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04/03/2011

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Panil

So the obvious question, which is not mentioned, is: How does the monopsony maintain its “mono” status?

In other words, what prevents another College Athletics Association with paid athletes from forming, thus creating a di-psony tri-psony etc? A new association may not have that much clout immediately, however the pay would quickly attract athletes who would rather be a little less famous but quite a bit wealthier.

Something else, some other direct or indirect regulation, must be at work enabling the NCAA to maintain its monopsony status long term.

Luca

Actually, the NCAA is not technically a monopsony (at least not in all sports). Consider basketball. True, the prep-to-pro rule that the NBA introduced in 2006 prevents players from being eligible for the draft unless they are 19 or older and at least one year removed from high school. But that does not prevent high school players from joining other professional leagues as opposed to attending college. It is not a common choice, but it is also not unheard of. Brandon Jennings recently made the headlines for being the first American player to skip college to play professional basketball for a year before declaring for the NBA draft. Jennings played for a year in Italy, and was then selected 10th overall in the 2009 draft. He reportedly earned more than 3 million dollars (including sponsorships) during the year he spent abroad. While nobody has followed suit yet, there are reasons to believe that Jennings will not be that last of his kind. A big reason why top basketball prospects choose to play in college is that they can more easily showcase to scouts, which will hopefully lead to a higher call in the draft, and a better rookie contract. However, the NBA has been recently pushing its boundaries to increase its international audience. For the first time this year, two teams (the Toronto Raptors and the New Jersey Nets) played two regular season games in London. According to some sources, up to 6 of the lottery picks in next year’s draft might be international players. There are even talks to add European teams to the league (although no concrete schedule has been laid out). This means that the opportunity cost of playing abroad will keep decreasing over the next decade. Will more high school prospects follow Jennings’ example? I would bet yes, they will. Eventually, this might lead to a decrease in the quality of college games, and could even be enough to force the NCAA to reconsider its rules.

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Quentin

The Olympics finally gave up on outdated Victorian notions of "amateurism" in athletics; it's time the NCAA did the same. The teams don't even have to pay the players; just allow athletes to profit from their athletic talents. This would legalize the behavior of the Ohio State players mentioned above, or players who take advances from agents, or allow college golf players who have finished "in the money" in the U.S. Open to actually collect their winnings, among many other examples.

The real problem here is that college basketball and football are the de facto "farm systems" for their respective professional sports in the U.S. My hope is that changing the rules would allow for the creation of semi-professional summer leagues which would allow athletes to earn some money, and could over time create a parallel farm system that could exist in parallel with the college athletics system, much as exists in baseball.

Pepe Fenjul Jr.

Every restriction on the size of scholarships that can be given to athletes in these sports usually takes money away from poor athletes and their families, and in effect transfers these resources to richer students in the form of lower tuition and cheaper tickets for games.

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Jim

"Higher education" is, pure and simple a big business. its customers are students and families willing to buy a increasingly useless product for very high prices. One of its product lines is athletics. No one should be surprised at the corporate shenanigans. After all, the NCAA is a trade organization. I did get a big kick out of Joseph Epstein's recent piece in a weekly which was titled "Lower Education; Northwestern University's recent after school sex show".

Isn't there something about power corrupting?

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Christopher Graves

There are a number of problems that this issue raises that are not addressed in this week's discussion of college sports. First, people are fanatically committed to their teams whether they are college or professional. While enthusiasm for one's team is fine, the kind of obsession many feel for their team points to an underlying problem in a free, commercial society, and that is life in a liberal (in the broad sense of the word) society is boring. Too much peace and prosperity and individualism breaks up the "us against them" ethos (in fact, consider the etymology of the word 'ethos') that re-emerges in a superficial way in team sports. Additionally, free market capitalism has overblown the concept of a positive-sum game. What we miss is the drama of conflict of a zero-sum game, and that is what sports provides us with. Modern life is sterile and flat as average utility has increased and stabilized as marginal utility has fallen. Sports also meets the need that people have to form groups and dominate people of other groups as they seek status at others' expense. In fact, status is always a zero-sum game. While sports provides a relatively harmless outlet for these communal, competitive desires that is innate in humans, it also trivializes these pursuits.

