Paying College Athletes Fairly By Not Paying Them At All

By:  Todd Burach, Ruling Sports Contributor (Twitter:  @ToddBurach)

News flash (if you’ve been in hibernation), college sports are changing. The ongoing lawsuit headlined by former UCLA All-American Ed O’Bannon has progressed further in court than any similar case against the NCAA has in history. “Although the court case is likely to drag on for at least another year, it has already prompted the Association to scrap a licensing deal with EA Sports.”[1] Clearly, things are happening.

The elephant in the NCAA’s boardroom is the impending compensation of college athletes, and what that near eventuality will look like. NCAA sports are big business, with billion dollar television contracts ($10.8 billion over 14 years with CBS and Turner), video game deals and merchandising, among other lucrative revenue streams. On the surface, one can easily argue ‘pay the players’. It’s their blood, sweat and tears. It’s their image on TV (as the courts may soon agree). It’s their signature (Right, Johnny Football?). Pay them and let’s all move on to something else. Unfortunately, it’s not so simple.

The compensation of college athletes can be thought of as a twofold issue. First, how do you distribute profit that is affiliated with the NCAA at a general level (e.g. the economics from a TV deal with the likes of Turner and CBS)? And second, how do you distribute/allow-for economics that can be directly attributed to a unique individual’s likeness or marketability (e.g. Kevin Ware T-Shirts during last year’s Final Four)?

When considering the former, the distribution of general NCAA economics not directly attributable to any one individual, the obvious concern is who do you pay and how much do you pay them? The impacts of the star quarterback are greater than the third string quarterback, or the lacrosse player, or the softball pitcher. Implementing a ‘meritocratic’ compensation system would quickly lead to a slippery slope, impacting legal institutions such as Title IX and anti-trust that would completely alter the landscape of collegiate athletics. The truth is, for 99% of NCAA athletes, those that ‘go pro in something other than sports’, things aren’t so bad.  They might even be quite good. The cost of a college education is now north of $40,000 per year. Factor in room and board, training, clothing, networking, experience, etc., the vast majority of college athletes are reasonably close to getting a fair deal. And, if we are able to dip into the NCAA coffers and distribute some additional economic gains via “increasing the cost of attendance”[2] (i.e. additional stipends), an idea the Big Ten’s Jim Delaney has entertained and Shaquille O’Neal endorsed on CNBC, we would be one step closer.  An increase in stipends could either be paid equally across all college athletes, or distributed using a financial need based assessment (similar to what’s already in place for all students receiving financial aid).

The second issue with compensating college athletes is the idea that certain revenue is directly attributable to or can be generated by a unique individual, whether it is the use of Ed O’Bannon’s likeness in a video game, or Johnny Manziel being offered $7,500 to sign autographs. In essence, this is the Olympic Model, the idea that athletes maintain their amateur status by not being compensated directly for their on-field participation, yet allowing them to (within set guidelines) profit off of their individual marketability.  If Johnny Manziel can capitalize on ‘Johnny Football’, why not let him? The revenue he generates from marketing deals can be put in a trust until he is five years removed from his time as an amateur athlete. The issue here becomes the ancillary impacts of the Olympic Model: namely the destruction of fair play and competition in college sports. Think about what would happen to an already suspect recruiting process  – boosters would just guarantee payments, err ‘marketing deals’, to star recruits and the schools with the deepest pockets would sign all of the superstar talent. The balance of competition in amateur athletics would be destroyed. If you can somehow create a system, a process, around the application of the Olympic Model for college athletes, maybe, just maybe, this would work. Unfortunately, as I brainstorm the concept in my head, too many problems arise. I’m just not convinced the model can be applied without destroying balance on the playing field.

The good news is there are two things the NCAA can do, in my opinion, to greatly improve the compensation and benefits for 100% of college athletes, neither of which requires additional compensation. First, the NCAA should improve and act upon outstanding quality of life issues that impact all college athletes. Topics like modernization (and humanization) of the NCAA compliance rule book, transfer rules and national letter of intent issues can all be made more athlete friendly. And while these “increases” should (along with an additional stipend) satisfy the 99%, this still undervalues the 1%, the select few athletes whose individual value is in excess of the current benefits of being a college athlete, yet are forced to go to college by NFL and NBA rules for three or one years, respectively, before turning pro.  What about Andrew Wiggins, the would-have-been number 1 overall pick in this year’s NBA draft? What about Johnny Football or Jadeveon Clowney? How do you compensate them fairly, when their value today to a school, to the NCAA, to themselves, is clearly in excess of the existing package of benefits an NCAA athlete receives (or will receive in the new world)? The answer is you can’t and you don’t.  You don’t even attempt to ‘compensate’ them at the college level. In my eyes the answer is pretty clear. You let them go pro. Not after one year or three years. You let them go pro when they are ready.

