Originally Posted by
sagegrouse
As promised:
The NCAA and the colleges are losing their battle against college athletes receiving benefits from endorsements and license fees on use of “their image.” California passed a law allowing it, and the die was cast. Certainly, it is an equitable move, but it is one that risks the functioning and highly elaborate college sports model. The model thrives on revenue received from competition. There is a risk that the biggest and best-known schools with the largest number and the richest supporters will be able to recruit all the best players.
College sports are immensely popular and generate huge sums of money -- $10 billion, says the NCAA, and tens of millions of fans. Spending was higher and presumably a lot of the difference was made up from donations from supporters through organizations like Iron Dukes.
What’s at stake if the NCAA competition is lessened? First, enjoyable college sports competition, which has been a big part of American life for 100 years. Then, benefits for athletes – the NCAA says $2.9 billion is given in athletic scholarship aid to 150,000 student-athletes. Finally, the training of world-class athletes in the US college system.
Let’s review the current system. College athletics operate under a model where maximum prices are set for athletes – college expenses, living costs, some amount of stipend. Some get less – one-half scholarships are common in soccer, baseball and other sports, and many athletes are just regular students who go out for sports. Of course, colleges compete for athletes on the qualitative side: coaching, facilities, travel standards (chartered flights vs. buses, e.g.), and softer things like “prestige” – ta-DUM –“the Brotherhood!”
With these fixed labor costs, the leading programs generate sizable surpluses for football and men’s basketball. These “economic rents” go to pay higher salaries for coaches and AD staff, even better facilities for the programs, but also to pay scholarships and program expenses for sports outside of football and men’s basketball. These cross-subsidies make it possible for up to 200 players in other sports at each school to receive financial aid to compete.
Some of the leading performers in national and international sports come out of these non-revenue, or subsidized programs. “Olympic sports” is the designation often used. Moreover, everyone realizes that Title IX has pushed women’s college athletics far, far ahead of where they would have been without it. And it costs money.
Who suffers from the current system? The stars of football and basketball could earn more under a competitive salary system, where teams bid for players. It is not clear that many other players could earn more than scholarship money – and, of course, more money going to the stars means less money and fewer scholarships for college sports in general. Football stars will have multiple seasons of lower pay, but the top basketball stars are gone after one season.
If you, moreover, are an 18-22-year-old highly competitive American athlete in virtually any sport, you look to colleges for financial support, training, and athletic competition with other athletes. Academics is also a benefit and part of the consideration, but I won’t linger on it here. You expect to go to college unless you are good enough at a very young age to get remuneration from professional sports organizations. This is an American approach – in other countries, professional sports clubs seem to offer more than just soccer and support men’s and women’s basketball and other sports. There are also national sports organizations with money to support promising athletes. But the US system is hu-u-uge – with hundreds of colleges offering athletic scholarships in a couple of dozen different sports to 150,000 players.
Is the current system illegal, immoral or unethical? I would argue it is not. The colleges say, this is our system: you can play here or go somewhere else. They are not covered by antitrust laws (combinations in restraint of trade, etc.), and Congress is not likely to pass laws restricting athletics at Bama, Texas, Ohio State, Notre Dame, USC and elsewhere. But the current system will change rapidly when college athletes can get endorsements.
And competition could well suffer, and competition is why football and men’s hoops can generate such surpluses from attendance, TV and media, and donations from supporters. There are 50-60 programs in a position to compete for the highest honors. Many of them, of course, are “a few seasons away,” but they still play against the best and have some success. If the number of top-echelon program sinks to ten or twelve colleges, the economic model may be irretrievably broken.
Giving athletes the right to make endorsements and earn from their own images could endanger the college athletics model and have the unintended consequence of limiting the number of players who are able to compete in college. If you are trying to balance off the good and the bad, you and I may make different judgments – but the important point is that the college sports world is likely to change substantially.