A Point-by-Point Evisceration of the Myths Preventing NCAA Athletes From Getting Paid

The stadium scene.
Jan. 6 2014 2:43 PM

But Nobody Even Makes Any Money on College Sports

A point-by-point evisceration of the ridiculous myths that prevent NCAA athletes from getting paid.

(Continued from Page 2)

FBS football will continue to have tiers of varying quality. Even in a world where players get paid, the lowest tier will pay mostly in scholarships, plus a share of their comparatively small TV revenues. Today’s dominant schools—the ones in the conferences paid billions to be on TV every Saturday—will offer far more in revenue splits, just as today they offer higher-paid coaches, bigger weight rooms, and greater media exposure. With money, as with every other benefit, the market will reward better talent more richly without cutting out all opportunities for the rest.

Myth No. 4: This is all a pipe dream, because Title IX makes payments to male athletes illegal.

I’m not a lawyer or an expert on Title IX. I am an economist and I rely on data. I can see, empirically, that Title IX has changed the landscape of women’s sports in this country for the better. But it comes with its own myths that empirical observation easily dispels.

Advertisement

In 2011, ESPN.com’s Mark Schlabach wrote that “the NCAA and Title IX supporters would never go for [payments to football players]. If you’re going to pay your starting quarterback a $1,000 stipend for every game, you’re going to have pay your school’s women’s field hockey goalie the same amount.” Another sportswriter, Pat Forde, chimed in by saying that because of Title IX “you gotta pay the softball team and the volleyball team what you’re going to pay the football team and the basketball team.”

These reports have it all wrong. First, it’s not true that Title IX requires every woman to get the same scholarship as every man. We don’t see anything close to 98 women getting full scholarships at FBS schools, although those same universities regularly dispense 13 full men’s basketball scholarships and 85 full football scholarships. In 2009–10, for example, all 82 scholarship football players at Florida State got the maximum allowed award, while FSU’s women’s scholarships averaged 68 percent of a football grant. And no one sued Florida State for this disparity because individual-level inequalities like this do not violate Title IX.

Second, Title IX does not mandate equal spending on men’s and women’s sports. In 2009–10, Alabama spent $43 million on men’s sports and $13 million on women’s athletics. Alabama was not sued for violating Title IX and wasn’t unusual. All 66 BCS automatic-qualifier schools spent more on men’s than women’s sports that year, and each of them paid men’s team’s coaches more than women’s team’s coaches.

Third, it’s as yet unclear what Title IX will have to say about competitive royalty payments. Like all federal laws, Title IX is complex, but boiled down, the money element of the law says that aggregate spending on financial aid has to be “substantially proportional” to levels of participation between men and women. Title IX also aims for the gender of sports participants to mirror the undergraduate population as a whole (which more often than not is majority female), but other options besides true proportionality allow FBS schools to have more men playing sports than women. Thus men get more than half of the scholarship money even when financial aid is proportionate to participation. I am not saying that any of this is good or proper, just that it is empirically true.

Payments to athletes under Title IX could go one of several ways. Experts Linda Carpenter and Vivian Acosta have suggested that Title IX might be satisfied by each athlete earning the same percentage of his or her team’s revenues, which would not look all that different from the disparity in coaching pay that exists despite Title IX. Alternatively, Title IX might treat royalties like scholarships, where women get about 40 cents of every dollar of athletic aid. If Title IX were enforced as a truly equal gender split—to be clear, it is not treated this way today—then a hypothetical football player worth $100,000 would only get $50,000 and his sisters-in-arms would share the other $50,000. It would act like a 100 percent payroll tax, and would generate a tidal wave of new funding for women’s sports scholarships, $1 of aid for every new dollar paid out to men.

The day after ...

Let’s travel to the world without price-fixing, where schools or conferences make payment choices on their own. What can we expect?

Kentucky basketball coach John Calipari might push the envelope first, promising recruits a percentage of royalties earned from broadcasts of their sophomore season to encourage them to stick around an extra year. Perhaps Oregon State football will experiment, putting some of its Pac-12 TV riches into trust funds for athletes to compete against Oregon’s use of glass palaces and slick uniforms.

Some school might offer the next Jameis Winston $150,000. Perhaps we’ll see very little Title IX impact at all. Or maybe Title IX will be enforced more strictly than it is now, so our future Winston might net only half that amount with the rest funding larger women’s scholarships.

College football and basketball will end up like other leagues in which there is economic competition. In Europe, soccer players in the five major national leagues earn between 40 and 65 percent of revenue. In the United States, where competition occurs between monopoly leagues and monopoly unions, we see 50/50 splits. Fans complain about paychecks and ticket prices, but they haven’t stopped attending or watching games on TV.

In our dynamic economy, markets adapt flexibly to new circumstances. In 1988, the Berlin Wall seemed a permanent feature of global geopolitics. A year later, it was gone, and the free market spread east, but slowly at first. Once the market took root, some looked back fondly to when economic competition wasn’t quite as fierce. But almost 25 years later, most would agree that the change was for the better.

For college football and basketball, when the price-fixing wall finally falls, tomorrow will be much like today. Over time, America will absorb its collegiate version of East Germany, bringing college sports into a market-based economy, keeping the best of those games but jettisoning the anticompetitive conduct. But for now the wall is still in place, and it’s time we chip away at the myths that have kept it standing.

Andy Schwarz is a partner at OSKR, an economic consulting firm specializing in expert witness testimony. He focuses on antitrust and class actions across a wide variety of industries, including sports.

  Slate Plus
Slate Picks
Dec. 19 2014 4:15 PM What Happened at Slate This Week? Staff writer Lily Hay Newman shares what stories intrigued her at the magazine this week.