The argument in favor of forcing kids to go to college for a specified number of years before an NBA or NFL career is selfish. Making prep phenoms go to college for a minimum number of years allows the product that the NCAA is selling (and we fans are buying) to be better while paying these superstars way below their worth and inhibiting their ability to make money off of their marketability. Age minimums also allow pro general managers an opportunity to get a better look at high school superstars while not paying them rookie deals to come into their prime. By forcing Andrew Wiggins to college, he is one year closer to his peak when he starts on an NBA team’s payroll. That benefits everyone except Andrew Wiggins. While you may say most high school players fail in the NBA, the overwhelming majority of kids who went from preps to pros on ‘sound advice’ made millions over the course of their careers.  I’m pretty sure if your kid, at high school graduation, could step into his or her dream job, with millions of dollars guaranteed, we’d encourage them to go for ‘it’. And, if ‘it’ does not work out after five, six, eight years, your child would have more than enough cash in the bank to pay their way through college free and clear. The Entrepreneurial Association of America did not tell Mark Zuckerberg that he could not drop out of Harvard and start Facebook because he hadn’t put in his minimum two year requirement before pursuing his dream.

I’m all for opening the NCAA’s coffers and increasing the ”cost of attendance” for the 99%, but for obvious reasons these payments must be distributed equitably across all athletes and all sports (either across the board or on a financial need basis). Leveraging the Olympic model, which in my opinion can be the right thing to do, is tricky. It opens up the potential for the big money schools to attract the big time talent. An Olympic model would have to be policed stringently in order to maintain competitive balance and I’m not sure both can be accomplished. The most important changes that need to happen regarding athlete compensation have nothing to do with compensation at all. The NCAA needs to improve quality of life issues for all athletes and not try to compensate those athletes who can make what they are truly worth on the next level right now. For those athletes, it needs to let them go pro.

[1] “Basket Cases”. The Economist July 27, 2013

[2] “Big Ten’s Jim Delany on athlete pay, likenesses”. USA Today. Bob Kravits.

6 thoughts on “Paying College Athletes Fairly By Not Paying Them At All

  1. why not just have a D-league for sports. Most of these guys don’t want to go to college and get an education anyway lets be completely honest here. So in that case why not make a d-league or why not the sporting programs be completely separate from college in the first place. Who cares if they get an education, cause you know the majority of colleges don’t. They care about how good their team is so the school can make as much revenue as possible.

    And that revenue DEF doesn’t go back to improving the education of the schools…god forbid. that money goes right back into the sports programs.

  2. The professional league age limits are imposed by the pro leagues, not the NCAA. And are bargained by the players associations to protect there career longevity.

  3. NCAA wants those stars at least for a year at the college level, the amount of revenue they generate is absurd. If athletes are not going to be paid while in college schools must not be allowed to use their likeness outside of the college venue. Why not set up an escrow account for players to receive money upon graduation? For example if a school sells 10,000 Johnny QB jerseys he receives a portion of those proceeds after graduation and on all future sales after graduation. As a former female collegiate athlete I understand the Title IX issues but I also understand that the sale of my basketball jersey didn’t generate a single $1 for my University so why should I be entitled to money I didn’t earn?

  4. You know who I think is watching this debate the closest? Phil Knight.

    Yeah, the Oregon Alum (oh, and Nike Founder).


    Dear 5 Star Recruit, Nike is willing to offer you a $2M trust — cash — whatever, if you sign with Oregon. Sign with USC? You get bupkis.

    Alicia, what are the CFL rules? Could the players sign a contract with them out of high school? If not, I would love to see the CFL pull these guys right out of high school and sign them to deals and anchor them in Canada. That would put the NFL and NCAA on their ears.

  5. are we talking about helping young people learn about nurturing there minds? for bettering of humanity. or are we teaching them education does not matter. whats the old saying u can give some one a fish, or you can teach them how to catch them their self’s.

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