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The NCAA: A Case of the Fox Guarding the Hen House


(Editor’s Note.  This piece is similar in tone to an article by Dr. Vetter that was recently published by the Chronicle of Higher Education.  Critics of the NCAA are making the point with increasingly urgency that the organization is seemingly not accountable to its own membership and frequently ignores basic legal principles as it conducts its investigations).

The past year has been witness to one college sports scandal after another. Last spring details emerged that top football players at Ohio State University had sold memorabilia in violation of NCAA rules, and although the coach was aware of the incidents, he deliberately kept them quiet. Next, we learned over the summer that a booster of the University of Miami had not only paid numerous athletes, but was even known to throw extravagant parties and supply several players with prostitutes. As things seemed they couldn’t get uglier, the nation was downright shocked by the tragic news of child molestation charges coming out of Penn State.

One wonders why big-time college sports are so prone to scandal? To slightly modify a phrase Bill Clinton made famous: It’s economics, stupid. The financial payouts from athletic success are enormous, and these payouts manifest themselves in the form of huge salaries for top coaches and other athletic administrators since NCAA rules do not allow student-athletes to be paid. What results is a system where winning means everything, even if it means breaking rules and compromising morals along the way.

Today’s superstar athletes for top BCS football or NCAA tournament competitive basketball teams are economically exploited to the extreme. Tim Tebow, for example, “earned” in scholarship benefits approximately $20,000 in his final year at the University of Florida.  Tebow’s presence added several million dollars in revenue to Florida’s athletic department (his senior season the football team alone brought in $68 million), yet his “earnings” were perhaps one or two percent of his worth. The following year he was drafted by the Denver Broncos and given a five year contract reportedly worth $11.25 million.

To be sure, lesser football and basketball talents provide less earnings power to their teams, so the exploitation of their talents is far less –but is often still positive and meaningful. Recruiting is a critically important skill in major college sports precisely because those good at it literally bring millions of dollars in revenue to their schools (a skill that is essentially unneeded by professional coaches since players are paid market wages, largely by way of a bidding process).

Thus highly skilled college football and basketball recruiters/coaches are paid millions of dollars, because their skills enable them to get the fruits of player economic exploitation. The pinnacle of working the system is arguably the University of Kentucky basketball program. Coach John Calipari, who earns $3.8 million a year in base salary — more than seven times the salary of the university president and approximately 30 times the salary of the state’s governor —deliberately recruits hot high school graduates who are already NBA caliber, but prohibited by the NBA from playing there until after one year of college. Calipari accepts that he will have huge attrition, but puts together a near-NBA quality team that runs roughshod over opponents, academic values personified by the amateur status of “scholar-athletes” be damned.

This year Calipari’s strategy seems to have worked. Led by a starting line-up that featured three freshmen and two sophomores (all of whom recently entered the NBA draft), the Wildcats easily rolled through March Madness bringing home a national championship. Calipari was awarded an additional $400,000 in bonuses for the team’s postseason success. The stakes for getting top college talent are high, and are arguably the root cause of much of the athletic scandals we see today.

Some cynics say “everyone has their price.” Good people will not lie and cheat for $100 or even $1,000, but for $1 million? Some would succumb, amending the Ten Commandments to say “Thou Shall Not Bear False Witness, unless the amounts involved are at least a million dollars.” Less “principled” or “ethical” people sell out, but for less money. One’s moral compass can be calibrated on the price at which one sells out (breaks the rules). While some (hopefully many) people will not sell out for any price, the litany of recent sports scandals shows that the incentives to win athletic contests can lead even good people astray.

Many argue that the ethics the NCAA rulebook dictates are backwards. The NCAA uses its cartel-like structure to enforce immoral and unprincipled rules that allow powerful adults to exploit relatively inexperienced and naïve 18-21 year old athletes in transition between adolescence and adulthood. One of the most common rule violations in college sports is “impermissible benefits” going to a student-athlete. In other words, a player accepts money or some other gift. However, using one’s celebrity status as a top athlete to earn a few extra dollars strikes most Americans as reasonable, and perhaps even desirable, if this money helps pay for college expenses. But, such actions are strictly forbidden by the NCAA, leading to player suspensions and sometimes even bigger scandals when the coaches try to cover-up the incidents entirely.

There are fewer scandals in the NBA and NFL than in NCAA sports precisely because the professional leagues lack the multitude of unreasonable rules and regulations designed to extract income from young adults and give it to their elders.

To be sure, most schools lack the sports revenues necessary for the coaches to make ultra-big bucks. But even with some of them, BCS-type aspirations fuel rule transgressions in the hope of joining the Big League Exploiters. And the exploiting is often not only reserved for the student-athletes themselves. Many schools tax their student bodies to the tune of millions of dollars a year to financially subsidize their wannabe aspirations in major sports (monies collected under the guise of student activity fees).

In fairness, a large portion of schools run relatively clean programs, and some use football and basketball profits to fund other revenue-draining minor sports.  We wonder, what would happen if rules required that revenues associated with big-time sports success be diverted in large part to academic programs, or go for tuition reduction for rank-and-file students? What if, say, 50 percent of the funds paid to broadcast big-time collegiate sporting events went to a fund for academic scholarships available for top students at all of the top schools? What if we also allowed players to be paid a modest amount beyond current levels, given the time commitments they make to their schools?

Dave Ridpath in his great new book Tainted Glory provides an upsetting but undoubtedly fairly common example of how the current system works to get good people to behave badly. We urge you to buy it –it is a great, provocative read. The scandal Ridpath outlines at Marshall University might have been partially if not completed averted if we changed the rules of the game.

Richard Vedder is Distinguished Professor Emeritus at Ohio University. He directs of the Center for College Affordability and Productivity where he and Matthew Denhart have published numerous articles on the economics of intercollegiate athletics.  Interested readers can go to the website at http://centerforcollegeaffordability.org/.  Dave Ridpath’s book can be purchased from amazon.com.  For ordering information, go to http://www.amazon.com/Tainted-Glory-Marshall-University-Justice/dp/1469790874/ref=sr_1_1?s=books&ie=UTF8&qid=1334762382&sr=1-1


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