I've never really thought these guys should get paid. Does anyone else feel strongly about this?

Pay College Athletes? They're Already Paid Up To $125,000 Per Year

Over the years there have been continuing, sporadic calls for college athletes to be paid in return for what they do to generate money for their colleges. These calls were loud this spring after the injury to Kevin Ware in the Midwest Regional Final of the NCAA Basketball Tournament. A number of commentators felt his sacrifice strengthened the case for paying college athletes. As the college football season kicks off this week (Go Dawgs!), the calls for student athletes to be paid will gain volume again. Below I hope to explain how college athletes are already compensated (even if not “paid”) and why changing the system would be incredibly difficult.

For what it is worth, I have some familiarity with these issues. I was a student athlete in college (although not on scholarship). I recently completed a three year term on my university’s athletic association board of directors, so I have examined all the financial statements at one of the most successful and best managed athletic departments in the country. Nothing here represents the opinion of my university or athletic association, but I have seen the system from the inside from many angles.

Some people are aware enough to realize that student athletes on athletic scholarship are essentially paid already because they receive free tuition, room, meal plans, and some money for books and miscellaneous expenses. At the bigger, more successful universities, athletes also receive academic counseling, tutoring, life skill training, and even nutritional advice. Certainly, not all student athletes are on scholarship and not all are on full scholarships but the student athletes in the revenue sports are receiving compensation in the form of educational benefits and living expenses. To an economist, this is “pay.”

Beyond that, however, what is commonly overlooked is that student athletes also receive free professional coaching, strength and fitness training, and support from athletic trainers and physical therapists (who kept me going back in my day). Football and basketball players pay $2,000-$3,000 per week for similar training in the weeks leading up to their pre-draft workouts. Using these valuations, and adding in the value of a scholarship, a student athlete at a major conference school on full scholarship is likely receiving a package of education, room, board, and coaching/training worth between $50,000 and $125,000 per year depending on their sport and whether they attend a public or private university.

On top of that, the best college athletes gain valuable publicity from playing college athletics. It is much easier for pro teams to evaluate their talent after watching their college careers and talking to college coaches they can trust for the inside story. This lowers the uncertainty about their future performance and means they get larger contracts when they go pro. This value only goes to the athletes at the very top, the ones who get a chance in the pros, but it is still something of value. To some students this publicity and help from coaches talking to pro teams likely carries a large economic value. I won’t try to quantify this, since it varies so much across athletes, but it could also be considered “pay.”

Now, having established that the athletes are not going uncompensated, let’s talk about why changing the system to include direct pay for athletes would be difficult.

Only two or three sports typically make money: football, men’s basketball, and women’s basketball. The remaining sports bring in little to no revenue while still costing the colleges money. Because of this, most athletic departments lose money. In fact, according to a USA Today story last month, only 23 out of 228 Division I athletic programs managed to run a surplus in 2012. The number of such departments fluctuates by year, but it is generally in that neighborhood or fewer.

Every university running a surplus is in a BCS automatic-qualifying conference. Every Division I college not in a non-major conference (and quite a few who are in a major conference) loses money on their athletics program as it stands now. Adding direct pay will put financial pressure on schools to drop non-revenue sports. Given that the colleges that lose money on athletics (and some who do not) subsidize their programs with money from regular student tuition, increasing pay to student athletes could mean tuition increases at many colleges.

If you ignore the reality that most colleges have no money with which to pay their student athletes, you have to address the issues that will arise once you start down that road. First, do you pay all student athletes equally? Is that equitable? Students in the non-revenue sports are already “paid” more than they are worth if the motivation for pay is that student athletes generate revenue for their colleges.

Paying the student athletes in non-revenue sports means using money generated by the revenue sports. In other words, using money generated by football and basketball players to pay everyone. This would be income redistribution among the student athletes. Perhaps pay could vary by sport. In that way, the student athletes in revenue sports could be paid more.

If you decide to only pay student athletes in revenue sports that still leads to its own equity issues. Do you pay all of those student athletes or only those that make an impact? After all, they are not all selling jerseys, selling tickets, and boosting television ratings. Would pay be allowed to vary with performance during a season or would it have to be set in advance? If pay varies with performance that puts an awful lot of pressure on student athletes that are still trying to grow up.

Should there be a cap on pay? Currently, the cap on pay is at zero. If payment begins and there is no cap, the bidding war among colleges for some players will be hard to control. Are people ready for the few colleges with the financial resources (which would be ten to twenty schools) getting virtually all the best football and basketball players? Are you okay with some college athletes being paid millions of dollars in hopes that they live up to the hype from a high school sports career? Given that the NCAA is not going to vote for a policy that guarantees most colleges will never again win a championship in football or basketball, I think it is safe to assume any adopted policy on pay will include a cap. If there is a cap, then the best players may still be “exploited” in the same sense that some people think they are being exploited now.

