“March Madness” involves a tournament of now 68 top college basketball teams. It culminates tomorrow night in the championship game between upstart Butler and perennial basketball power, the University of Connecticut. The National Collegiate Athletic Association's (NCAA) sanctioned basketball playoffs start in middle of March and attract a large audience in attendance, and additional millions who watch the games on television all over the world. Every year prior to this final tournament, and sometimes even during the tournament, different violations become public of NCAA rules on behavior of players and coaches. Violations of these rules by colleges are to be expected because the rules are basically an attempt by the NCAA to suppress competition among schools for college basketball and football players, the two most lucrative and most watched college sports, and thereby increase the profits to schools from these sports.
The toughest competition for basketball and football players occurs at the Division I level. These sports have both large attendances at games-sometimes, more than 100,000 persons attend college football games- and widespread television coverage. As a result, many Division I schools with big time sports programs get many millions of dollars from their basketball and football programs. Absent the rules enforced by the NCAA, the competition for players would stiffen, especially for the big stars, as they would receive large scholarships and various gifts of cars, housing, and cash to themselves and their families. Payment to players, if competition for players were allowed to operate freely, would severely eat into the profits made by colleges from the big time sports.
To avoid that outcome, the NCAA sharply limits the number of athletic scholarships, and even more importantly, limits the size of the scholarships that schools can offer the best players. NCAA rules also severely restricts the gifts and housing players are allowed to receive from alumni and others, do not allow college players to receive pay for playing for professional teams during summers or even before they attended college, and limits what they can be paid for non-playing summer work. The rules are extremely complicated, and they constitute hundreds of pages that lay out what is permitted in recruiting prospective students, when students have to make binding commitments to attend schools, the need to renew athletic scholarships, the assistance that can be provided to players’ parents, and of course the size of scholarships.
It is impossible for an outsider to look at these rules without concluding that their main aim is to make the NCAA an effective cartel that severely constrains competition among schools for players. The NCAA defends these rules by claiming that their main purpose is to prevent exploitation of student-athletes, to provide a more equitable system of recruitment that enables many colleges to maintain football and basketball programs and actively search for athletes, and to insure that the athletes become students as well as athletes.
Unfortunately for the NCAA, the facts are blatantly inconsistent with these defenses. Consider the recent widely publicized violation of NCAA rules by five Ohio State football players and their coach. The players’ “crime” was that they sold some of their football memorabilia, including signed autographs, for modest sums, and for tattoos. The coach’s “crime” was that he failed to report these violations in a timely fashion. All the players involved, which includes the star of the team, and the very respected coach, will have to miss the first 5 games of the 2011 season. This is almost half of the 12 games played during the regular season. Nothing done by the players involved stolen property or anything else that would violate any laws except those imposed on players by the NCAA.
A large fraction of the Division I players in basketball and football, the two big money sports, are recruited from poor families; many of them are African-Americans from inner cities and rural areas. 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.
That players are recruited as students as well as athletes applies to a considerable extent to Stanford, Duke, Notre Dame, and a few other Division I schools that have high academic standards. The NCAA points out that the overall average graduation rate is about the same for student-athletes as it is for other students. That result also applies to African American and Hispanic students. However, the graduation rates for these minority students-athletes are depressingly low. For example, the average graduation rate of Division I African American basketball and football players appears to be less than 50%.
Some of the top players quit school to play in the NBA or NFL, but that is a tiny fraction of all athletes who dropout. 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. Schools usually forget about athletes when they stop competing. An important further difference between athletes and non-athletes who dropout of school is that athletes would have been able to get much better financial support for themselves and their families but for the NCAA restrictions on compensation to athletes. They could have used these additional assets to help them finish school, or to get a better start if they dropped out.
In 1984 the U.S. Supreme Court declared the NCAA’s restrictions on the televising of college football games an illegal conspiracy in violation of the Sherman Antitrust Act. The court said, “good motives alone will not validate an otherwise anticompetitive practice”. Since that decision, the televising of college football and basketball games has rapidly increased. It is time for the court to apply the same valid reasoning to the restrictions on scholarships and other aspects of the competition by colleges for athletes, and to declare these restrictions also a violation of the Sherman Act. Were that done, both student-athletes and schools with greater concern for academic performance of their athletes would gain at the expense of colleges that put athletic competition before academic achievements.
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.
Posted by: Panil | 04/03/2011 at 07:15 PM
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.
Posted by: Luca | 04/04/2011 at 01:28 AM
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.
Posted by: Quentin | 04/04/2011 at 10:46 AM
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.
Posted by: Pepe Fenjul Jr. | 04/05/2011 at 05:13 AM
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Posted by: Christian Louboutin Pumps | 04/05/2011 at 07:40 AM
"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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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.
Posted by: Christopher Graves | 04/07/2011 at 06:52 PM
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.
Posted by: Bathroom Living | 04/08/2011 at 03:44 AM
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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Posted by: Office 2010 | 04/10/2011 at 10:10 PM
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.
Posted by: WebVisible | 04/11/2011 at 06:28 AM
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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Posted by: sylvia cleary | 04/19/2011 at 07:00 AM
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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Posted by: nike lunarglide+2 | 04/20/2011 at 11:23 AM
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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