The college sports industry generates $11 billion in annual revenues. Fifty colleges report annual revenues that exceed $50 million. Meanwhile, five colleges report annual revenues that exceed $100 million. These revenues come from numerous sources, including ticket sales, sponsorship rights, and the sale of broadcast rights. The National Collegiate Athletic Association recently sold broadcast rights to its annual men's basketball tournament for upwards of $770 million per season. And the Big Ten Conference has launched its own television network that sells air time to sponsors during the broadcast of its football and men's basketball games.
These college sports revenues are passed along to NCAA executives, athletic directors and coaches in the form of salaries. In 2011, NCAA members paid their association president, Mark Emmert, $1.7 million. Head football coaches at the 44 NCAA Bowl Championship Series schools received on average $2.1 million in salaries. The highest paid public employee in 40 of the 50 U.S. states is the state university's head football or basketball coach. At the University of Alabama, the head football coach, Nick Saban, recently signed a contract paying him $7 million per year – more than 160 times the average wage of a Tuscaloosa public school teacher.
Nevertheless, the NCAA member colleges continue to vote to forbid the sharing of revenues with student-athletes. Instead, they hide behind a "veil of amateurism" that maintains the wealth of college sports in the hands of a select few administrators, athletic directors and coaches. This "veil" not only ensures great wealth for athletic directors and coaches, but it also ensures sustained poverty for many of the athletes who provide their labor. A 2011 report entitled "The Price of Poverty in Big Time College Sport" confirms that 85 percent of college athletes on scholarship live below the poverty line.
Not only are the NCAA rules that prevent colleges from paying student-athletes immoral, but they also are likely illegal. Section 1 of the Sherman Antitrust Act, in pertinent part, states that "every contract, combination … or conspiracy, in restraint of trade or commerce … is declared to be illegal." Applying this language, any agreement among NCAA members to prohibit the pay of student-athletes represents a form of wage fixing that likely violates antitrust law. In addition, the NCAA's no-pay rules seem to constitute an illegal boycott of any college that would otherwise seek to pay its student-athletes.
The NCAA defends its no-pay rules on several dubious grounds. For example, it claims that compensating student-athletes would destroy competitive balance in college sports; however, it does not consider the possibility of other less restrictive alternatives to maintain competitive balance. In addition, the NCAA claims that compensating student-athletes would create a Title IX problem; however, the average Division I men's basketball coach earns nearly twice as much in salary as the average Division I women's basketball coach. NCAA members have not suggested terminating the pay of college basketball coaches to resolve this concern.
The argument in favor of allowing colleges to pay their student-athletes comes down to economic efficiency, distributive justice and a reasonable interpretation of antitrust laws. By contrast, the argument against allowing pay to student-athletes arises mainly from greed and self-interest.
Marc Edelman is an associate professor of law at Zicklin School of Business, Baruch College.
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