A final problem that would need to be addressed is does Title IX apply to pay for student athletes? If so, then it is impossible to only pay student athletes in revenue sports since that would involve about 100 male student athletes and only 15 women. If Title IX requires that pay for women’s athletes is on par with that for male athletes, then you must pay all student athletes. This will either increase the total expense or significantly lower the pay for each student athlete.

Once all these issues have been explored, it seems clear that providing additional payments to student athletes would be a very complex exercise. Significant problems of equity across students and across colleges need to be addressed. Then there is the whole issue of the financial viability of any such proposal given that over 90 percent of college athletic departments currently lose money.

Unless somebody can invent a pay plan for student athletes that solves all the above problems, you will just create new problems. There is no perfect way to address the issue of the worth of a college (or pro) athlete to a team. That is why pro teams routinely end up with athletes whose contracts are for much more than they now appear to be worth. In sports, a good guess of future performance is the best you can do. Since all but a few student athletes are receiving benefits worth more than any revenue they are generating for their schools, any change will mainly reward only a few select players and could potentially end up hurting the majority of student athletes whose sports rely on the money generated by the few revenue sports.

Colleges are already compensating their student athletes with tuition, room, board, coaching, nutritional support, and physical trainers that can exceed $100,000 per year in value. Student athletes are already paid and the current system is pretty close to as fair as we are going to get. Paying a few of them more will not improve college sports.

Good post above verb_to_trust, and I agree. It trips me out that many people forget these athletes are getting a scholarship worth a lot of money. Especially if they are on scholarship at a school like Georgetown, an Ivy League school, or private schools like Miami or Wake Forrest. If you do pay them, is it fair to pay a track runner, or tennis player as much as a star player on the football or basketball team? How do you figure out the pay scale? Very interesting bit about all the stuff besides a scholarship they get too, the things economist consider pay in the form of services like a nutrition consultant and personal career advisor.

Whatever policy is in place corruption, cheating, and people taking advantage of 18 year old kids will always happen. The idea that college athletes are not compensated is ludicrous. They make more money in scholarships and stipends than 90 percent of the student body.

I'm splitting this off into another topic since it transcends more than the football season. Here's a couple old threads that we had on the subject before:

http://archive.theskyiscrape.com/viewto ... =8&t=72385
http://archive.theskyiscrape.com/viewto ... =7&t=80001

I'll have more to contribute in a bit. I am generally in favor of paying the players something, but how much and how it's done is the tricky question.

I agree they should get something as well but its very tricky in how to disperse it..so many factors in the equation

Anyway, the problem with the "they already get compensated plenty" argument is that it's highly illiquid compensation. What they are provided can only be used for very specific purposes, and only if they follow very specific rules. The grand majority of it cannot be sold for liquid cash, and even the very little that can is placed on lockdown. (see: Terrelle Pryor) When you think about it, it's an awfully paternalistic way to treat the athletes. Especially for the poorer athletes, what they want/need more than anything else is cash.

MD also stated that black market activities will always take place no matter what policy is in place. To me, that only means that we need a legitimate way of monetary compensation more so. It's a lot like the War on Drugs in that regard.

So, I still stand by my solution that I stated in the older threads, but I'll also add a twist that I think is proper: if an athlete wants to make money off endorsements, go for it, but then the college should pull the athlete's scholarship. I see no reason why the taxpayers and donors should have to pay for someone's education when he or she is capable of doing so on his/her own.

Here's an article I read recently that offers more to digest:

http://sports.espn.go.com/ncaa/news/story?id=6735469

Pay-for-play -- the truth behind the myths
Originally Published: July 15, 2011
By Andy Schwarz | Special to ESPN.com

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.

Just pay them. End the central committee deciding maximum benefits. Let each school make its offers, and let incoming high school athletes and their parents decide which to accept. This is how salaries are set across the world. This is probably how your pay was set. Notre Dame doesn't need USC to tell it what it can or can't offer.

Different levels of pay on a team won't hurt cohesion either. It's not hurt in college baseball, where scholarships vary widely across players, or in professional sports, where superstars and league minimum athletes win Super Bowls and World Series together.

Myth 2: Title IX outlaws paying players.

Title IX does not require identical spending on men's and women's sports, but it is true that the letter of Title IX law requires that spending on women's sports closely track spending on men's. However, in practice this is simply does not happen. All 73 schools in BCS AQ conferences (including seven non-football schools) spend more on men's sports than on women's, and almost all of them provide disproportionate student aid to men over women. Title IX also considers coaching pay a form of athletic equity and yet all 73 major programs pay their men's teams' coaches more than their women's teams'. In practice, Title IX does not ensure that every dollar spent on men is matched by a dollar spent on women.

But if each new dollar of spending were required to go equally to men and women, the system would function like a payroll or sales tax. Pay a QB $50,000? Then pay $50,000 to women's programs, too. This would keep salaries down but not eliminate them, just as cigarette taxes don't eliminate cigarette sales. And it would be a boon to women's sports as well.

Myth 3: Pay will ruin competitive balance.

What competitive balance? When players are paid, some schools will offer less than others. Teams spending more will get better talent, just like they do today.

