Beechert: Properly Paying Players

by Michael Beechert | 8/11/14 4:12pm

The NCAA, which has long thrived on the rather unique business model of not paying those responsible for earning it money, has been dealt a severe blow. Recently, in the antitrust class action lawsuit O’Bannon v. NCAA, U.S. District Court Judge Claudia Wilken ruled that the organization’s refusal to compensate athletes in the revenue sports (men’s basketball and football) is legally untenable. Universities may, under Wilken’s decision, establish trust funds for such athletes which are capped at $5,000 per year. Such a low potential ceiling for athletes’ compensation was surely not enthusiastically received by the plaintiffs. However, the O’Bannon decision as a whole is undoubtedly a victory for athletes in revenue sports and a loss for the NCAA. Although it may be years before athletes are actually compensated, the outcome of this long-running case sets a precedent that the NCAA has feared for some time — at some point, it must split the pie with the very people who baked it.

For decades, the NCAA has claimed to exemplify the beauty of amateurism. There was something pure about watching amateurs compete against each other — or so the NCAA told us. Removed from the seductive allure of money, young athletes would only play for the love of the game. Collegiate athletics represented how sports were supposed to be played. Perhaps this narrative would be more believable if the NCAA itself was not making hundreds of millions of dollars each year from the efforts of these so-called amateurs.

To be fair, the vast majority of athletes overseen by the NCAA do not produce any revenue for either their schools or the organization; virtually every dollar the NCAA makes comes from men’s football and basketball. The organization reports that the latter sport by itself accounts for approximately 90 percent of the NCAA’s total revenue with the television proceeds from its annual March Madness championship. But since basketball players are technically amateurs, as decreed by the NCAA, they receive none of this revenue.

Wilken, who may have realized that there is irreconcilable tension between such massive earnings and claims of amateurism, wisely told the NCAA that the party was over. It could not continue to treat athletes in revenue sports as amateurs and not compensate them. While the athletes who would receive stipends are generally stars already on full scholarships, Wilken understood that scholarships alone cannot cover many living and auxiliary expenses that athletes incur over their careers. It was patently unfair that universities were barred from alleviating those expenses when athletes were earning so much money for their schools.

Athletes who play in non-revenue sports, meanwhile, have no claim to monetary compensation for their services because they do not earn anyone any money. This is a logical consequence that currently provides no allowances for women’s sports. The NCAA tried and failed to exploit this implication by mounting a Title IX non-revenue defense. Wilken’s ruling nevertheless leaves female athletes in a position that could be interpreted as violating the law’s guarantee of equality in university athletics. However, the decision is fair even under Title IX; women’s basketball is not nearly as popular as men’s, and other female sports barely register on the public consciousness.

Those decrying the ruling as the death of everything good about college athletics miss the point. College athletics at the revenue level have essentially been serving as a collection of quasi-professional leagues for years. Apart from the gap in respective talent levels and differences in format, the only major difference between the NBA Finals and March Madness is that players in the latter competition are not compensated for their participation. Gone are the days when Kentucky versus Kansas was a local affair carried out by regular students playing for nothing more than the love of the game. Big-time college sports has turned into a moneyed spectacle. While those criticizing such a spectacle may be justified in doing so, withholding compensation from athletes accomplishes nothing but the perpetration of a myth that died long ago.