Editor's Note: Per this week's sports headline news, NFLPA Exploring How NCAA Athletes Can Be Paid, Jim Brennan's prescient Classic on unpaid student athletes is again current.
As Jim says, "For advance notice about tomorrow's Total Rewards headlines, follow the Compensation Cafe!"
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 compensation advisor with extensive total rewards experience in most industries. After corporate HR posts and consulting CEO roles, he was Senior Associate of pay surveyor ERI before returning to consulting in 2015. A prolific writer (author of the Performance Management Workbook), speaker and frequent expert witness in reasonable executive compensation court cases, Jim also serves on the Advisory Board of the Compensation and Benefits Review.
Image courtesy of arkorn at FreeDigitalPhotos.net
Wonder when an "association" is not a union, when it performs like one. The new developing compromise seems to promise that star student-athletes could accept income from advertisers. Personally marketing their names and licensing their faces makes them independent contractors rather than employees getting paid by their schools.
It would reduce scholarship pressures and offer income opportunities to surprising stars who lack scholarships, too.
Could such a non-wage contracting opportunity be extended to pure students with great grades? They might be free to retain all their student status while still capitalistically profiting from renting access to their personal identities. I see nothing wrong with that, myself.
How is it different from being permitted to earn wages on after-school jobs? I was the night watchman at a funeral home located right behind my university, one year. (Don't ask.)
Any new permissive NCAA rules would also enrich academic curriculum. New subjects could include "Basic Negotiating" and "Advanced Agent Selection," with audit privileges extended to parents. They better!
Posted by: E. James (Jim) Brennan | 10/30/2019 at 09:25 PM