Unpaid student-athletes make a lot of money for their schools without being paid as employees. However, that might not always remain true. The current situation is under attack.
The fine line between amateur student athlete and professional sports employee is getting harder to find. Although the NLRB just rejected attempts to organize college student-athletes who generate millions of dollars of income for their schools, the door is not yet closed on future changes. The concept of pay for performance could become as valid (and contentious) on the sports fields of educational institutions as it is in fully commercial professional competitive sports venues and private industry.
While college coaches make immense salaries, their student-athletes who produce revenue remain unpaid amateurs… technically… for the moment, at least. Major sports conferences operating under National Collegiate Athletic Association rules have begun to provide stipends to cover the difference between scholarship amounts and the full cost of the college education. That provides nothing at all for the majority of teammates playing (or working?) without scholarships, but the sports departments of higher educational institutions are reluctant to share their income.
“The NCAA defends its rules as upholding a tradition of amateurism. Big-money athletic teams also help support less-popular college sports and can boost educational budgets, the association has said. While star athletes would almost certainly get more money in a competitive market, economists hired by the NCAA say less-talented athletes could receive less, and schools might discontinue some unprofitable teams.”
What a non-surprise, that the NCAA’s testimonial hirelings would support their position!
Some might argue that the hypothetical subjunctive justifications for the exploitation of student-athletes require severe contortions to the principles of labor economics. Kids who would earn many millions if permitted to sell their services in the relatively open market for talent remain unpaid while harnessed as student amateurs to generate millions for their universities. The collegiate sports monopoly that suppresses open market competition would be illegal in the private industry sector.
Others insist that the U.S. Supreme Court’s recognition of the NCAA’s status as a legal cartel decades ago renders moot such protests about restraint of trade. The business model of many non-profit schools requires collusion for the continuation of tight controls to deter market competition and establish a level playing field. The same kinds of agreements to conspire about worker talent that cost Google, Apple and a few other Silicon Valley firms a $415 million settlement this year are permitted in higher education when it involves sports.
While academic talking heads and courts debate these sweaty issues, no one seems to have sought the opinion of compensation professionals. We should take some position on this matter, whether we have ever been unpaid amateur student athletes or not. We watch these athletic performances, fund the activities and send our children to the schools benefiting from the status quo situation. Our work careers focus on pay programs that compensate individuals for their applications of skill, effort and responsibility under specific working conditions. Who is better qualified to comment about this pressing social issue?
Work is not simply an entertaining game to us.
E. James (Jim) Brennan is an independent consultant with extensive total rewards experience, specializing in job evaluation, market pricing and pay budget distribution. After HR corporate jobs in chemical/pharmaceutical manufacturing, he consulted at retail, government, energy, IT, tax-exempt and other industries throughout North America before becoming Senior Associate of pay survey software publisher ERI until 2015. A prolific writer (author of the Performance Management Workbook) and speaker, he gave expert witness testimony in many reasonable executive compensation cases both for and against the Internal Revenue Service. Jim also serves on the Advisory Board of the Compensation and Benefits Review.
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