MSU Law Faculty in the News
Why NCAA won't pay athletes to play while big-time coaches, schools profit
April 4, 2008
Detroit Free Press
By Michael Rosenberg
This weekend, the NCAA will host its annual monument to financial inequity.
All four Final Four coaches -- Memphis' John Calipari, North Carolina's Roy Williams, UCLA's Ben Howland and Kansas' Bill Self -- make in excess of $1.3 million per season. Calipari leads the pack at $1.8 million per year, though Williams can make that much in incentives.
Their players, meanwhile, can receive only the value of their tuition, room and board and books.
Of course, after the Final Four, somebody is sure to address the situation:
At least one of the coaches will get a raise.
Elite coaches always get raises. The reason is simple: The coaches are operating within a free market, but the players are not.
It is perfectly legal for Memphis to give Calipari a $15,000-a-year clothing allowance. (That's not a hypothetical -- the man actually has a $15,000-a-year clothing allowance.) But if that same school wants to give an athlete a new suit, the athlete risks ineligibility, because as NCAA president Myles Brand says, "We call that 'cheating.' "
Essentially, schools have collectively decided they can put their money anywhere they want -- except in the pockets of the players who bring it in.
As a result, schools spend millions on nonrevenue sports, facilities and coaching salaries. But players don't get a cut. They are not even allowed to make money through third parties -- to make endorsements or sell autographs or otherwise profit from their athletic ability.
"It's obviously inequitable," said Marvin Miller, the former head of the Major League Baseball Players Association and the man who helped bring free agency to American sports. "It reminds me of the old days in baseball, except major league coaches and managers were as much discriminated against as the players. Apparently, not so here. Here, it's just the players."
The NCAA often says that most Division I athletic departments lose money. That may be true, but big-time football and men's basketball programs are insanely profitable. The NCAA has just decided to spend the profits elsewhere -- mostly on nonrevenue sports, but also on coaches.
Penn State law professor Stephen F. Ross, who specializes in sports law and antitrust cases, summed up the situation like this:
"You basically have a massive wealth transfer from a smallish number of football and basketball players -- a significant percentage of whom are racial minorities, and a significant percentage of whom are poor -- to a group of nonrevenue sport athletes, male and female, who are disproportionately white and middle or upper-middle class."
The system seems unfair.
But is it illegal?
The conflicts
If you watch college sports on television, you have seen the NCAA's commercials dozens of times. The tagline is always the same: There are several hundred thousand student-athletes, and most of them go pro in something other than sports.
This is more than a marketing campaign. It is the NCAA's defense strategy. Brand, the organization's president since 2003, argues that athletes are students first, and that the mission of college athletics is to enhance the educational experience.
"I've been teaching philosophy for 40 years," Brand said. "The philosophy department never makes any money. The psychology department does. The English department does. Physics never makes any money. So what we do in a university is we get resources from various departments and redistribute them in order to maximize the quality of that institution, to meet the mission of that university. We do the same thing in athletics."
Brand might be an excellent philosophy professor, but he could never teach antitrust law.
"That analogy, with all respect to Myles Brand, just fails," Ross said. "It is not a defense to say we are taking the money and spending it on a volleyball team."
Said Miller: "It's a very poor argument on their part, that they can exploit one group to pay another. They've got even greater power to discriminate than the government does."
Ross points out that when a university redistributes money from one department to another, it does so on its own.
But if Michigan and Michigan State, for example, were to agree they would only pay economics professors a maximum of $100,000 a year so they could each fund a philosophy department, that would be blatantly illegal.
The NCAA is different. By definition, all Division I schools are colluding to set the pay of athletes.
But Miller and Ross both believe the NCAA's stance on amateurism might be legally protected, anyway. Ross says the NCAA has two strong legal arguments, and neither one is educational.
Both, in fact, are purely commercial.
The first commercial argument is that the amateurism rules effectively serve the same purpose as a salary cap. They allow small-market teams to compete.
"You don't want college football championships determined by who has the wealthiest boosters," Ross said. "If USC and Florida start winning all the time, and Ohio State and Michigan can't compete, people will stop going ... The fact that commercial leagues have all banned third-party payments is persuasive evidence."
The second commercial argument involves a fascinating game of legal Twister. Essentially, the NCAA could argue that its entire enterprise hinges on the idea of athletes as amateurs -- that paying them would just make them professionals. And since the worst NFL team would surely crush the collegiate national champions, paying players would reduce the NCAA to the level of minor-league football and basketball.
To sum up:
Why can schools make millions off their football and basketball players without paying them?
Because that is the only way they can make millions off them.
Miller laughed at the argument. ("Nonsense," he said.) But there is a legal precedent. In a 1984 Supreme Court case regarding the NCAA's television contracts, Justice John Paul Stevens argued that the amateurism rules were legal because they allowed the NCAA to differentiate its product from pro sports.
One could argue that Stevens was wrong -- that fans are attached to their schools, not just the idea of amateurism, and would happily watch college sports if the players were paid.
