PASADENA, CA – NOVEMBER 30: California Golden Bears running back Christopher Brown Jr. (34) runs the … [+] ball and gets denied a touchdown during a college football game between the California Golden Bears and the UCLA Bruins on November 30, 2019, at the Rose Bowl in Pasadena, CA.(Photo by Jordon Kelly/Icon Sportswire via Getty Images)
Icon Sportswire via Getty Images
By Andrew Zimbalist and Donna Lopiano
California Act SB 206 woke up politicians across the nation. The Act, signed by Governor Gavin Newsom on September 30, makes it illegal for Californian colleges to prevent students from independently seeking and receiving income for the use of their NILs (names, images and likenesses) from third parties outside their institutions. Seventeen other states have introduced or are planning to introduce similar bills, and related legislation has been presented in the U.S. Congress.
We should support the basic premise of these bills and be upset about the current NCAA system that prevents athletes from engaging in outside employment, which is a right enjoyed by non-athlete students. It’s one thing for the NCAA to declare a student who is a professional athlete ineligible for college sports. It’s an entirely different matter to tell athletes that out of season, they can’t engage in other remunerative activities, such as a youth sports camp or being paid for product endorsements. These pursuits and economic opportunities are not unreasonable as long as (1) the institution does not arrange them or use them as recruiting enticements, (2) the athlete fully discloses these agreements, and (3) the athlete shows that such income does not exceed marketplace value.
Faced with losing control over an athlete’s reasonable outside employment and NIL use, the NCAA alleges that the sky will fall. Collegiate athletics’ “purity” will be lost. These cries of alarm are reminiscent of the mantra of the 1970s: “If women are required to have equal opportunity to participate in college sports, it will be the death of big-time football.” Some schools express specific fears such as the possibility that corporate sponsors of college teams will begin to divide their promotional budgets between the schools and the athletes. Depending on how this division is made, it might have a smaller or larger impact on the athletic department’s revenues. But giving athletes the right to earn income from the free marketplace outside their institutions is not going to be a punch to the economic gut of intercollegiate athletic programs.
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The economic system of college sports has long been broken for other reasons: uncontrolled spending on recruiting, lavish athletes-only facilities, and extraordinary salaries to coaches and administrators.
The Football Bowl Subdivision of NCAA’s Division I represents the 130 most commercialized athletic programs in the country. According to the most recent NCAA report, these schools’ athletic departments experienced a median operating deficit of $16.3 million during 2017-18, and this figure fails to account for most capital spending and many indirect costs. The situation is identical in the rest of Division I and in all other NCAA competitive divisions, where 100% of the institutions operate athletic programs heavily dependent on funds derived from all students.
These virtually ubiquitous deficits occur despite the reality that almost every athletic program budget is being propped up by extraordinary subsidies from student tuition in the guise of “general fund contributions” and mandatory student fees—heavily supported by $30 billion in federal Pell grants, by federal tax preferences and by state financial support for new facilities. School tuition and mandatory student fees have continued their steady rise, producing all-time highs of college student debt.
Why are there no constraints to these steadily rising costs? College athletic departments do not have shareholders who demand profits for dividend payouts or stock appreciation; rather, they have stakeholders (boosters, alums, students) who demand victories—winning at any cost. The career trajectories and salaries of the athletic directors and coaches are a direct function of the competitive success of their teams. This means that when extra revenues pour in (by the tens of millions) from media contracts or donors, the AD invariably finds a use that will help the teams compete.
Coaches are paid for the value produced by the unpaid players they recruit. In 2019, there were 176 college football and men’s basketball coaches who received salaries exceeding $1 million; 71 coaches exceeded $3 million, and 38 exceeded $4 million. The highest-paid coach was Dabo Swinney at Clemson, with a guaranteed salary of $9.3 million plus bonuses of $1.1 million, and a potential buyout clause worth $50 million. Swinney’s assistant coaches pulled in a total of $6.8 million, raising the total for all football coaches to $17.2 million, without considering their handsome perquisites and possible outside income.
Because there is no draft like the ones used in professional sports, copious dollars are expended on recruiting impressionable teenagers—building Taj Mahal locker rooms, training tables, luxury dormitories, and practice, competition, meeting and computer rooms not open to non-athlete students. College presidents admit that football and basketball coaches are more powerful and not under their control. They cannot stop the building sprees or salary escalations. No one at the campus level can put their foot on the brake.
But at the heart of the matter is the fact that the system is ethically broken. Athletes in highly commercialized football and basketball in particular are not provided with the educations they were promised. The institution waives its academic admissions standards and then engages in an academic guidance system designed to prevent the underprepared athlete from failing in the classroom. The athlete is instructed to choose less demanding academic majors and register for fluff courses and is then propped up by an academic support system of tutors and learning specialists controlled by the athletic department. The NCAA continues to allow coaches to demand 30 to 50 hours per week of the athlete’s time in-season while misleading the public into believing there is a 20-hours per week limit to athletically related activities that allows athletes to meet their classroom obligations.
The “purity” of college athletics is further broken because it does not adequately protect the health and safety of athletes. There are no college athlete labor unions demanding that schools spend more on health benefits and protections for athletes. Athletes and their families are required to use their own insurance policies as a condition of athletes trying out for teams. There is no guarantee that the institution will cover the full expense of an athletic injury. There is no long-term coverage for athletes who are subjecting themselves to possible brain damage and other life-altering ailments from participation in collision sports. Athletes stressed by unreasonable time and physical demands of their sport, as well as the expectations of academic performance, experience sleep deprivation and mental health challenges.
And there’s another train barreling down the tracks. Unless it is prohibited by future national legislation, legalized gambling is coming to college sports, and college athletes, without sufficient remuneration, will be increasingly vulnerable to the wiles of gambling rings.
So where are the adults in the room? Who will confront such madness and address the need for reform? NIL rights are only a modest first step. Today, NCAA and athletic administrators are busy spinning unwarranted fears about the dangers of NILs. The NCAA is incapable of imposing the necessary constraints. The NCAA restructured itself in 1996 to yield control over its policies to the most heavily commercialized athletic programs (the 130 FBS members). The FBS plutocracy took over. The NCAA has had plenty of time to reform itself and to conform to its vision of intercollegiate athletics as an extracurricular program. It has failed utterly.
Thus, Congress may be the only hope to fix this broken and failing NCAA system. National policy already intervenes in college sports through tax preferences and massive subsidies. It is time for a more constructive intervention and, as called for in a bipartisan bill authored by Donna Shalala (D-FL), for the appointment of a Congressional Advisory Commission to consider public policy options moving forward.
Andrew Zimbalist is the Robert A. Woods professor of economics at Smith College, the author of several books on college sports, a frequent consultant in the industry and a member of the Drake Group, an advocacy group made up of academics that aims to “defend academic integrity in higher education from the corrosive aspects of commercialized college sports.”
Donna Lopiano is the former CEO of the Women’s Sports Foundation, former director of women’s athletics at the University of Texas and president-elect of the Drake Group.