Tuesday, August 6, 2013

Paying College Athletes: Fantasy And Reality

Photo Credit: Thomas Beindit
In recent weeks, the biggest story on the college landscape has been the issue of student athlete compensation.  Whether it's through scholarships, sponsorships, autographs, or just gifts, everything has been on the table.  The NCAA has held firm with the concept that student athletes should be considered "amateurs" and receive nothing more than academic scholarships and expense benefits such as housing, and equipment.  The media has argued that players deserve at least a share of what has become a multi-billion dollar industry (Yes, that's billion with a b as Heisenberg himself would say).  The debate has raged back and forth and nobody seems to be able to reach an agreement.

The biggest part of this failure has been the fundamental problems with the system, the culture clash, and the general ignorance towards the topic.  Many claim to have a deep understanding of the issue that they are discussing, but college athletics and the NCAA rulebook are incredibly complicated and to be honest, I don't even think I understand everything fully.  Regardless, there are still some glaring flaws in many of the mainstream arguments that have been pushed around in recent weeks and I want to take a brief look at some of them.  

The first thing I want to address is the basic concept of the NCAA model.  The college athletic system has fundamental flaws.  There's simply no denying this and I'm not even talking about the concept of paying players yet.  The NCAA system is designed to live under the concepts of "amateurism" and that all sports are created equal.  Some college sports may still have a good degree of amateurism, but it's hard to argue that players like Trey Burke resemble anything of an amateur.  His name would trend worldwide during games, he has made the University of Michigan millions of dollars, and he was consistently featured throughout the media.  The only reason he was considered an "amateur" was because he didn't actually receive a salary.  We don't need to discuss that he's probably a more well known basketball player than half the NBA, but according to the NCAA, he's an "amateur".

The second argument is even more absurd.  At some point, college athletics will have to recognize that the sports are not equal.  I understand there are many issues in saying some sports are more important than others, but this leads into an important discussion that I'll touch on later.  Aside from a few select sports, there are really only four sports that make athletic departments money (football, basketball, ice hockey, baseball).  Every college sport requires an investment from the athletic department in the form of scholarships, equipment, coaching salaries, facilities, and other costs.  The fact is that outside of these few select sports, the remaining sports lose money with few exceptions.  In the grand scheme of things, it means that the "major" sports fund the other sports.  This will be important for later.

From now on, I'm going to be largely dealing with the four sports listed above that make money.  The biggest issue with the NCAA model is that in these sports, they function more closely to minor leagues than they do towards school sports.  Players are recruited by coaches with the specific purpose of helping the team win and not for academic reasons.  Universities use many different factors to select students, but it seems backwards to select a student for admission because he's good at a sports rather than for his academic skills.  A real school team should be composed from the student body, not from students recruited from elsewhere that may or may not have been accepted using the general standards of the school.  The current teams aren't really as much a representation of the school as they are of the coach who happens to work there.  This is a major flaw in the system because instead of simply saying that these players are there to work (play a sport) to get paid, they have to live under the concept that they are there for an education.  Some players may be there for academics (even in the major sports), but it still doesn't change the fact that they are more selected by the coaching staff than the school.

Accepting that there are fundamental flaws in this system is important because it helps set the scene for the actual discussion.  So, how does this fit in with paying players?  The first thing that must be noted is the fact that most of the college athletes don't actually make the school anything.  In fact, they actually cost the school money.  This begs the question.  Why should these players be paid if they are actually costing the school money?  The easy answer is they shouldn't be paid, but this runs straight into the other problem with the system; the sports are considered equal.  

How do you decide which sports should receive money and which should not?  There have been numerous suggestions for how to get around this issue.  Typically, they fall into one of the following categories:
  • Current Model
  • Player Stipend Model
  • Olympic Model
  • Revenue Making Sports Model
Let's go through each of these.  We've already touched on some of the problems with the current model.  It lives under the faulty concept that all players are amateurs and that all the sports are equal.  This doesn't add up and as a result, there's no doubt that certain players get hurt in the process.  Trey Burke made the University of Michigan more money than he received.  Not only from things like jersey sales, but from media attention and ticket sales as well.  Anybody who thinks Burke receive more than he earned is just wrong.  You can certainly make an argument that he was at least decently compensated.  He received a free education, some living expenses, and access to fantastic coaches who helped develop him, but in a free market, he would have been paid handsomely more than the value he received through a scholarship.

The player stipend model also presents some problems.  Let's assume the NCAA ratifies a rule that allows schools to give athletes a $1000 stipend per semester ($2000 a year).  That would at least help to make up for some of the loss that players like Trey Burke take as a result of the current model.  However, this still runs into the concept that all sports are created equal.  They would have to pay the $2000 to every student athlete on scholarship, which adds up pretty fast.  For small schools that either make a small amount of money or lose money, this would be a major problem for their athletic department.  Even if the NCAA made it optional, the recruiting hit would be gigantic.  Imagine one school promising $2000 a year and others promising nothing?  That's a huge disadvantage.

