The NCAA: Illegally Fixing Labor Since 1906
Free market economists are a dying breed. In the past, we could scrounge one up to comment in the midst of pending market interventions such as minimum wage hikes in the same way that we could scrounge up a largely irrelevant Jackson family member to comment on their more interesting relatives (Michael, Janet, and to some extent the infamous Joe). However, as of late, the Adam Smith aficionados haven’t been showing up. We can at least depend on Rebbie and Latoya to come out of the woodwork in times of scandal; the same can’t be said of laissez-faire economists. The invisible hand is all but severed and dead, and the NCAA killed it.
College football is a gazillion-dollar industry. Fans pay millions to attend games each and every week, hundred million dollar TV contracts and endorsement deals are the norms, and top coaches rake in million-dollar salaries. Considering the magnitude of the money that is involved, it’s absolutely appalling that free-market economists aren’t in a chronic state of outrage. In the same way that OPEC (Organization of the Petroleum Exporting Countries) colludes in order to engage in price-fixing in the international oil market and organized crime groups collude in order to fix the price of heroin, the NCAA is an illegal cartel. However, unlike OPEC, which consists primarily of Middle Eastern countries, the NCAA is in America, an allegedly free market that deems cartels illegal. Unlike drug cartels, the NCAA exists not in the black market, but as a recognized and esteemed fabric of our society.
While OPEC and the drug cartels implement anti-free market price floors (minimum price at which members can sell a barrel of oil and crack cocaine respectively), the NCAA implements price ceilings (maximum price at which athletic labor can be acquired). That is, they fix the price of labor to a whopping…….zero. One might argue that tuition and room and board are appropriate compensation for collegiate athletic labor. However, almost graduating (many athletes are far from the “almost” point at the end of their eligibility) with a degree in General Studies or Advanced Basket Weaving is a largely irrelevant achievement to an NFL-bound football player, and thus of little value.
It is preposterous that we reward routine scholarships to collegiate athletes—the very same scholarships we award for academic achievement. What we expect of collegiate athletes is far more than what we expect of academic scholarship awardees. As an academic scholarship award recipient, I didn’t have to do anything other than attending classes and making decent grades, things I should do anyway as a college student. I didn’t have to endure grueling practices, and I didn’t have to risk concussions or career-ending injuries. Every moment I remained in college propelled me toward success in my career. Every moment a collegiate football player spends in college, they further risk a career-ending injury. Getting injured while in the first few seasons of the NFL will still grant you a decent payday. If you get a career-ending injury in college, handsome insurance package notwithstanding, you are in trouble. Depending on the details of the terms of your scholarship agreement, you may wind up with no income, no scholarship, and potentially limited future prospects (many athletes don’t perform as well academically due to the high demands of athletic programs, not to mention the many athletes that do not graduate).
As an academic scholarship awardee, the worst injury that I could get was a paper cut. I’ll agree that math was dangerous in grade school (if you’ve ever been stabbed with a compass or a shard from a broken protractor expertly fashioned into a shiv, you know what I’m talking about); but at the collegiate level, math is a relatively safe field. As an academic scholarship awardee, I didn’t have to spend hours and hours in practice. Moreover, I wasn’t denied the opportunity to gain royalties off of my likeness (not much of an enticing perk, as I’m sure the only person who would pay for my autograph is my dad). NCAA athletes should receive salaries commensurate to the money they bring to the University and should also earn royalties when their name and/or likeness are sold. I’m not so sure that, as an undergraduate, I brought much revenue to the University to speak of, so the fact that I had the same deal as athletes is asinine. Being an athlete is a full-time job and many athletes, especially those that haven’t garnered star status, have little spending money as they are generally prohibited from obtaining outside employment. At least academic scholarship awardees can get a job.
Athletes should be paid relative to the revenue that they bring to their respective institutions of higher learning. In fact, paying certain classes of students relative to the value they bring in isn’t uncommon. For example, Engineering Ph.D. students at Research I institutions usually earn a salary (comparable to that of a starting teaching salary) for the research they must conduct in order to complete their thesis. I’d love to think that my contribution to renewable energy in graduate school was groundbreaking such that I deserved a salary and Todd Gurley didn’t, but I’m sure any revenue I brought in paled in comparison to what an athlete contributes. The reason certain graduate students are paid salaries is that in the absence of anti-free market interventions, they must be paid. Engineers with undergraduate degrees earn 60-80k starting salary. As a result, Engineering graduate students must be paid in order to incentivize the pursuit of graduate degrees in a field in which they are largely unnecessary. If it weren’t for arbitrary draft eligibility rules, college attendance would be a largely unnecessary step for NFL-bound athletes expected to earn million-dollar salaries. The NCAA should have to pay their athletes in order to incentivize college attendance. The sinister thing about the NCAA is that they don’t have to because they are a Cartel. They fix the price of labor to zero and use NFL draft eligibility age limits to enforce their price ceiling.
Imagine if Microsoft decided to collude with Google and other technology companies to reduce their labor costs by agreeing to fix the price they are willing to pay their software engineers. What if MIT decided they no longer wished to pay their graduate students and made an agreement with Google, Microsoft, and other tech companies to enforce an eligibility age limit of 27 for all software engineers in order to implicitly mandate graduate school attendance? Of course, that would be illegal, right? Not if you’re the NCAA.
The US government has punished Microsoft, AT&T, and a myriad of other companies for anti-free market operations, but it seems as if the NCAA gets a free pass. Meanwhile, the risk incurred and efforts of collegiate athletes (a number of whom have children and families to clothe and feed) go largely uncompensated.
There was a time when I would celebrate the fact that legal cartels existed only in places like Russia, the Middle East, and North Korea. Not any more. While I am a great fan and supporter of NCAA athletics, I view them no differently than I do OPEC or the Mafia. The question remains: where are the free-market economists and why have they remained silent on this issue? Perhaps they enjoy collegiate athletics just as much as the rest of us. We are all participating in the system, myself included. While I might rant about the injustice, you are sure to find me parked at your neighborhood sports bar cheering on my favorite teams every Saturday in the foreseeable future.