams might be in a position to make money for their schools but see no reason to do so. You may well be right, but that would hardly be a good thing. Remember, we are always being told that the teams make money for the schools; and just because the school is nonprofit doesn't mean that parts of it, like its football team, are enjoined from making a profit that it consumed elsewhere within the institution.

    (2) I guess I just don't see much value to the universities paying lip service to preparing their so-called student-athletes for a life after their dreams of wealth and fame in the NFL have faded. Yes, life as a minor-league football player might be harder than life as NCAA Division I football player – but it would be more honest. And there is a downside to all that lip service. The graduation rates for Division I NCAA Football and Basketball are atrocious, but after you exclude the third-string walk-ons who never play much they get even worse. As I've said repeatedly in this thread, the lure of a college degree is doubly a phantasm: the young people who manage to get those scholarships usually don't get an education, and many more young people damage their lives trying and failing to get those athletic scholarships, because our society (falsely) tells them that's their path to school. All day long on Saturday, at least three broadcast networks and more on cable are nonstop College Sports, with the occasional PSA about a college's lovely campus and strong academics. The only place in our society where college is advertised is in Sports, and our most disadvantaged youth are sold a bill of good, told Sports is the same as College. Too many later learn it's not, not for them.

  21. Dear gods NO! There is already way too much funding diverted from actual academic programs at what are supposed to be institutes of learning. Can you imagine what would happen to a school's budget if administrators decided they needed to come up with million dollar signing bonuses for a crop of promising freshmen?

  22. Warren Terra:

    Sorry, I wasn't clear enough: my point was that if you're going to compensate college-football players, you shouldn't say "Oh, the athletics department isn't making a profit, I guess these guys should get a few bucks over minimum wage." Instead, you should say "These guys are the foundation of an economic enterprise that has a gross annual revenue somewhere north of $100,000,000; the incremental revenue resulting from any given player being really good instead of mediocre or lousy is in the neighborhood of half a million a year [I'm pulling that out of the air, and of course it will vary from team to team], so the average compensation package of a starting player should be on the order of $150K." You don't look at the profitability when determining pay any more than you look at the profitability of the Ford Foundation when deciding how much to pay its top performers.

    Now that's entirely orthogonal to the question of whether the kids should be paid and/or whether the whole college football enterprise should exist in its current form at all. Just that if you have such an enterprise and decide to pay the athletes, that's roughly the way you should think about setting their compensation. (I'm drawing, btw, on a bunch of economics-of-sports work that was done for professional baseball, where stats frenzy makes it fairly plausible to calculate the incremental revenue generated by any particular player and compare it to their compensation. There's an interesting parallel in that the actual baseball clubs may be structured to lose money or make a nominal profit, but the ancillary enterprises, from parking to concessions to licensing, make out like bandits.)

  23. Another vote for Tom H. Paying athletes just raises new, different and probably even more intractable issues. I am highly doubtful that college athletics is nearly as profitable for colleges as it is asserted to be.

  24. At least some, and hopefully most, elite college players are already getting paid, and have been for some time. Hugh McElhenny, in the 1950s, said he actually took a pay cut going from college to the pros.

    I tend to agree more with Paul — whether high end sports are a net gain or loss on a college's bottom line is probably less important than, say, the effect on things like alumni donations, the overall economic impact on a community, etc. In Baton Rouge, where I live, the economic effect, even only a half dozen or so games each fall, is really, really big.

    That's not to say that something else couldn't have an equal or greater effect; however, the odds of something coming to Baton Rouge having the same effect are likely small.

    For most of the 1990s, I lived in Madison, Wisconsin — great town, bitterly cold winters — anyway, I recall Donna Shalala taking over as UW Chancellor. One of the first things she did was hire a big time football coach. I assume this was done to promote the university; a major side effect was that Saturdays saw a lot more traffic around the campus, and certain businesses (i.e, bars, restaurants) reported big increases in revenue…

    With all the money generated, and assuming that players are already being compensated, my own attitude is I'd rather be open and upfront than pretend it's all about "the old college try." But that's just me…

  25. I'm a little late to the conversation. I have two colleagues who are sports economists, one of them is on our University Athletics Council. We've had this discussion in the past: he believes that players should be paid, although the salaries shouldn't be open for negotiation (or not completely open).

    He believes the money would move from coaching salaries into the player's accounts. Coaches (and particularly head coaches) are paid grossly inflated salaries, even after accounting for the uncertainty costs. As at most Division I FBS schools, our head football coach is paid more than the President of the school, and much more than any faculty member. Some premium is necessary: schools generally have no more loyalty to coaches than coaches do to schools. Bill Snyder at Kansas State and Joe Paterno at Penn State are the exceptions that illustrate validity of the general rule. Perhaps Bob Stoops has generated that sort of loyalty in Norman; Mack Brown at Texas will find out what kind of loyalty he's earned with one more season like the one just past.

    Myself, I'd like to see athletes defined and paid as work-study students, and for their scholarships to be irrevocable except for poor academic performance.

  26. Pay them? Harold you fail to see the forest from the trees! The problem is that colleges think it is their duty to be the club teams for the NFL. The solution is to eliminate athletic scholarships entirely (as the Ivy Leagues has done). Why should a football player at UCLA be treated any different than a volleyball player? Why should UCLA or Auburn or any other school be the club team of the NFL again?

    Kill athletic scholarships and let the professionals start club teams. Seriously, of all the things you lefties think USA should do as Europe does, this is the lowest hanging fruit.

  27. In the early days of college football – 1920's or so – it was normal for colleges to hire big strong guys from the local community to play on their football squad. Purdue's athletic teams are called the Boilermakers because some of their early football stars were, in fact, boilermakers.

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