The Olympic model also has some issues.  The concept is that schools are not allowed to give players money, but players can accept outside endorsements from companies such as Nike, Adidas, or Reebok.  This basically makes it up to the players to make their own money, just as a student may find a job after school.  In theory it seems logical, but the door opens to a lot more.  There's been no specific proposals created that create equal playing ground between big and small schools.  Here's a perfect example.  For a school like Michigan or Notre Dame, recruits could almost be guaranteed endorsements when they arrived on campus.  

Imagine big recruits like Derrick Green or Da'shawn Hand.  They would definitely get deals the minute they step on campus.  Would they get deals if they went to a small school?  Probably not, but it would probably be surprising to many to learn the amount of "small" schools in the nation.  Only 23 athletic departments had a profit in the 2011-2012 season.  So when we're talking about "small" schools it doesn't necessarily mean schools like an Eastern Michigan or a Miami (Ohio).  Illinois and Northwestern's athletic departments didn't make a profit in 2011-2012.  This was only one year, but the point is that there would be a massive gap between the "major" programs and the ones that are a few notches down.  The attractiveness of businesses sponsoring athletes at big name schools is pretty obvious, which will definitely impact recruiting since in turn, they would be able to receive more money and publicity.  What if athletic departments promised companies sponsorships with the entire athletic department if they hooked up recruits with deals?  What if the big programs took all their funds just to advertise these recruits/athletes to make them marketable and attractive to endorsement deals?  The separation could become incredibly large in just a short period of time.

The final model is something that's probably not even possible legally, but we'll discuss anyway.  It pretty much incorporates the stipend of the endorsement model, but limits it to only the sports that actually make the school money.  This is arguably the most realistic model, but I'm not confident at all in the ability of the NCAA to actually state that some sports will get special treatment over others.  It could turn into a massive discrimination suit since probably more than 90% of the profitable sports in the NCAA are men's sports (just speculation).  So even if this may be the most realistic model, my guess would be this is probably the least likely to happen.

Ultimately, this leaves us with what I gave as the title of this article: fantasy and reality.  The fantasy of college sports is that the athletes are making the athletic departments incredible amounts of money and are kept away from the money so the heads of the departments can keep the money for themselves.  I'm not going to sit here and act like the heads of athletic departments don't make money because they do, but I'm also not going to sit here and act like athletic departments are all sitting on massive amounts of money.  Are there players that miss out on money because they are limited by NCAA rules?  Absolutely, but there are also thousands of players who get to play college athletics and get a free education because of these same rules.

I've seen one of my favorite follows on Twitter tweet this out several times, but it rings true today.  Right now, there isn't a great model for how to deal with these complex issues.  May someone will create one, but there isn't a great solution on the table right now.  Paying the players would be great, but somehow you have to get around the concept that the sports are all created equal and that many athletic departments don't make a profit.  Paying the players not only runs the risk of killing athletic departments' budgets, but it could also be a major blow to smaller schools, smaller sports, and end up leading to other problems such as early agent exposure.

Honestly, I can relate to the anger that many express to the fact that billions of dollars in revenues are made, but little goes to the players that make it.  The problem is that paying them just doesn't fit into the current model with its fundamental flaws.  In my opinion, there are only two legitimate ways to fix this problem.  First, stop trying to make college sports into minor league sports.  Create strong minor league programs for football and basketball, which should draw the best players away from college athletics and towards professional leagues instead.  Hockey and baseball have these already and the intensity of these sports in college is significantly less than football and basketball.  This way there aren't as many players that turn into a Trey Burke-like scenario.  The only other option I believe will work is to split the NCAA.  Take the "power conferences" and allow them to create their own group to oversee athletics.  This small group of schools are the ones that make the money and can truly compete in a pay-for-play model.  That way small schools don't have to worry about trying to compete with the big schools in paying their players.  The only way this happens if if conferences start seceding from the NCAA (not even sure if that is an accurate term).

Ultimately, I think some type of stipend plan is going to be created.  I've talked about some of the issues I believe stipends will create, but it will get the media and fans off the NCAA's back, which they will consider a win for the time being.  Unfortunately, we probably won't see the needed reform for years to come that will settle this issue once and for all.


  1. Great article. I'm a big advocate of the Olympic model but I agree that some changes would have to be made to make that possible. I know the Power 5 conferences have autonomy now but that hasn't produced any significant changes yet. I guess the current system will have to work for now.

  2. Great article. I am a big advocate of the Olympic model but I agree that some changes would have to be made to make that possible. I know the Power 5 conferences have autonomy now but that hasn't produced any significant changes yet. I guess the current system will have to work for now.