Student Athlete Compensation Will Not Impact Giving

December 10th, 2018 | by Dan Matheson
Student Athlete Compensation Will Not Impact Giving
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student athlete compensation
LEAD1 Association, which represents the interests of athletics directors at Football Bowl Subdivision schools, posts a regular video segment called “Byte of the Week” on its website in which Tom McMillen, LEAD1 President and CEO, discusses an issue of importance to his constituents. In one recent video, titled “Philanthropic Support for College Athletics,” Mr. McMillen expressed his concerns that the legal system may eventually open up greater opportunities for student-athlete compensation, which might lead to a reduction in donor giving to athletics programs. Mr. McMillen’s commentary is clearly inspired by the greatest current threat to the NCAA amateurism model, In Re: National Collegiate Athletic Association Grant-in-Aid Cap Antitrust Litigation, better known as the “Alston” lawsuit for one of the lead plaintiffs in the class-action case, Shawne Alston, former West Virginia University football student-athlete.

The Alston case went to trial in September, and a decision is expected soon.

With all due respect to Mr. McMillen, his concerns appear to be completely unfounded. Based on record levels of philanthropic support during the past 30 years of increasing professionalization in intercollegiate athletics, there is no evidence to suggest that athletics boosters will redirect their giving if the courts strike down the NCAA’s amateurism system and allow student-athlete compensation.

In evaluating the validity of Mr. McMillen’s concerns, one should consider how donors have responded to the professionals that already exist in college athletics departments – the coaches and administrators who are paid like their counterparts in pro sports.

Athletics boosters are clearly not deterred by pro-level compensation in the college ranks. Mr. McMillen points out in his video that college athletics departments raised $1.2 billion in donations in 2015. In that same year, two college football coaches were reportedly paid more than $7 million each. Michigan State University offers donors the opportunity to endow its head football or men’s basketball coaching positions for donations of $5 million each (for comparison, endowing a professor position at Duke University begins at $1.5 million). In August, Rice University announced an endowed gift for its head football coaching position. Athletics departments already target donors to help them pay enormous salaries to coaches who are represented by agents (which all sounds like the professionalization that Mr. McMillen fears), and Mr. McMillen offers no evidence to support the notion that boosters will suddenly withhold their support if student-athletes receive a paycheck along with their coaches and administrators.

Moreover, the industry has already tested Mr. McMillen’s theory on a limited basis in recent years with the changes in NCAA rules that have opened up payment of cost-of-attendance stipends to student-athletes. Student-athletes, such as Deion Hair-Griffin at the University of North Texas who reportedly received over $3,000 last year that he used to help pay for a car, can receive stipends to be used however they want. Texas A&M reportedly paid between $1.4-1.6 million in stipends to its student-athletes during the 2017-18 academic year. I suspect that most college athletics boosters do not realize (and would not care) that student-athlete compensation, through cost-of-attendance, has been happening since 2015.

The extra money provided to student-athletes has not discouraged philanthropic giving to athletics departments, and there is no reason to assume that a little more money going to student-athletes would change the situation.

In fact, allowing student-athlete compensation could spur even more donations. If boosters who want to support on-field success are already willing to donate to pay massive coaching salaries and finance construction of training facilities with lavish amenities designed to lure top recruits and prepare them for victory, would the same boosters have even more incentive to donate if they knew their money was needed to help secure a commitment from the top quarterback in the nation? Imagine a booster’s feeling of connection to the team and the success of the program if his donations could be tied even more directly to specific players on the field or court. It is just as reasonable to speculate on that possibility as it is for Mr. McMillen to speculate on the possibility that donations will decline if student-athletes receive salaries.

If the recent publication of this year’s top assistant coaching salary in college football ($2.5 million) is not enough to offend the sensibilities of college athletics boosters and cause them to direct their philanthropic efforts elsewhere, it is unreasonable to assume that student-athlete compensation would be the tipping point. Viewers of the LEAD1 Byte of the Week should consider all the evidence before accepting Mr. McMillen’s concerns as likely outcomes if NCAA amateurism is struck down in the courts.

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 NCAA associate director of enforcement and the New York Yankees baseball operations director. He serves on Iowa’s Presidential Committee on Athletics and is a dynamic keynote speaker and panelist who has received multiple teaching honors. https://danmatheson.wixsite.com/sportbusiness

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