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Players produce money for all but themselves
As a finance professor, I find the financial problems of the NCAA to be borderline criminal. As an educator, I find the educational mission of the NCAA to be fraudulent. As a black man who has seen what the NCAA does to the black community, I find myself simply offended.
The NCAA is in possession of an 11-year, $6 billion contract for the rights to air March Madness. This does not include hundreds of millions of dollars earned each year from bowl games, regular season games, merchandise agreements and concessions.
Coaches earn as much as $4 million per year, while the players and their families, many of whom come from poverty, earn almost nothing. Coaches are allowed to jump from job to job, going to the highest bidder, while players who transfer lose a year of eligibility.
Coaches and administrators earn millions from excessive commercialization of player images, while a player is not allowed to earn a penny from his/her own image.
I have witnessed students being taken out of class for an entire week to play in a nationally-televised football or basketball game, with academics (and the fact that the student’s grade has been jeopardized) becoming an afterthought.
Players are treated like professional athletes, not students, and a weak performance on the field will cause them to lose their scholarship. Any institution operating as a government-sanctioned cartel, riddled with hypocrisy, disproportionate and exploitative compensation schemes, and glaring disregard for educational values should be scrutinized more carefully.
Q&A on the NCAA:
1. If the athletes don’t like the system, then why don’t they just do something else?
The problem is that the NCAA is allowed to operate as a cartel. Effectively, this implies that all of the schools exist under the same umbrella and make price-fixing agreements that keep players from having any other options. This sort of operating behavior is illegal in nearly every other industry, because the source of labor then has no bargaining power.
2. Isn’t a scholarship fair compensation?
No. I say this as both a financial expert and an educator who places a high value on learning. Many universities earn more money from one nationally-televised basketball game than it costs to pay tuition for every player on the team for an entire year. I would personally rather see the players allowed to negotiate their own contracts and then pay their tuition afterward. If one were to offer a coach and his family free tuition rather than their seven figure salary, they would be outraged.
3. Which athletes should be paid anyway?
Athletes should be paid like the rest of us: If what you do earns money, then you have the right to negotiate (without oppressive restrictions) for your share. When Tom Cruise makes a film, he gets paid quite well. He doesn’t get the money because he’s a nice guy, he gets paid because he is generating revenue for someone else. That’s how capitalism works.
4. What are the possible solutions to this problem?
The IRS and Congress must get involved: The Ways and Means Committee of the House of Representatives began proceedings last year that questioned the nonprofit status of the NCAA and argued that they should not be considered an amateur organization. In their letter, it was stated that “Corporate sponsorships, multi-million dollar television deals, highly paid coaches with no academic duties, and the dedication of inordinate amounts of time by athletes to training lead many to believe that major college football and men’s basketball more closely resemble professional sports than amateur sports.”
I argue that challenging the NCAA’s financial situation might get their attention and inject some fairness into the system.