But where would one make that argument?
In court?
Or in Congress?
Students or employees?
"The problem," Marvin Miller said, "is that they're not employees. They're students. And therefore they have no rights under the law. And that's where the problem stems from."
As long as college athletes are considered students instead of employees, college athletes can't unionize. They can't strike. (They could boycott an event like the Final Four, but that would be hard to pull off without an organizing body.)
Michigan State law professor Robert McCormick, another sports law and antitrust expert, said athletes "should be treated as employees." After all, they sign a binding contract (a national letter of intent) to perform certain duties (play sports) that bring significant revenue to their employer (the school).
"They are providing very valuable service for their employer and serve under the control of their employer," McCormick said. "They are here primarily not for academic purposes but to produce winning teams."
McCormick would like to see the case go through the courts. That is the traditional method of creating a free market for athletes, going back to outfielder Curt Flood's case against Major League Baseball almost four decades ago.
"It's hard to say what the cause of action would be for a Curt Flood-type figure," McCormick said. "It would be an antitrust claim against the NCAA that would challenge the rule that all of these universities have agreed upon that limits the compensation any of these athletes can earn to tuition, room, board and books."
McCormick says the NCAA's amateurism policy "is a form of price-fixing and is illegal." But others say it is not so clear-cut. Ross points to the 1984 ruling as evidence that the NCAA would win a court case.
"Literally, the Supreme Court has already affirmed its policy of not paying players," Ross said.
Miller, who won the most famous legal fight of this kind, said he agrees that college athletes should be considered employees. But they aren't. And he doesn't see that changing, because judges don't want to damage a popular spectator sport.
"It's such an obvious out for a court," Miller said. "A court that would be pretending to do justice by saying, 'My hands are tied because the law doesn't cover them.' "
Miller turns 91 this month. He retired from the Major League Baseball Players Association more than two decades ago.
But suppose he was younger. If a college athlete approached him with the hopes of being the next Curt Flood, what would Miller say?
"If he had ideas that the courts were going to help him, I would explain to him that he doesn't have a chance," Miller said. "If he had some idea about some kind of lobbying effort -- to lobby political people -- I would encourage it."
Why things won't change
In recent years, Congress has held highly publicized hearings on performance-enhancing drugs in baseball. The hearings were never about changing the law. They were about forcing Major League Baseball and its players association to enact a stricter testing program.
Ross said that Congress could have the same effect on the NCAA. Miller said that unless Congress does something, the NCAA will conduct business ... um, education, as usual.
"They are going to do what they're doing," Miller said. "They will give the players as little as possible and that's that. I don't know what you do about it with a Congress that lets this happen, and one administration after another goes along with it. It's a terrible situation, but I don't see the solution other than a political one."
McCormick, though, thinks a political solution is unlikely.
"I don't think Congress is going to step in," he said. "Let's face it: People like it the way it is. College sports (are) unbelievably popular."
Unless somebody steps in, the inequity will continue. The NCAA will continue to use football and basketball revenue to support non-revenue sports.
"Why should these people, laborers, be exploited so other people can benefit?" McCormick asked. "That's nice that gymnastics and wrestling and field hockey athletes can get scholarships. That doesn't make it either legal or fair."
What would happen if college sports went to a pure free-market system, where players could sell their services to the highest bidder?
Title IX would be a major issue. By law, schools must treat female athletes in a way that is fair and equal to the men.
Ross said he thinks the enterprise would end up like Hollywood, where the stars get big money and almost everybody else gets much, much less. After all, is the 85th man on a football team really worth his $30,000 scholarship?
Unless somebody challenges the system, we won't know how a free market would work. Colleges will continue to spend football and basketball profits wherever they please.
And the disparity between what colleges spend on coaches and what they spend on players will only grow. It is now common for elite college basketball coaches to earn more in a year than the combined scholarship value of their entire team.
Oklahoma football coach Bob Stoops is scheduled to get a $3 million bonus on Dec. 31 of this year, bringing his 2008 income to at least $5.77 million. Stoops could pay all 85 Oklahoma football scholarships himself this year and still clear more than $3 million.
Can you imagine the Patriots paying Bill Belichick three times as much as they spend on the entire roster?
Brand acknowledged that football and basketball players would like to get paid.
"Everyone wants money," he said. "I don't know anybody who doesn't want more money. I mean, what does that show? You want more money, I want more money. I want more than I'm getting paid now. So what? That doesn't mean anything."
Brand made $895,000 in 2005-06, according to the Indianapolis Star.
"The fact of the matter is they are students," Brand said. "The fact is we don't pay students in other areas when they are engaged in activities as part of their education."
As for CBS's 11-year, $6-billion contract to televise the NCAA tournament, "that money doesn't go to individuals," Brand said. "It goes to the schools."
Does it bother him that elite coaches are making millions of dollars?
"You know, the American enterprise system is just wonderful," Brand said. "The fact of the matter is, if somebody wants to pay 'em that amount of money, good for them. They are professionals. Good for them."