Jim Treleaven: Should College Athletes be Paid?

The following is an article written by a member of SSI’s Board of Advisors, and President and Founder at Via Strategy Group LLC, Jim Treleaven.

It’s almost impossible to read the popular sports media these days without hearing about the significant issues in big-time college sports in general and with the NCAA in particular. By far the most ubiquitous solution is paying college athletes. Last spring the Sports and Society Initiative (SSI) at the Ohio State University (OSU) held a popular panel discussion on pay-to-play in college sports. SSI is devoted to the development of a better understanding of the role of amateur and professional sports in the economy and society at large. Its goal is to promote high-quality research related to issues of societal concern in sports at all levels through research grants, undergraduate and graduate training and internships as well as sponsoring conferences and interactions with policymakers.

The panel was split into two sections. The first section featured experts in sports law, economics and the media. The second panel included seven former OSU athletes, most of whom had enjoyed successful professional careers. The discussion was quite lively and, while some of it was expected, many aspects were quite enlightening. In particular, while some panel members recommended that players be paid, a variety of other less drastic suggestions surfaced which address some of the specific issues often raised to justify pay-to-play. More on those later.

Here I would like to briefly discuss why I think paying college athletes would be at least intractable and at worst a major mistake. This is a position I’ve held for some time, but the panel provided some thought-provoking insights. While the issue is quite complex, here are five significant issues that need to be considered.

Big money and the value of college athletes. The most common argument is that universities reap millions of dollars in revenue on the backs of unpaid and overworked athletes. Coaches are paid millions of dollars and are often the highest paid employees at many universities with big-time sports programs. A common analysis is to calculate the “fair market value” of college football players. Business Insider did an analysis calculating the value of each player by allocating 47% of annual football revenue over the 85 scholarship athletes. The University of Texas had the highest value $671,000, at OSU that value was $462,000 and the NCAA Division I-A (FBS) average was $164,000.

The implication, although not often stated in these types of analyses, is that these universities are able to attract ticket buyers and ancillary revenue because of the notoriety and brand value of the athletes. Were it not for Ezekiel Elliott, no one would show up for the games on Saturday. This analysis is flawed- wrongfully attributing the brand value to the athletes rather than the University sports programs. This argument was addressed in an article in the Chronicle of Higher Education which rightfully points out that the brand value is Ohio State football and not the individual players (not to negate how exciting a player Ezekiel Elliott was). If Ezekiel Elliott was injured early in the season, would 100,000+ people still show up for the games on Saturday. The answer is of course-yes. A perfect example of this was the spring game last April which was held the day after the panel discussion. OSU had sent a record number of athletes to the NFL following the prior season and, in fact, returned only a small handful of starters. So, in a practice game in which most of the participants were not at all well known, over 100,000 people still attended. Certainly they came in anticipation of seeing the next Ezekiel Elliott, but undeniably the brand value accrues to the OSU football program built up over 100 years and not any particular athlete.

Amateurism-are athletes employees? Two major events have challenged the traditional NCAA position on amateurism. First, the lawsuit filed by former UCLA basketball star Ed O’Bannon sought compensation for the commercial use of his image. The courts held that certain NCAA rules violate federal antitrust law, but failed to sanction pay-to-play. Second, the Northwestern University football team sought the opportunity to unionize as employees. Similar to the court in the O’Bannon case, the National Labor Relations Board did not allow the team to unionize but held many of the rules imposed on the players by the University to be “unlawful”. All of this begs the question-are big-time college athletes amateurs? By some measures they are certainly well compensated. The value of a four-year scholarship can reach upwards of $250,000. The counterargument here is twofold. First, no one is arguing that the vast majority of the almost half-million NCAA athletes are not truly amateurs. Division III athletes are prohibited from receiving any financial aid as a result of their participation. So, the question is, where to draw the line. The range of possibilities is quite broad. One end of the spectrum is the starting Division I football player and, at the other end, the benchwarmer on a Division III team. In between are Division I athletes, both men and women, in a variety of sports that receive only partial scholarships or none at all. Almost all discussions, including the panel discussion at OSU, focus on a minuscule handful of athletes-certainly no more than 5000 out of 500,000 or less than 1%. The proverbial tail wagging the dog.

What about the 99%? FBS football and basketball programs certainly provide the bulk of the revenue which supports all of the athletic programs at those universities. At OSU that’s two sports out of 36 and roughly 120 athletes out of almost 1000. If the money from the revenue sports was used to support only those sports (including player compensation) where does the money come from to support the other 34 sports and almost 900 athletes. Some non-revenue athletes are quite recognizable – for example OSU’s Olympic Gold Medal winning wrestler Kyle Snyder. The representatives of the women’s programs and nonrevenue sports on the panel definitely raised this. In addition, issues involving Title IX certainly arise.

What about the 90%? This question stems from the fact that only about 10% of the FBS programs operate at a surplus (OSU does) and virtually none of the other NCAA programs do. While we can’t solve the problem of how to fund college sports here, diverting revenue from programs that already run at a loss is hardly the solution. Further, unregulated compensation would unfairly benefit the 10% and penalize the rest. Leveling the recruiting playing field is already a challenge.
Managing the locker room. This was an issue raised by the athlete’s panel. Since some of the other panel members had recommended compensation based on performance, the athletes were rightly concerned about the resulting inherent conflicts and disruption and the almost intractable challenges that it would create for coaches in maintaining team cohesion.

The preponderance of the arguments here, as well as the general sentiment of the panels, was that, regardless of the issues, paying athletes was not necessarily the right solution. In fact, the athlete’s panel in particular, posited a number of remedies that were quite sensible and addressed a number of the issues. Among these were using total cost of attendance in calculating scholarship award levels (which has already been widely implemented), continuing tuition support for athletes once they are done competing (which OSU already provides), continuing medical support, improved academic support as well as more substantive academic programs, limitations on practice and participation hours and additional training in managing finances and other life skills. There are other actions that could be considered, including deferred compensation and eliminating the NBA and NFL rules limiting entry to the professional ranks for a period of time. These more drastic changes have their own issues.

Lest we lose sight of the significant value of athletics as part of a broader education, we shouldn’t lose sight of the value of athletic participation.

“That’s why the United Nations has declared April 6 the International Day of Sport for Development and Peace. Athletics can provide entertainment and exercise, yes, but also so much more. It can be used as a tool for tackling social issues—fighting obesity, empowering women, integrating refugees or promoting peace. Sports are more than mere games. They’re essential to the healthy transformation of society.” Fahoum

Nor should we lose sight of the motivation of most athletes to participate in their sports. The Olympics date back to ancient Greece. Millions of male and female athletes participate in sports at all levels for a variety of intrinsic values. The final question to the athlete’s panel was-if they weren’t paid and didn’t receive any academic scholarships, but had the opportunity to participate in their sport at OSU, would they? All seven athletes said yes.

On Thursday, April 20, 2017, from 7:30 – 9:00 p.m., SSI will host a another public panel discussion on another very visible issue in sports – The Role of Athletic Activism in Social Change at The Blackwell Ballroom on the OSU Campus.

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