There was a weight and intensity to conflicts that had more pressing consequences. Life was more heroic and mytho-poetic under a regime that was not so scientific, inclusive, efficient, and technocratic. Real conflicts also harnessed elites in service of maintaining and cultivating the culture. Without the press of real conflict, elites have gravitated to the paradoxical niche of preserving their standing by attacking the dominant culture and embracing attempts to equalize and homogenize people.

Another issue that was glossed over in this discussion is amateurism. While amateur athletics might very well fail to foster as high a quality of athletic performance as would specialization, something is lost in professionalization of sports. Adam Smith realized that specialization can make for an imbalance in a person's character and range of ability. This is especially true for sports. As a physically talented individual focuses his time and energy on athletic training, these efforts take away from his development in other areas of endeavor. The prominence of professional athletes also serves as an exemplar for others to pursue this sort of imbalance. Assumptions of economic theory can mask these issues along with a sole focus on economics that exemplifies exactly what I am referring to here as well as what I have identified as a problem in higher education, and that is over-specialization in one's subject matter as opposed to a broader-based liberal education.

Furthermore, the focus on winning and athletic performance mitigates the genuine strengths of sports such as sportsmanship, honor, developing healthy habits, and teamwork. There are an increasing number of examples of what I am touching on here since college athletics has become, in effect, more professionalized.

The "way of the amateur," as John Gielgud's character in *Chariots of Fire* put it, should not be dismissed too easily.

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This is especially true for sports. As a physically talented individual focuses his time and energy on athletic training, these efforts take away from his development in other areas of endeavor.

Jack

Chris: Great! You make some very good points on this one! I'm not opposed to professional sports as a career and what they bring to sports fans.

You do well at pointing up the difference of the golfing "duffer" or local 10K runner trying to stay fit or do his personal best and that of those hoping too or being Pro.

I guess the confusion at college level is that of sports, including recreational running, biking, etc being healthy activities for K-12 and intramural sports being good for learning to compete, developing sportsmanship etc., then at college where TV has turned the amateur extension to a half commercial prospect in which the amateur efforts of the players are exploited for profit.

Then do we let the whole genie out of the bottle with pay for play, a competitive environment beyond the maturity of college students? that most likely would create a complete focus on the sport to the disadvantage of the education sought? Temptations to resort to steroids? With college sports already being the path to the pros it is, I suppose the genie is well out of the bottle anyway.

Good comments!

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People are fanatically committed to their teams whether they are college or professional. While enthusiasm for one's team is fine, the kind of obsession many feel for their team points to an underlying problem in a free, commercial society, and that is life in a liberal (in the broad sense of the word) society is boring.

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I think college athletes deserve a stipend, because they bring in millions of dollars to the university but have little to show for it unless they're drafted to the pros.

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The vast majority dropout either because they use up their sports eligibility before they completed the required number of classes, or they failed to continue to make the teams.

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Excellent. The NCAA also provides low-cost farm leagues for Basketball and Football (and baseball to a much lesser extent since it already has a well-developed farm league). This increases the profitability for the NFL and NBA.

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Both posts on the subject and all of the comments fail to mention the real reason the NCAA's current set-up is maintained -- TAX LAW.

College are non-profit organizations and are thus tax exempt on any income derived in the pursuit of its mission, namely the education of students. Income derived elsewhere, such as through the sales of merchandise, are taxed. NCAA member institutions avoid millions of dollars in annual taxes by declaring that athletics is part of the educational experience the institutions provide to student-athletes.

Tax law determines, then, that student-athletes may not receive anything in compensation that the university doesn't also provide to other students. So scholarships covering tuition and board are ok, as are money for books, meal plans, tutoring help, and the like. But if they receive anything above that, then that must be for their athletic prowess, i.e. they are being paid to provide services to the university and the athletic experience is NOT educational in nature and thus the university must pay taxes on its athletics-derived income and the student must pay taxes on the compensation (s)he receives.

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