This piece was completed as the text component of my capstone project at Stony Brook University. To view the accompanying site, which includes this article and a video component, please visit https://nikdonadic.wixsite.com/mysite.
In recent years, criticism of the NCAA’s system of compensating student-athletes has reached an all-time high.
“The current NCAA system and rules are largely responsible for creating the underground black-market economy for players,” Jay Bilas, an ESPN college basketball analyst, said in a 2017 column. “There are contradictions everywhere, to the point of hypocrisy, and business relationships with third parties that strain the imagination.”
NBA superstar LeBron James, who famously forewent college to enter the NBA after high school, said simply that the NCAA is “corrupt.”
“I’m looking at what this March Madness is bringing in,” Jake Butt, tight end for the Denver Broncos, said to ESPN. “How much money do they bring in? Oh, but the basketball players are getting an education. How are they getting an education when they are missing the whole entire month of March?”
The true economic impact that a system change would have has left many wary of rushing to action. Additionally, a behind-the-scenes debate in the world of sports economics has made it unclear which system should be implemented, as well as whether a change is necessary at all.
The dialogue surrounding the compensation of student-athletes is like many other sports debates, such as those involving a potential contract extension for a prominent player in professional sports. One side believes that the player is being undervalued and deserves more, while the other argues in favor of the status quo or even that the team should pay the athlete less. As with players’ contract disputes, fans often stake out a strong position for or against the idea of paying student-athletes.
The difference is like checkers versus chess. In professional sports, the player wants a certain amount of money over a certain number of years, and the team wants to avoid cutting a hefty paycheck or to remain under a salary cap, or both. Or the team simply doesn’t believe the player is worth what he or she wants to be paid.
But the debate over the NCAA’s student-athlete system involves hundreds of schools, merchandise proceeds and television networks. The dollars involved shift from millions to billions, and the outcome could transform the dynamics of collegiate athletics.
As the sports media climate has shifted from straightforward game coverage and highlights shows to debate shows and hot takes, the fairness of the NCAA system has come up ad nauseam.
For example, prior to the 2018 NCAA Men’s Basketball Tournament, Stephen A. Smith, an ESPN commentator, argued for a players union.
If college athletes could bargain collectively, then they would, Smith said, “have access—at least to some degree—to the kind of revenue that’s being generated, thereby having the ability to decipher, dissect and really determine the level of revenue you believe you should have a piece of.”
Smith isn’t the first person to propose forming a collegiate players association. In fact, his suggestion echoes what some economists say is necessary for any change to occur.
In calling for a players association or union, Smith and others draw comparisons between the student-athletes’ current campaign for payment and how their professional counterparts worked to gain a seat at the bargaining table.
Todd McFall, an assistant professor of economics at Wake Forest University, sees a parallel between today’s student-athletes and 1970s Major League Baseball players.
“Baseball players had a union, but there wasn’t a reason for owners to deal with it until the Seitz decision that granted free agency,” McFall said. “And this story was repeated in basketball in 1976 and football in the early 1980s.
Now, players in those leagues have a real voice … from the way players enter the league to when and how they earn free agency.”
The National Labor Relations Board, or NLRB, ruled on the issue of student-athlete unions in 2015.
In January 2014, the Northwestern University football team filed a petition the NLRB seeking representation by a proposed union—known as the College Athletes Players Association, or CAPA. Initially, Peter Sung Ohr, Director of the NLRB’s Region 13, which serves areas of Illinois and Indiana ruled that “the University’s grant-in-aid scholarship football players were statutory employees under the NLRA (National Labor Relations Act).”
The university swiftly requested an appeal, which the NLRB’s national board granted in April 2014.
In August 2015, after over a year of deliberation, the NLRB’s national board overturned Ohr’s ruling unanimously, citing two main points of contention.
The first was the whether the NLRB could assert jurisdiction over the entirety of NCAA Division I Football.
“Asserting jurisdiction over the single team in this case would likely have ramifications for those other member teams,” the board said in its ruling.
The second was that many of the colleges and universities that take part in Division I football are public institutions, which the ruling held placed them outside the jurisdiction of the NLRB.
At least one economist found the NLRB’s logic on unionization at public universities unclear.
“I was perplexed by the NLRB’s decision, in that private schools could unionize, but public schools couldn’t,” McFall said. “I read the NLRB’s decision as one in which it was worried about the unintended consequences of allowing unionization.”
Allowing unions would irrevocably alter the NCAA system, McFall added. It’s a change he favors.
“The players need to have a union-type voice that must be listened to when compensation issues are debated,” he said. “This just can’t be repeated enough: Athletic departments will continue to operate in the status quo unless something forces their hand. A union would be one of these change makers.”
Lucia Dunn, a sports and society research professor at Ohio State University, agreed that a union would be necessary to shake up the system, and that would likely mean a court battle that could go all the way to the Supreme Court.
In Maryland, one politician tried a legislative route to giving student-athletes more control over their working conditions.
State Delegate Brooke Lierman proposed giving Maryland’s student-athletes the ability to collectively bargain with public universities following the death of Jordan McNair, a 19-year-old offensive lineman for the University of Maryland football team, in June 2018.
“It’s important that we start a serious conversation about how Maryland’s college athletes are being treated,” Lierman said. “I’m only sorry that it took the death of a college student to get us to this place.”
The bill received early media coverage and other legislators signed on, but Barbara Osborne, a professor of sports administration at the University of North Carolina and the author of “The Myth of the Exploited Student-Athlete,” said she knew from the outset that it had no shot.
