NCAA Madness: Making Billion$ Without Paying Full Labor Costs

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I love college basketball. “March Madness” is my favorite time of the year. I fill out brackets and root for my favorite teams. That’s me, the fan, speaking. But me, the sociologist, knows the system is flawed. It needs to be reformed so that what happens in the name of college sports is aligned more compatibly with its sponsoring agency, higher education.

Courtesy: Philly.com

Courtesy: Philly.com

The challenge is figuring out a way to manage the big-money industry that is college athletics today. I wouldn’t have a problem with the status quo if it weren’t for one thing: multiple parties–the media, the NCAA, and universities, to name principals–are reaping huge financial benefits without assuming full labor costs for their front-line workers, the players. As a newspaper reader put it last week in response to an article on college sports: “Anybody can be a … business mogul … /if you don’t pay/…full labor costs.” (The New York Times, March 14, “Syracuse, Boeheim, and the NCAA)

The numbers are staggering. The rights to broadcast March Madness (with internet rights)–just one of many media rights granted by the NCAA–total $11 billion over 14 years (source: NCAA.com, 4/22/10). What a boon to the NCAA’s bottom line! The Huffington Post reported last week that the NCAA garnered nearly $1 billion dollars in revenues last year, earning a net of $80 million dollars. The media win big, too. For televising “March Madness” CBS and its partners will sell more than $1.1 billion in TV ads this year (source: Kantar Media). It’s “Marketing Madness.” Kanter’s Jon Swallen told USA Today. The sporting public is engaged financially, too—and in a big way. Forbes Magazine estimates that 40 million Americans will wager $9 billion dollars on the tournament this year.

That’s a lot of money that goes into a lot of pockets. But the college athletic business model, which mirrors professional sports in so many ways (including marketing, promotion, and media attention) is peculiar: front-line workers (the players) aren’t compensated for the full value of their work. They’re “compensated,” of course, in the name of tuition and living expenses, which the NCAA estimates to be about $2.7 billion annually in athletic scholarships alone, but a lion’s share of financial benefits goes elsewhere: to the NCAA, its member schools, coaches, athletic administration, support staffs, and the various media outlets that have broadcasting rights and report on the games.

Courtesy: hoopniks.com

Courtesy: hoopniks.com

To its credit the NCAA is making adjustments, most significantly by enhancing the compensation that athletes will receive–at least those athletes associated with the so-called “Power 5 conferences.” That includes 65 institutions across the country (53 public and 12 private) that play in the most recognizable athletic conferences, including the Big Ten, Southeastern Conference, and Atlantic Coast Conference. The NCAA reform, which allows schools to increase compensation to the level of the Federally-determined cost of college attendance, was approved recently after lengthy discussion and vote. There were 80 voters—one from each institution and from 15 athletes (three representing each conference). The resolution passed 79-1. Boston College registered the lone no vote.

BC’s athletics director, Brad Bates, explained the school’s reticence in an article published last week in The New York Times. “We’re one of the few countries in the world that combines our sports with our educational system,” he said. “I think the ideology behind that is very noble because I think it views sports participation as developmental. But it’s also risky because it presents a context for potentially compromising values.”

Mark EmmertThat’s well put because it’s the nub of the problem. And it’s why the recently enacted NCAA reform isn’t the only game in town when it comes to playing fairly with athletes. A proposal to permit college football players to unionize is under review by The National Labor Relations Board; law suits have been filed against the NCAA by former players (several have been settled); current and former college athletes have organized players’ associations (e.g., College Athletes Players Association @CAPAssociation). And the Federal government has investigated various ways of regulating the NCAA, including mandating / prohibiting certain actions as part of two proposals: The NCAA Accountability Bill and The Standardization of Collegiate Oversight of Revenues and Expenditures Act (see BloombergBusiness, 7/15/14).

For its part the NCAA has bulked up on Washington lobbying. USA Today (1/20/15) reported that the NCAA spent nearly $600k on Congressional lobbying in 2014, more than it spent the previous three years combined. In contrast the NFL, #1 in lobbying spending among sports leagues, shelled out $1.2 million in 2014 (source: Open Secrets).

Now the NCAA will need to defend its practices with another group: university faculty. On March 12 The College Athletes Rights and Empowerment Faculty Coalition, known as CARE-FC, announced it will work on behalf of “college profit athletes” to advance their civil and human rights.

Richard Southall (courtesy academe.com)

Richard Southall (courtesy academe.com)

CARE-FC co-founder, Richard Southall, who also directs The College Sports Research Institute at the University of South Carolina, said that the NCAA and its members have engaged in a “decades-long strategy of re-classifying and re-branding the employer-employee relationship as an education-based avocational pursuit,” which it is not. In a White Paper CARE-FC refers to the student-athlete label as “a myth.” They are employees, the group asserts, a conclusion based on a comparative analysis of athletes’ functions vis-à-vis other university-related workers. That conclusion is supported by research conducted over the years by Michigan State University law professors emeritus, Robert and Amy McCormick. “Denying employee status to these athletes serves the industry, not the athletes,” CARE-FC claims.

Labeling the current NCAA model as a “hypocrisy unworthy of higher education” CARE-FC will help athletes “seek relief from the fraudulent business practices used by college sports organizations.” It will develop relationships with organizations that share its philosophy and goals; educate policy makers about exploitative practices in college sports; and focus attention on how these practices impact minority athletes in particular.

Robert & Amy McCormick (Courtesy msu.law.edu)

Robert & Amy McCormick (Courtesy msu.law.edu)

“College athletes don’t just need a seat at the table,” said CARE-FC’s co-founder, Ellen Staurowsky of Drexel University, “they need a base of support…/that/…protects their basic civil and human rights.”

Ellen Staurowsky (courtesy drexel.edu)

Ellen Staurowsky (courtesy drexel.edu)

While it’s too early to predict where things will settle, it’s a safe bet that the system won’t remain as is. There’s simply too much churn in the system for the status quo to remain intact.

In the meantime pundits have gravitated to the issue, fileting the NCAA in the process.

Here’s a clip from The Comedy Channel’s “The Daily Show with Jon Stewart” (from 2013, courtesy GameDayr).

Here are two other clips from the show (2014), presented courtesy of Deadspin.com.

John Oliver’s take was on display during last week’s telecast of “Last Week Tonight with John Oliver” (clip courtesy Vox.com and Youtube.com)

Where am I in all of this? “The fan me” and “the sociologist me”  need to meet somewhere in the middle. As it now stands I have a serious case of cognitive dissonance–loving the games and my teams but also recognizing that the system needs to be reformed big time. Writing about it is a way of reducing dissonance and contributing to the reform movement.

I salute faculty colleagues around the nation who have organized CARE-FC. Consider the challenge: faculty are standing up for student-athletes and raising serious questions about their employers.

NOTE: An earlier version of this article was published in LA Progressive (March 17 2015).

 

About Frank Fear

I’m a Columnist at The Sports Column. My specialty is sports commentary with emphasis on sports reform, and I also serve as TSC’s Managing Editor. In the ME role I coordinate the daily flow of submissions from across the country and around the world, including editing and posting articles. I’m especially interested in enabling the development of young, aspiring writers. I can relate to them. I began covering sports in high school for my local newspaper, but then decided to pursue an academic career. For thirty-five-plus years I worked as a professor and administrator at Michigan State University. Now retired, it’s time to write again about sports. In 2023, I published “Band of Brothers, Then and Now: The Inspiring Story of the 1966-70 West Virginia University Football Mountaineers,” and I also produce a weekly YouTube program available on the Voice of College Football Network, “Mountaineer Locker Room, Then & Now.”



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