Today there are haves and have-nots. Haves recruit great players and consistently win. Have-nots get the leftovers and occasionally luck into hidden gems who gel as seniors and win. Over the last 10 years, more than 99 percent of the top 100 high school prospects chose BCS AQs. Alabama plays Kent State this September, but what top recruit would spurn an offer from Alabama to attend Kent? Ironically, letting have-nots use cash is the best way to overcome the current unlevel playing field.

The results on the field and court reflect this disparity in recruiting: Since 1985, 91 percent of all top 20 and top 25 football teams and 92 percent of all Final Four basketball teams have come from the six "have" conferences.

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

Students earn money all the time. James Franco was a paid actor while majoring in English at UCLA; other English majors were paid to work at the library. Northeastern's co-op Education program requires undergraduates to switch between the classroom and paying jobs, while remaining full-time students.

Forgoing pay does not turn football players into real college students. They are students for all of the non-football things they do: going to class, joining a study group, falling asleep in the library, etc. Ask your bursar's office if having a paying job disqualifies you for being a full-time student. It doesn't.

Myth 5: Paying athletes means that fans won't watch.

Yep, just like the Olympics or golf. The claim was that no one would watch professionals in these (and other) sports. Now we rank the world's best golfers based on tournament earnings. And we adored the 1992 professional Olympic Dream Team.

Which would you pick: great seats at the BCS championship game (but with paid athletes) or great seats at the D-III championship (with non-scholarship athletes)? Will Florida Gators fans switch their allegiance to the Central Florida Knights if the Gators paid players and the Knights didn't? Fat chance.

These are not the only myths out there. There's the one about how players get too much already, and any non-athlete would be thrilled to get such a deal. But the non-athletes are already getting a market rate, it's just the athletes who are not. There's the circular logic about how paying players violates NCAA rules; so just change the rule to let a school pay what it wants. There's the one about how no one forces kids to take scholarships, but a monopolist's take-it-or-leave-it offer isn't the same as the true competitive outcome.

Finally, there's the one about how schools are too poor to pay athletes. Then don't! End the nationwide monopoly; let each school offer what it wants without being forced to pay more or less by other schools. Poor schools won't pay more than they do now; richer ones will. But it will all work out. That's no myth.

Do you pay a football player the same as a women's tennis player who each put in equal time to practicing/training/traveling/performing?

Shouldn't they just be allowed to make money on the side? Fuck amateurism. let them make money off their name.

Sure, why not? That's what the NCAA was proposing to do with the $2000 stipend, anyway.

Still, I think the immediate attention needs to be paid to endorsements. That's something that the schools don't have control over.

I'm all for the stipends especially when it comes to the poor athlete/student..Family financial status should come into play when coming up with a number.

This is the main thing that needs to change. If you're in a videogame or the NCAA is selling your jersey, you need to be making money off that. Otherwise it just reeks of exploitation.

Something else to keep in mind is that, especially in this day and age of huge television contracts, the schools are making serious bunk off football and basketball, and yet the people the most responsible for those earnings don't get a monetary cut. And I don't really buy the argument that the schools lose money overall on the entire athletic department. If they wanted to, they could cut their programs to the bare minimum number of scholarships allowed to keep in compliance with Title IX.

This could really reach a loggerheads if the players win the Ed O'Bannon case. You've already started seeing a few players displaying the APU message. If they were to effectively create a player's union, that could really change the balance of power.

they get scholarships, room, board and books. pretty much the same as those who are there are academic scholarship.

the issue is those on academic scholarship can get paid to be a lab assistant, can work at an applebees or work at a radioshack. those who go there for athletics cannot do so.

as far as dividing up the pay to the student athlete. have a cap of some sort. say a school brings in 10 million a year from its sports programs (totaled) 1/2 for the players half for the school. so say you have 250 athletes on all your various teams. thats $2000 per athlete a year. that will be about $150 per student per month.

or something along those lines. some of the money these schools make is beyond ridiculous considering

how much does the school pay the girls that entertain the athletes fresh out of high school when they make that overnight campus visit? I've always wondered

Ok, let's day the $2,000 dollar a year stipend gets approved. Pretty soon everyone will be calling for 4,000, then more and more and more. It's such a slippery slope.

Clearly something needs to change. I agree that players should receive a cut when their likenesses are used. Athletes should also be allowed to work outside of the athletic obligations.

thats why i think a % will work better. that way if the college makes more off of sports, then the players get a bigger cut

nothing, they are part of the athletic department. They may have money for a party budget to take players out etc but a salary... I'm guessing nothing.

Tennessee got in to trouble a few years ago when their "hostesses" showed up at high school games.

That could potentially work. I could see that leading to some athletic departments deferring maintenance/operation costs on non-revenue sports to pay these revenue athletes. No matter how you slice it this thing is going to get really messy.

this thread reminds me of my college roommate that didnt have a pot to piss in...My parents would send me a package with food and whatnot and they would always send along a $10 roll of quarters for him to be able to do his laundry