“It’s not the first bill to be proposed with that sort of goal in mind,” Osborne said. “It wouldn’t have much of an impact because either the universities would face NCAA sanctions for violating its policies—by collectively bargaining—or the law would have to have some provision that said, ‘If and when the NCAA allows this, it’s legal here.’”
The bill was withdrawn promptly after it received an “unfavorable report” from the Maryland House Appropriations Committee.
“Since choosing to collectively bargaining [sic] may endanger participation in NCAA and athletic conferences, it is unclear if student athletes will choose to collectively bargain,” the report, prepared by Caroline L. Boice, a fiscal analyst in the Assembly’s Department of Legislative Services, stated. “It is assumed that institutions will not allow agreements that are in opposition to NCAA bylaws or conference rules due to the potential significant revenue loss.”
The financial stakes are high, in Maryland as elsewhere. The University of Maryland Terrapins was ranked as a No. 6 seed in 2019’s March Madness, the annual NCAA basketball tournament, one the biggest events in U.S. sports.
“The NCAA gets approximately 95% of their revenue from March Madness,” Andrew Zimbalist, an economics professor at Smith College, said in a 2011 interview with PBS.
As UNC’s Osborne pointed out, the NCAA’s member universities get a share of that revenue, a share that is essential to their athletic programs’ finances. The NCAA’s current television deal with CBS, which runs through 2032, pays just over $770 million annually for the rights to broadcast March Madness.
But even with those revenues, few Division I athletics programs turn a profit annually. In fact, just 24 of the 127 schools with Division I football programs turned a profit as of 2014, according to the latest available NCAA figures.
“There is still a misperception that most schools are generating more money than they spend on college athletics,” Kathleen McNeely, the NCAA’s senior vice president of administration, said. “These data show once again that the truth is just the opposite.”
Zimbalist projected in 2011 that by 2020, the median school with a Division I football program could be losing as much as $44 million each year.
Universities can use their NCAA revenues purchase new equipment, renovate athletic facilities or raise coaches’ pay, among other things.
Coaches’ pay is a common thread in discussions of just how much money athletic programs spend.
Just before this year’s March Madness began, CNBC published a list of the 10 highest-paid NCAA basketball coaches. No. 1 was Duke University’s Mike Krzyzewski at just under $9 million a year. At the other nine, all public universities, coaches got north of $3 million a year—in some cases, more than the governors of their states.
Osborne said that, in theory, paying a head coach top dollar should benefit the players on the team, in that the coach should be of higher quality and thus offer players a better opportunity to improve—and chase a professional career.
Some former participants in college athletics balk at the ballooning salaries.
“The coaches are making millions of dollars and they’re coaching players whose parents live below the poverty line,” John Shoop, a former college football coach, said in the documentary Student Athlete. “[Student-athletes] are propelling a billion-dollar industry and getting [a] sweatsuit for it.”
But Osborne argued that access to training facilities and academic assistance, along with other benefits, are undervalued parts of a student-athlete’s collegiate experience.
Of the 4,181 draft-eligible NCAA men’s basketball players in 2018, just 52, or 1.2 percent, were drafted into the NBA.
Even in the NFL, which features about four times as many roster spots, the percentage of draft-eligible athletes who were actually drafted was just 1.6 percent, according to NCAA data.
Nevertheless, each student-athlete on those basketball and football teams had access to the same training facilities and assets as those lucky enough to be drafted.
While an athletic department’s revenue stream is buoyed by its biggest two or three sports, usually football and men’s basketball, that money also supports each sports team that the school fields. The main benefactors, Dunn and Osborne say, are often the student-athletes in smaller sports.
If a new system that resembled “free agency” or a free market were to replace the current system, the biggest losers would be those smaller sports and many female student-athletes because—according to Dunn—women’s college sports simply don’t generate as much revenue, on average, as the two major men’s sports do.
Some economists hold that a student-athlete should be compensated for contributing to university revenues.
“Ideally, college athletes should probably be paid based on their respective rates of exploitation—their production of uncompensated revenues,” John Vrooman, a sports economics professor at Vanderbilt University, said. Other economists say it would be difficult to calculate those rates.
Nevertheless, many former student-athletes agree with Vrooman’s sentiment.
“All the money they generate for the programs and stuff, it’s kind of an unfair system,” Lonzo Ball, a former UCLA basketball player and current Los Angeles Laker, said to NBC Los Angeles in February of 2018. “Everybody’s getting paid anyway. You might as well make it legal.”
His teammate, Kyle Kuzma, tweeted a similar sentiment: “Someone take down the NCAA for generating billions of dollars to only to pay its student-athletes a cost of attendance of $900 dollars a month,” he wrote.
If Vrooman had his way, some sort of free-market system might appease student-athletes in the two largest sports. But sports that generate less revenue could be starved for support.
In the end, economists can’t agree on the best replacement for the current NCAA system.
“The systems proposed often fall along predictable lines,” Dunn said. “Those who believe in more of a laissez-faire sort of economic approach tend to favor more of the free agent, free spending models, and those who are more conservative economically may prefer limited increases to aid or even keeping the status quo.”
These opposing approaches have created an impasse among experts, as well as among fans, broadcasters and anyone who pays attention to college sports.
There is no consensus on what system would be most just. As a matter of fact, there is no consensus on whether changes need to occur at all.
Therefore, the curious case of collegiate athletics is doomed to remain the same. The interested parties will continue to argue vehemently for their perspectives, but ultimately gain no traction one way or the other.
Nik Donadic 