Wage Madness: Can and Should the NCAA Pay Student-Athletes?

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Congratulations to the Duke NCAA basketball team and Coach K for their recent NCAA Tournament victory. Also, congratulations to the NCAA for receiving billions of dollars from television companies for airing the games through 2024. NCAA coaches also receive a significant amount of money. While Duke does not have to say how much it pays Coach K, according to his tax records, he earned $9.7 million in 2011 (a year when Duke did not win the national title).

So the NCAA and its coaches receive a financial windfall from the performance of their athletes. What financial compensation do the players get for their hard work? The correct answer is “not much.”

While the NCAA often argues it provides the athletes with a free education, athletes typically respond by explaining that they do not have time to study, or even have the same opportunities to take the classes they want. And according to Shabaaz Napier (who won the national championship twice), athletes “do have hungry nights that we don’t have enough money to get food in.”

The NCAA Bans Athletes from Getting Paid

The NCAA bans athletes from receiving compensation for their services because they are supposedly amateurs and students first. As part of the athletes’ agreement to play in the NCAA, the players and the universities must abide by the NCAA’s strict rules. When athletes have tried to receive money, even if it’s for just signing merchandise, the NCAA has cracked down pretty hard. It can – and has – suspended players and universities.

The NCAA’s hypocritical stance is highlighted by its investigation of Texas A&M alum Johnny Manziel. During the NCAA’s investigation to determine whether Manziel was signing autographs for money, Jay Bilas pointed out that the NCAA was actually selling Manziel’s jersey for profit on its website. It was somehow okay for the NCAA to make a profit from his jersey, but it was not okay for Manziel to make a profit for selling his autograph.

At least two different lawsuits have questioned the NCAA’s logic that it does not have to pay its athletes. In the O’Bannon Class Action lawsuit, a class of former athletes argued that the NCAA has violated numerous antitrust laws that are supposed to protect economic competition. In the second lawsuit, Northwestern student athletes argued that they were employees who deserved wages for their hard work.

Ed O’Bannon Class Action

Even after athletes leave college, the NCAA continues to sell the athletes’ images and likeness for profit without paying them. Ed O’Bannon, a former UCLA player, filed a class action lawsuit on behalf of former NCAA athletes after he noticed that the NCAA used his image in a video game. Even though O’Bannon was no longer in college, the NCAA continued to make money off of his image.

He argued that the NCAA violated antitrust laws. The NCAA is the only true “buyer” or market for services that O’Bannon wants to provide. Since there is not a viable alternative to playing Division 1 basketball or football that provides the combination of academics and elite competition, the NCAA can fix the price it offers to the athletes. It can dictate what the athletes have to accept, because the athletes can’t reasonably seek another market.

The NCAA then uses its power to pay every athlete the same price for participating in the NCAA: an opportunity to play in the NCAA, and in exchange, the NCAA can sell the athletes’ image for profit. When individual colleges attempt to offer money to an athlete, the NCAA will subject the college to severe sanctions.

Even if the argument that athletes should not make money while in college is persuasive to some, it is unclear why the NCAA should be allowed to exploit these same athletes for profit once the athletes leave college.

Judge Claudia Wilken agreed with O’Bannon and found that the NCAA violated antitrust laws. She determined that if it wasn’t for the NCAA’s price fixing agreement, colleges would pay their athletes in some form in addition to scholarship money.

She also rejected the NCAA’s position that the athletes’ scholarships are sufficient compensation. While relying on a recent decision by an appellate court in Chicago, she explained that athletes and colleges enter into commercial transactions. The athletes receive a scholarship, and the NCAA receives an opportunity to sell the athletes’ images for a lot of money. Due to the commercial nature of this transaction, coupled with the lack of any viable alternatives, athletes should have the opportunity to receive additional compensation. Even if athletes receive an education and scholarship, that does not justify preventing the athletes from reaping some of the financial profits the NCAA receives for selling their images. The NCAA appealed her decision, and is awaiting a decision by an appellate court.

Northwestern Students

A group of athletes from Northwestern University successfully argued before the National Labor Relations Board that they were employees, which would allow them to form a union. Similar to employees, the athletes provide a substantial amount of services for which colleges and the NCAA financially benefit.

During the school year, the athletes rigorously train and prepare so that they can compete at games across the nation. While some receive a scholarship for college, the athletes do not have much time to spend studying. Stanford alum, and current NFL player, Richard Sherman explained in an interview the difficulties that athletes face when it comes to academics:

I would love for a regular student to have a student-athlete’s schedule during the season for just one quarter or one semester and show me how you’ll balance that. Show me how you would schedule your classes when you can’t schedule classes from 2 to 6 o’clock on any given day. . . . When you’re a student-athlete you don’t have that kind of time.

In reality, the position that athletes receive a higher education that is not otherwise available to them is a fallacy:

  • Athletes can’t sign up for the majors or classes they want due to their difficult training schedules.
  • They aren’t able to study or focus on classes like other students.
  • They can’t take part-time jobs, and so many college athletes live right near the poverty line.
  • If an athlete is injured and unable to keep competing, the NCAA can take away the athlete’s scholarship, potentially leaving the individual with massive health care bills.

Ultimately, it is hard to distinguish a student athlete from another employee. In most situations, athletes work more than 40 hours a week training and competing, but receive little financial benefit. In exchange, the NCAA receives a substantial amount of money every year.