One Way College Athletes Are Worse Off Than “Others”

June 12th, 2018 | by Historical Basketball League
One Way College Athletes Are Worse Off Than “Others”
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college athletes

Last week, we looked at Ten Reasons Scholarship Athletes Are Better Off Financially Than Others. The article claims that college athletes are better off than “others” because “others” get paid less to do less work than the athletes do. We laid out a proposition that the entire framework was wrong because the measure of whether someone is being treated fairly is not whether they receive more than someone else, but whether they receive their market value.

This week we’re going to formalize that concept with reference to “The Economics of Imperfect Competition,” by Joan Robinson and then explain why we think the exploitation of college athletes springs from our societal willingness to mentally categorize athletes them as less-than-full citizens, and thus undeserving of the right of market value we grant to people we view as possessing full adult personhood. Ready?

In “The Economics of Imperfect Competition,” Robinson explained that:“a group of workers are being exploited when their wage is less than the marginal physical product that they are producing, valued at the price at which it is being sold”

To say this in more accessible language – if you were to compare the value of a business’s output with you and without you, and you are earning less than the difference, you’re being exploited. If the gap is small, the exploitation is less than if the gap is big, but the standard has nothing to do with what they guy working next to you earns, it’s just your contribution “on the margin” (that’s what we economists mean by “marginal”) to the value of the firm.

And so that’s why we would expect a college athlete to get more than “others” in a market that isn’t exploitative, because the revenue generation of a school with or without one more B-average biology student is probably about the same, but the value of the school without one future NBA first rounder is probably a lot less than with one. And if the school can boost its revenue by more than the true cost of a scholarship, then the athlete is being exploited in a rigorous economic sense.

That’s also why LeBron James is being exploited. Despite earning more than almost anyone reading this article, he is probably also being exploited more than any of us. King James is worth far, far more than he earns from the NBA and we probably aren’t worth all that much more than what we’re paid.

However, unlike the generic college athlete, James’s exploitation is part of the give-and-take of a union negotiation, in which he has a voice (he is the First Vice President of the Executive Committee of the NBPA). For college athletes, the story is quite different. They have no say in the level of compensation, and they are actively denied a competitive market because 351 Division I schools have all agreed not to compete beyond a maximum price for their services.

In this, the most important economic measure, college athletes are far worse off than “other” students. Regular students may be worth less to schools, but they have a competitive market that lets them earn every penny of their worth. Schools do not collude to cap their offers to non-athletes. When this was tried by Ivy League Schools in the 1980s and early 1990s, the federal government made them stop. When the courts agreed recently that capping athlete scholarships was price fixing, they did not make schools stop, instead ,they told them to just be slightly more reasonable. The exploitation remains, it’s just a little less bad.

Let’s cut through all of this miasma of jealousy and ask this question: if a college wanted to pay an athlete, say, $5,000 more per year in a deferred trust fund along the lines suggested by Judge Wilken in the O’Bannon case, would that change the value of any of the 10 items listed by in Ten Reasons Scholarship Athletes Are Better Off Financially Than Others? Would the good taste less good? Would the bus rides be less fun? Would a future in professional coaching be less obtainable? This is the problem with all of the claims (except the tax one, where everyone is treated the same today) which is that if you add $5,000 or $15,000 or whatever, the college athletes’ other benefits don’t change. And as Joan Robinson explained, that is the measure of exploitation – whether each one of us gets what each of us is worth, not whether we get more or less than “others.”

Consider the different treatment between Ivy League academic competition –where the Department of Justice went to bat to ensure Ivy League students had their full rights – with the lack of full competition for D1 athletes, and you’ll see a deeper problem. I am not sure we are treating athletes under the same full-adult treatment we offered the Ivy Leaguers. It’s hard to quantify how much less of a person the current system considers athletes, but it’s probably more than 3/5 and less than 5/5.

Essentially, what the author is asking us to do is to suspend the adult standard of “we’re worth what the market, if free of collusion, will pay us” and to adopt the more paternalistic “be happy it’s not worse for you” standard where “isn’t it enough?” replaces “did you earn your full free-market worth?” as the test. But the standard where anything more than “enough” is above what’s required is one we reserve for recipients of charity, for children, and for chattel. We don’t criticize an equestrian makes sure her horse gets enough oats and such. The horse gets enough. The horse’s owner, when she is treated without exploitation, is allowed to earn all she can in a market free of collusion. Barb and Bob both deserve to earn their market worth.

The whole framework is wrong because it implicitly puts college athletes in the category we reserve for racehorses, saying that some horses have it much worse while these horses get oats, are well cared for, etc. Until he’s willing to test college athletes against a valid benchmark, then everything else he says about how good athletes have it is just so much justification of a system that exploits college athletes and would prefer to keep doing it.

Does this implicit two-track system appall you? Are you willing to suspend your own jealousy if someone else gets more than you long enough to ask “ok, but is he/she getting what he/she is worth?” If so, you might be a future fan of the Historical Basketball League. The HBL is a new way of thinking about college sports, or rather, it’s just a very old way of doing it. Prior to 1956, there were no national enforced amateurism rules; each conference made its own rules, with some allowing athletes to be employees, and others refusing to give even a scholarship.

The HBL wants to go back to those days and to say to athletes – yes, you are worth more than an average student so of course, you should earn more, but that’s not enough. You don’t have to give up your rights to gain the benefits of an education.

In future articles, the HBL executive team will be in this space to comment on the college sports industrial complex and to provide a pro-athlete, anti-amateurism perspective. We think what makes college sports great is (a) college and (b) sports. There’s no reason to be anything but professional about it.

Historical Basketball League About Historical Basketball League
The Historical Basketball League is the first national basketball league for college students that will substantially compensate college athletes based on their athletic ability beyond just a college education. The HBL is founded on a simple idea: college sports are popular because they are sports played by college students, and that NCAA-style amateurism is a means of excluding athletes from the financial benefits of the league, rather than as a benefit to fans or athletes. The HBL will provide salaries and 5-year guaranteed scholarships to its athletes, who will also have the opportunity to have an agent and sign endorsement agreements while still in college. The HBL’s inaugural season will be in 2019 or 2020. To maximize the educational benefits of attending college as an athlete, the HBL’s season will take place during the summer, with our opening tip off on June 19 and our championship tournament taking place over Labor Day weekend each year.

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