I write this at the end of the second round of the National College Athletic Association’s Men’s Basketball tournament, also known as “March Madness.” (The tournament is now done, of course.) As part of this college tournament, 64 college basketball teams compete to be the champion of college basketball. Per NCAA rules, each team can have up to 13 players on the roster on scholarship. That makes 800+ student athletes, who in exchange for their scholarships, but otherwise don’t get paid, sell out arenas so their schools, NCAA, and television networks can make a lot of money. Now being out of college for nearly a decade, I now firmly believe that college athletes, specifically those in revenue sports (football and basketball), should be paid. Here’s my argument, in part.
What’s that scholarship worth?
One of the perennial schools in the NCAA tournament is the University of Kansas Jay Hawks. What’s the cost to attend Kansas for one year? $25,000 for in-state students, and $41,000 for out-of-state students. Given that student athletes have restrictions on working jobs outside of school, out-of-state tuition and the cost of living, that translates to about $21/hour, which, I’ll admit, looking at any other job for an 18- to 21-year old, isn’t terrible. Certainly well above minimum wage.
The problem is that the student athletes aren’t the only people in this system. There are also NCAA executives and basketball coaches.
Let’s look at the NCAA and the tournament specifically. In 2016, the NCAA made $1,000,000,000 ($1B) off the tournament. Of course, they need to pay a lot of people to run the tournament, rent venues, everything, but that’s still a lot of money, and none of it going to the 800+ players.
I think the NBA is a good reference point: pursuant to the NBA player’s association union contract, the players get 50% of the league’s revenues. Applied to the NCAA tournament, that’s $500M split between the 832 scholarship players, or just about $600,000/player. That’s a lot more than a $41,000 scholarship. Where does that money go instead?
Mark Emmert, the President of the NCAA, made more than $2,400,000 in 2016, or 58x more than the value of one year of scholarship at one of the best basketball schools in the country. That may be relatively small compare to the other executives I’ve looked at on this blog, and I’m sure he has a range of responsibilities, but if you’re a college basketball fan – did you know Mark Emmert’s name? How about the star player on your college basketball team? Do you watch college basketball because of the efforts of Mr. Emmert? Or do you watch because of the actual players playing the game?
Well what about the a man you may know if you were a Jay Hawk basketball fan? Bill Self, head coach of the U. of Kansas men’s basketball team, made over $4 Million this year, or almost 100x more than the value of one year of scholarship.
You might say, well, all those student athletes (a) get a college degree out of it and (b) have a chance to make it in the NBA and make real money.
(a) Of the 15 players on the Kansas team, at the time of writing of this, 10 had not declared a major and 1’s school website biography didn’t even speak to his major. THIS ISN’T A KNOCK ON THE PLAYERS. It’s not a secret that athletic departments steer athletes to less rigorous majors. When I was in college, the joke major that would appear on ESPN when any one football player was highlighted was “General Studies”. So to say that players are getting the best-in-class education their peers are getting, is just not true.
(b) 60 players get drafted to the NBA per year. Of those 800+ players playing the in NCAA tournament, that’s less than 10%. If you’re a professional, can you imagine if only 10% of your class got jobs after graduation? I thought my law school’s 50% employment rate at the bottom of the recession was bad.
And that’s only for the teams and players featured in the tournament. Less than half of Division 1 college teams make the playoffs, which makes that promotion percentage less than 5%. Put another way 95%+ of college basketball players don’t make NBA money.
In my eyes, these players are taken advantage of. Not all, but certainly some of these players do not come from wealthy, or middle class families, and $600K would make a significant difference in their and their families’ lives. I think what the NCAA does is terrible, and while this won’t ever be the case, if I’m ever in a position to change the way this system specifically works, I hope I help to make that change.
Pay your people,
The Anxious, Amateur Economist
The Anxious, Amateur Economist 