As soon as California Governor Gavin Newsom signed a state law allowing college athletes to receive compensation for their likeness and image, Power 5 conference commissioners upbraided the governor, warning the new provision would irrevocably lead to more professionalism in college sports.
The basis for the California law rests on a fundamental inequality at universities: Everyone but athletes are allowed and encouraged to monetize their talents to jump start their careers. Much like a pre-med student accruing impressive hours as a CNA or a business major spending the summer at an internship, college athletes add value to their organizations and develop vital skills to prepare for the professional level. It’s nonsense to suggest these students do not deserve the same opportunities as their peers.
However, the NCAA does not view college athletics through the lens of pre-professional preparation and market competition. Instead, the governing body desperately clings to the rickety romance of amateurism.
This is damaging for two reasons: the NCAA profits immensely from keeping athletes unpaid, and crazy conflicts of interest arise when the organization attempts to stop under-the-table compensation.
First, the NCAA had over $1 billion in revenue in 2017, with the vast majority coming from March Madness. After accounting for expenses, the officially non-profit organization ran an astounding operating surplus of $100 million.
The organization leverages the talent and skill of its athletes to secure massive licensing deals for television, merchandising and video games. College athletes will never see the extra $100 million they generated in 2017.
The bottom line is that college athletes are not receiving remuneration that matches the value of their skills. This is not a free or fair market for competition.
Second, the NCAA’s strict rules against transparent compensation in the endorsement market pushes athletes to accept under-the-table payments.
In June 2017, the NCAA slammed the Ole Miss football program with a list of 21 Level 1 violations, including charges of lack of institutional control and inappropriate booster activity. Sound familiar?
The NCAA’s investigation originated with concerns over Ole Miss’s recruitment of star prospect Leo Lewis. SB Nation reported, however, that the NCAA refused to pursue evidence that Ole Miss archrival Mississippi State committed multiple recruiting violations while also pursuing Lewis. Leo Lewis eventually played football at Mississippi State.
The case exposed the “underworld economy” of booster programs. In fact, these hustles illustrate college athletics has a demand and supply problem. NCAA caps the compensation colleges can provide athletes at the value of scholarships. Athletes have skills worth more than those scholarships, so they have an incentive to find more compensation. Booster programs, however corrupt, attempt to fill in the gap between scholarships and fair compensation.
That’s not to say that corrupt booster programs are positive. The recent FBI investigation into college basketball revealed serious crimes committed by boosters. Removing the ridiculous standard that college sports remain an amateur affair would allow players to freely and openly lobby for fair compensation. This would reduce dependency on black-market recruiting techniques.
The Ole Miss case reflects the NCAA’s fundamental hypocrisy. The NCAA supposedly upholds the virtues of competition yet stifles its players ability to compete for a higher standard of living. Ultimately, the NCAA abuses its monopoly. Without outside pressure to innovate, the organization has no incentive to change.
California’s law could finally bring some relief. Despite the law’s limited scope and uphill battle to actual enforcement, the NCAA is now at a reckoning. It simply cannot continue to exploit its athletes and expect to face no consequences.
Sam Harder is a freshman from Wichita studying economics, mathematics and French.