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.