NCAA: Is It Time to Pay to Play?

A new California law challenges long-standing policy regarding student athletes.

Robin Smith · Oct. 7, 2019

The National Collegiate Athletic Association (NCAA) reported more than $1 billion in revenue in 2018. The NCAA is also a nonprofit organization. Okay, stop laughing.

The role of the NCAA is to regulate student athletes from 1,268 North American institutions and conferences, says Wikipedia, and to organize athletic programs of colleges and universities. Over 82% of the NCAA’s $1.06 billion came from the Division I Men’s Basketball Tournament.

Remember, this type of revenue is generated for a nonprofit from the commercialization of the play, competition, use of names, likenesses, images, and video of student athletes — athletes who are regulated more stringently than the average student on any campus. Massive profits, however, are going to other entities despite strict limits on the benefit to the actual athlete.

Yes, indeed, scholarships and the provision of housing, food, and other academic benefits are truly of value for the men and women engaged in competition on behalf of their respective colleges and universities. The idea of intercollegiate competition is indeed about sport and not about employers paying employees. But come on. A nonprofit making over a billion dollars while universities and colleges have similar financial benefits from the use of players’ images in lucrative video games, ads to promote gear and brands is an arrangement that can be reformed to offer a greater benefit to those who make it possible — the student athlete.

Just one contract shows the scale of wealth generated by these student athletes. The initial contract covering the broadcast rights from 2010 through 2024 between the NCAA and CBS and TNT permitting the broadcast of the highly engaging March Madness tournament was $10.8 billion. A contract extension on top of that to push the dates out to 2032 added an additional $8.8 billion. So, in one contract, the NCAA has a guarantee of $19.6 billion by just permitting networks to put games on TV and online.

Pretty clearly, more funding needs to get into the hands of the student athletes. Because the enterprise of college sports is big business, there have been attempts to do this under the table, on the edge of the rules or whatever justifying label through schemes of payment. Yet the NCAA has held firm to the demand, noted on page four of its own handbook, citing the Principle of Amateurism: “Student athletes shall be amateurs … [and] their participation should be motivated primarily by education and by the physical, mental, and social benefits to be derived.” Yeah, just like the NCAA is motivated by the altruism of its nonprofit status, right?

But how can more benefit get into the hands of these athletes — many from poor, broken homes — that will benefit most from educational attainment and the earned scholarships?

California has passed a law that may change everything about college sports. On Jan. 1, 2023, the Golden State’s colleges and universities will be prohibited from observing “any rule, requirement, standard, or other limitation that prevents a student of that institution from participating in intercollegiate athletics from earning compensation as a result of the use of the student’s name, image or likeness.” Simply, the student athletes can be paid through royalties, appearances in advertising or other means outside of compensation from the school. His or her off-campus earning abilities, just like any other student, will not be limited, changing the current setup with the only beneficiaries of the institution or the NCAA.

This Fair Pay to Play Act may very well be the first of many legislative moves to return the financial benefit to the students and end the web of activity meant to circumvent the NCAA caps and prohibitions like that which ensnared several in a major FBI investigation that destroyed the pretense of virtuous amateurism in the arena of collegiate competition.

Recall the NCAA basketball scandal involving four assistant coaches just over two years ago. Fraud and corruption charges were leveled against Arizona’s Emanuel “Book” Richardson, Auburn’s Chuck Person, Oklahoma State’s Lamont Evans, and USC’s Tony Bland. Another dozen folks were charged, including the global marketing director for Adidas, James Gatto, for essentially using bribe money, coaches who pressured athletes into certain programs, and arrangements with various apparel representation agreements.

If we take this outside the realm of sports, think of this as an economic system. College sports is an economy. It involves a product that meets a desire based on demand. Those involved in providing that product to customers willing to pay billions annually to enjoy the viewing and spectacle of sport are the host schools and programs, the networks, the student athletes, the coaching staff, all the supply-chain jobs that result from the play and promotion of said events. It’s only the student athlete who is eliminated from the benefits of this economy with the exception of a paid scholarship, while every other engaged entity enjoys the benefits of major profits.

Is it time to pay for play? Colleges and universities must be vigilant in observing and enforcing fixed eligibility requirements and standards to maintain the priority of education. Yet how many students do we know who have worked during their college careers at any number of jobs, even through corporately sponsored internships where the business employees the student for a set number of hours to have a wage paid via a stipend in addition to scholarship funding?

The discussion will continue. The NCAA will fight the California law in court. Let’s look at this issue honestly.

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