The New York Times reports that the college sports industry generated $14 billion last year. The biggest reason for the financial haul is that big-time college athletics—primarily football and men’s basketball—are wildly popular.
But another reason is that the labor used to produce these sporting events is dirt cheap. Yes, colleges and universities must absorb the full cost of attendance for the athletes, but beyond that the labor is basically free.
It is free because the NCAA specifically says it must be. The bylaws say a student-athlete is prohibited from receiving any compensation for the use of their name or picture “to advertise, recommend or promote directly the sale or use of a commercial product or service of any kind.”
That is the fundamental tenet of amateurism in the NCAA rules, and it’s now being challenged by California. The state legislature passed, and Governor Gavin Newsom signed into law this week, the “Fair Pay to Play” bill. Beginning in 2023, college athletes in California can be paid for endorsements and they can hire an agent.
The NCAA says the law is unconstitutional and that it will create myriad unintended consequences. The NCAA is threating to ban or penalize California schools that follow the new law.
The NCAA is right that the law opens a giant can of worms. What would be the impact of the star quarterback making big money while the forward on the women’s basketball team gets nothing? Also, what’s to prevent a big-time car dealer from promising a five-star recruit a $100,000 endorsement contract to ensure their enrollment?
However, the California law came about—and other states may follow—because of the current closed-loop system. The coaches, staff, athletic departments, radio and TV networks, suppliers and parking attendants all get paid. Sponsors pay big money for exposure that improves sales. Fans buy tickets and donate millions of dollars to athletic departments.
But the players—the individuals who practice, prepare, sacrifice, risk serious injury and provide the entertainment—go unpaid. Meanwhile, any non-athlete student can be compensated for their work.
The salaries of coaches of revenue-generating sports have skyrocketed. We know the winning coaches have become millionaires but consider this: Rutgers just fired football coach Chris Ash after going 8-32 over less than four years. He is owed a buyout of $8.5 million. That’s over $1 million per win… for being fired!
Yes, the California law does create any number of rabbit holes, but the legislation is the result of the complacency of the NCAA and major colleges and their refusal to deal with the inherent injustice of the current system.