Pay to play.

Andy Schwarz has a lengthy, but interesting, take on NCAA reform about player compensation you ought to take a little time to read.  There’s a part in it I wanted to focus on that makes for an interesting thought experiment, especially for those of you who are convinced that paying student-athletes would destroy the attractiveness of college sports for you.

… Another option is one Dan Rascher and I proposed in a paper we published in 2000, which is that if you feel you absolutely need to have athlete-compensation agreements among teams, do it at the conference level. If the surveys you may have seen saying fans don’t want to watch paid college athletes play football or basketball are true, the market rate of compensation won’t be very high. Schools will only spend money on players if they feel it will generate value for their consumers—alumni and other fans—and that they can charge for that value through ticket prices, broadcast contracts, and requests for donations. If “buying” talent makes the talent less valuable as a revenue generator, the price for that talent will stay close to zero.

If, contrary to all evidence that fans prefer winning, it is “amateurism” that drives demand and fans will only cheer on their alma maters if the players on the field are kept in a perpetual state of price-fixed pay, then those few misguided schools foolish enough to try paying their players will suffer with lower attendance and ratings, and the schools that stay “pure” will grow in popularity. Big Ten Commissioner Jim Delany wrote under penalty of perjury:

…it has been my longstanding belief that The Big Ten’s schools would forgo the revenues in those circumstances [if players get paid more than the cost of attending school] and instead take steps to downsize the scope, breadth and activity of their athletic programs. Several alternatives to a “pay for play” model exist, such as the Division III model, which does not offer any athletics-based grants-in-aid, and, among others, a need-based financial model. These alternatives would, in my view, be more consistent with The Big Ten’s philosophy that the educational and lifetime economic benefits associated with a university education are the appropriate quid pro quo for its student athletes.

Maybe Delany is right when he implies that the Division III version of The Ohio State University football team will continue to command TV ratings and ticket revenues on par with the ratings and revenues of today, despite a dropoff in quality. I seriously doubt it—I mean seriously; I would bet my mortgage and my wife’s and my retirement funds this is not actually true—but the beauty of the solution Team Market offers is that we can actually answer the question.

Skip Delany’s bullshit for a minute and ask yourself this question instead:  if tomorrow the NCAA settled all the antitrust suits and agreed that it would leave setting compensation levels up to each individual conference, where do you think the SEC would land in response?  Bonus question:  where do you think the SEC would have those levels set five years later?

Me, too.  And the reality is that the conference would have no choice about it, because that’s what the majority of its fans would demand.

Now I do think this vision provides a powerful incentive for schools to lobby Congress for an antitrust exemption.  But the schools won’t be doing that for the benefit of us fans.  It’ll be to keep those reserve funds fat and healthy.

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15 Comments

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15 responses to “Pay to play.

  1. reipar

    I thought the Big whatever had already downsized the scope, breadth and activity of their football programs.

  2. JCDAWG83

    If the NCAA loses this case, and they very well could, I think it will cause the actual universities to really have to take a look at athletics and the way they are operated at the college level in general. At Georgia for instance, the millions of dollars generated by athletics do not flow directly to the university. The money is generated by the University of Georgia Athletic Assoc, a separate entity formed for the purpose of making money off of athletics. If paying players becomes legal, the university will have to decide if it wishes to continue to lend it’s name to a for profit business that no longer even pretends to be amateur. I don’t know what the outcome will be, but the academicians who run colleges may balk at the idea of providing the vehicle that allows a group of independent business people to make millions off of the name of the school.

    • LorenzoDawgriquez

      +1

    • 69Dawg

      You argument is part right and part wrong. The big athletic programs usually pay for themselves and kick several million into the University general fund. The little sisters of the poor schools usually have to subsidize athlete program and that is a choice they make based on how the school profits from the intangibles of intercollegiate athletics. If the school and alumni DGAS about football or basketball then drop out of DIV I. Go down to a division you can afford or just quit. It’s really not rocket science as much as ESPN would like to believe.

      • JCDAWG83

        For the majority of schools, football and basketball are like all other sports, they don’t make a profit. If these schools find themselves in the position of not only providing a scholarship and therefore losing the tuition, room, board, etc revenue but also having to pay the student to play a sport, I don’t see much incentive for the school to continue the programs.

        College football has been trending in the direction of the NFL for the past 10-20 years. It has become a big business for the top teams and conferences. I would like to see it start trending back toward more of a high school model. Raise the entrance requirements for athletes to more accurately reflect the student body. Make the NFL create some type of farm system for the great players who aren’t college student material.

        • reipar

          If you look at the Big 5 conferences I think you will see they do make money in football. Heck even Boise State made about 7 mil last year per Forbes.

        • Macallanlover

          JCDAW83, excellent post. I agree 100% to making athletes reflect the student body and let a “minor league” model, funded by the NFL, TV, and fans pay for it. They could represent the various regions of the country (6-8), form a league, and develop a loyal following. Games could be on a Tuesday or Wednesday night. Only those serious about getting a degree need be on campus and they should meet the school requirements for admission. I would support a Southeast team and still enjoy UGA football on fall Saturdays. Schools would still be competitive with one another, even if the level of competition were a step lower/slower.

          • reipar

            And why would the minor league you are developing not play on Saturday? The I-AA teams play on Saturday although most may not notice. With division I being the new I-AA in your scenario I am sure the minor leagues would not mind the “competition” of having mildly better high school football played on the same day they are on TV.

  3. Truth

    That’s the dumbest rational for paying players I’ve ever heard. All that will happen under this format is that the teams who do pay will get the best athletes out of high school, because what 17 year old is going to choose no money over so e money. Thereby forcing all schools to pay and a constant push to increase said pay until the inmates start running the asylum.

  4. Cojones

    Excuse me, but I tried the….”interesting thought process…” and, due to my low social sensitivity IQ of understanding, couldn’t get past….”do it at the conference level.”. What in hell does “Do it at the conference level ” mean? Do what? Pay’em? How?

    Throughout this wonderful “Pay the Players” meme, all that I heve ever queried is how the hell to do it. Pushing it to the conference level means that there are no plans, no details of how to accomplish this sticky wicket.

    At this point in the great social experiment we are up to our ass in feckless bullshit.

    • Each conference could set guidelines/limits on player compensation. Not sure why that’s so hard to grasp. A form of that’s already on the table, with autonomy and player stipends.

      • Cojones

        Guidelines/limits on each player or that player’s team? Are we saying that the 2000 bucks that was projected for spending money for each player will be the amount (pending autonomy) or that another sum will be decided? Is the money for all players and not just the ones selected to compete in games or do the subs just go naked and drink homebrew? Does player comp imply paying them for their “likenesses” (or money held aside) after they are no longer “amateurs” or am I overcomplicating things by throwing all these issues together? I’m not trying to jam you and I mean that sincerely.

        It seems to me that this area is risky as hell for the current CFB model. How the sharp edges will fit has me asking naive questions about the word “amateur” and the lack of wink-wink if Congress get hold of it for political hay. Since many have gone to Harvard and Yale and may have a raccoon coat and “Boola-Boola” attitude towards their U’s FB prospects in the new invironment, I’m not at all certain that it won’t come up. What then?

        It’s not like I’m against them having money, I just don’t see how CFB can limit these small “gratuities” and for the “Semi-Pro” idea not to grow into a legal and uncontrollable monster.

  5. Connor

    Great article. Count me in Team Market. Pay ‘em all and let the invisible hand sort it out.

  6. South FL Dawg

    Put me in Team Market. There is too much money flowing in now (for certain schools and certain sports but nevertheless it’s there) that market economics is the best reform I can think of.