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Brooks Wilson's Economics Blog: Schwarz on Pay-for-Play

Saturday, July 16, 2011

Schwarz on Pay-for-Play

Draft quality NCAA football and basketball athletes are underpaid to the tune of several hundred thousand dollars per year (reference).  I believe that the difference between the competitive wage and the actual wage is sufficiently large to constitute exploitation.  Walter Byers, a former NCAA president (1951-1988) agrees. In his book “Unsportsmanlike Conduct: Exploiting the Student-Athlete” goes further labeling the NCAA scholarship system a “neo-plantation belief that the enormous proceeds from college games belong to the overseers (administrators) and supervisors (coaches). The plantation workers performing in the arena may only receive those benefits authorized by the overseers (reference).” 

From the pages of ESPN, Andy Schwarz cogently argues that the NCAA could step aside and allow top athletes to earn a competitive wage (“Pay-for-play -- the truth behind the myths”).  I quote from his opening statement and then list the myths he busts.  His selection of myths could be taken from my class discussions on the NCAA and labor markets.  To learn his answer to the myths, you must to read the linked article.   
It happens so often that it's barely even scandalous anymore.

Some college or its boosters are caught giving "extra benefits" to college football players. In some case the allegations range into the tens or hundreds of thousands of dollars, as was the case with Auburn quarterback Cam Newton and Ohio State's Terrelle Pryor. Economically, these scandals are clear evidence that the NCAA's level of compensation for athletes is so far below the market rate that cheating is irresistible. Despite this, it seems inevitable that well-intentioned columnists, coaches and sports legends weigh in, saying it would be great to pay players, but a long list of impediments makes impossible anything except the NCAA's scholarship-only system.

Every one of those reasons is wrong. Join me on a tour of the top myths about paying college athletes.

Myth 1: It's too hard to figure out how to pay players fairly.

Myth 2: Title IX outlaws paying players.

Myth 3: Pay will ruin competitive balance.

Myth 4: Paid athletes can't be real students.

Myth 5: Paying athletes means that fans won't watch.
I have two additional points to make, one positive and the other normative.  If the NCAA allowed universities and colleges to determine wages for players, it is likely that athletes playing football and basketball would be paid much more.  Compliance costs should plummet but probably less than wages increase.  Colleges and universities are likely to cut athletic programs that lose money. 

A student of economics need not believe that universities and colleges should increase wages of athletes.  They are not free to deny empirical evidence that college and university athletes playing football and basketball are paid significantly less than the competitive wage. 

1 comment:

  1. I agree that if colleges were to start paying athletes it could spell the end for some of the smaller sports. If these sports do not bring in enough revenue to be profitable then they could be cut.