Evaluating Both Sides of the Pay-for-Play Debate (Part 2)

April 26th, 2017 | by Dan Matheson
Evaluating Both Sides of the Pay-for-Play Debate (Part 2)


In the first installment of this two-part series, I broke down four arguments often made in opposition to the pay-for-play concept in college athletics. In this second part, I will switch sides to evaluate arguments frequently made in support of the position that student-athletes should receive more than just a scholarship and cost-of-attendance stipend.

Argument #1:  The student-athletes are the entertainers performing on the field.  They generate millions in athletics department revenue, and full-ride scholarships are no longer fair compensation for their services

This is the core of the pay-for-play argument – revenues, as well as coaching and administration salaries, have skyrocketed, but compensation for student-athletes has remained essentially unchanged.  No one can deny that men’s basketball and football student-athletes at many schools are performing valuable services.  The games they play sell tickets and merchandise, generate broadcasting revenue, help bring in donations from boosters, and help recruit new tuition-paying students to campus.  During the 2015 fiscal year, the largest reported athletics department revenue was more than $192 million, and the median revenue at the Football Bowl Subdivision (FBS) level was more than $63 million.

While it is fair to consider some football and men’s basketball student-athletes undercompensated based on the revenue they help generate, the majority of student-athletes who receive anything close to a full scholarship must be considered overcompensated.  Most sports generate little or no revenue and require significant investment to fund benefits such as travel, coaching salaries, facilities, equipment, tutoring services, and other expenses.  With an occasional exception, all other sports lose money.  As I outlined in the first part of this series, the value of a full scholarship exceeds $70,000 annually at some schools.  In 2016, the University of Iowa spent about $12.6 million on student-athlete scholarships. All NCAA schools combined provide financial aid of more than $2.9 billion to more than 150,000 students annually.

From a purely economic standpoint, the current system rewards many who are undeserving of compensation based on their financial input to the system but fails to adequately reward the few who financially contribute the most to the system.  Instituting a pay-for-play model might lead to elite revenue-sport athletes receiving more, but it also might lead to a significant reduction in the financial and academic benefits for athletes in some non-revenue sports.  As I explained in the first part of this series, depending on what form a pay-for-play model would take, I believe there would be more cutting of non-revenue sport teams as athletics departments invested more heavily in football and men’s basketball.  The non-discrimination requirements of Title IX would help guard against some of this – I would be surprised if schools could get away with paying football and men’s basketball student-athletes without equally compensating women student-athletes.  

When evaluating the fairness of the current system that limits compensation to student-athletes who contribute to significant university revenues, one should consider whether there are comparable non-athlete examples.  Research assistants, for instance.  Undergraduate research assistants at George Mason University, for example, can work for $10 per hour on faculty research projects.  Some of those research projects will probably create content for published books that generate significant revenue.  Student research assistants at universities work on projects that produce revenue-generating books, lucrative research grants, and discoveries that are patented and licensed.  Columbia University brought in $790 million from a patent on inserting foreign DNA into cells, and New York University has generated more than $1 billion from patents that led to a drug that treats autoimmune diseases.  Student research assistants who contribute to discoveries such as these do not engage in the sort of profit sharing that many pay-for-play advocates believe student-athletes deserve.  Research assistants typically earn an hourly wage that is not based on how much revenue a project generates.

The strength of this first argument ultimately depends on whether one believes college athletics should focus on providing more compensation to a relatively small number of highly profitable student-athletes or spreading out the benefits of education and financial support to many, including those who contribute little or no money to the big business of college athletics.

Argument #2:  Student-athletes spend as much or more time on athletics activities than their non-athlete peers spend working at jobs   

In an NCAA study released in 2016, it was determined that the median time spent on athletics by Division I student-athletes was 34 hours per week.  Not surprisingly, FBS football student-athletes were at the top, with median time spent on their sport being 42 hours per week.  The same study also found that the time student-athletes spent on academics was increasing, and time spent socializing, relaxing, and sleeping was decreasing.  While NCAA rules have recently changed in an effort to reduce sport time demands on student-athletes, time spent on activities related to being an athlete are still as much or more than a half-time job.

The strength of this argument, similar to Argument #1 above, comes down to whether one believes student-athletes are receiving enough in return for their significant time commitment.  In the case of elite football and men’s basketball student-athletes whose time commitment, athletic performance, and personal brand contribute to significant athletics department revenues, it is easy to argue that they deserve more than a scholarship and cost-of-attendance stipend.  For a women’s rowing student-athlete who does not generate revenue and may have $50,000 of annual college expenses paid for by a scholarship while also receiving coaching, travel, equipment, etc., it is easy to argue she is overcompensated for her 30-hour-per-week commitment.  The NCAA model is set up to provide scholarship benefits to as many student-athletes as possible rather than allocating revenue based purely on economic benefits provided to the university by the athlete.  

Argument #3:  Additional compensation would encourage student-athletes to stay in school longer before turning pro

A pay-for-play system could serve as an incentive for many athletes to stay in school rather than turning pro early.  Projected high draft picks will usually choose the pros rather than risk another year at the college level potentially damaging their draft status, but the majority of athletes are not at that level.  For them, additional compensation while playing in college would make it easier to justify putting off a decision to turn pro, depending on the type of pay-for-play system developed and the amount of compensation available.

Final Analysis

In this two-part series, I considered several arguments on both sides of the pay-for-play debate.  Under scrutiny, some points frequently made by each side are difficult to defend, some are undeniably valid, and some depend on individual values and what one wants college athletics to provide to participants.  This exercise was, as I explained at the outset, partly motivated by arguments made by prominent university presidents and athletics directors recently interviewed during ongoing litigation over student-athlete compensation.  I anticipate more legal challenges to the NCAA amateurism rules and the system of student-athlete compensation – the lead attorney in the O’Bannon v. NCAA lawsuit recently indicated that his firm is considering more lawsuits against the NCAA with new plaintiffs.  I believe some of the traditional arguments against a pay-for-play system that college officials consistently rely on either need to be strengthened or de-emphasized if the NCAA, schools, and conferences hope to hold off those who seek to reform the college athletics compensation system.

Dan Matheson About Dan Matheson
Dan Matheson, J.D., is director of the University of Iowa Sport & Recreation Management program. Prior to joining the Iowa faculty, Matheson was an associate director of enforcement for the NCAA and the baseball operations director for the New York Yankees. He currently serves on Iowa’s Presidential Committee on Athletics and is a dynamic keynote speaker and panelist who has received multiple teaching honors at Iowa. https://danmatheson.wixsite.com/sportbusiness

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