Ethical Issues Examined

I have previously blogged about whether college athletes should receive monetary compensation for their athletic services. Now comes a new case before the U.S. Supreme Court involving whether the National Collegiate Athletic Association may impose restraints on compensation related to education and educational benefits like paid internships. Both cases have some things in common including:

• Is it fair that college athletes get paid for their services, or receive educational benefits, while the rest of the students, except those on scholarships, get nothing?
• Is it right that payments and benefits are likely to be large for selected athletes in selected sports like basketball and football while payments to other athletes such as in baseball, tennis, and other sports get less?
• Is it fair that men will be paid more than women, given they provide similar services albeit with much less monetary return to the athletic departments?
• Given that the payments and benefits will likely be larger for Division I athletes, is paying those student athletes the first step down the ethical slippery slope where students in other divisions will request equal amounts?

The broader issue is that according to a report released by Murphy titled “Madness, Inc,” the revenue collected by college sports programs was $18.9 billion in 2019. However, even in the richest conferences only 12 percent of revenue goes to athlete grants-in-aid whereas 16 percent goes to coaches’ salaries. The highest paid football and men’s basketball coaches earn an average annual salary of $5.2 million and $3.2 million, according to the report.

Everyone is getting rich except for the athletes. Add to that the recent trend of athletic conferences signing deals for their own cable stations and we can see the thirst for more advertisement revenues are taking greater advantage of the work of the college athletes.

Of all the reasons to pay college athletes for their services, the one that stands out most for me is the colleges’ ability to trade on the use of athletes’ names, images, and likenesses via commercial opportunities and social media. It seems unjust to make so much money that way and not compensate the athletes. How would you like it if your company used your name, image, and made deals with other companies to trade on your talents and you were not compensated at all?

In May 2020, the U.S. Court of Appeals for the Ninth Circuit, San Francisco ruled that the NCAA was not free to limit compensation and benefits tied to education for Division I football and basketball players. The court rejected the NCAA’s argument that compensating athletes would alienate sports fans. Chief Justice Sidney R. Thomas wrote for a unanimous three-judge panel: “Uncapping certain education-related benefits would preserve consumer demand for college athletics just as well as the challenged rules do. “Such benefits are easily distinguishable from professional salaries, as they are linked to education and could be provided in kind rather than in cash.” The decision was appealed to the U.S. Supreme Court.

During 90 minutes of arguments remotely with the U.S. Supreme Court on March 30, the justices seemed skeptical of the claim made by the NCAA that payments for students for things such as musical instruments, postgraduate scholarships or paid internships will sour fans who are drawn to the amateur quality of its competitions.

Justices appointed by both Republicans and Democrats seemed persuaded by arguments made by the attorney for the student athletes, Jeffrey Kessler, that the NCAA is violating federal antitrust law with its restrictions on education-related payments.

In the initial case, a federal district court struck down those restrictions and the 9th U.S. Circuit Court of Appeals affirmed the decision. The case was brought by Shawne Alston, who was a running back for the West Virginia Mountaineers, and other student athletes.

“These are competitors all getting together with total market power fixing prices,” Justice Elena Kagan told Seth Waxman, the NCAA’s attorney and a former U.S. solicitor general.

Waxman centered his arguments on the contention that NCAA sports has always been defined by their amateur quality, which he said means that student athletes are not paid to play. He said that education-related benefits, “whatever their labels,” are effectively professional salaries.

My solution is to carve out a percentage of all revenues earned from these collegiate sports by the university to student athletes. On average, the top ten grossing universities earn close to $200 million in revenue and $180 million in expenses (including coaches’ salary). I do not know what the “ideal” figure would be, and one based on the fairness, but I do believe the time has come to provide a share of the income from sports.

With respect to compensation for services rendered, perhaps the amount of money allocated to student athletes can be placed in a trust fund while they are college athletes, so they do not spend it unwisely. Most players on a college athletic team will not be drafted by the pros and have nothing to show for their efforts.  At least they will have something to get started in life; compensation for giving four years of their lives to the game.

Steve Spurrier, the former University of South Carolina football coach, has said college athletes should be paid $3,500-$4,000 per year to help with expenses. This is not enough from my point of view, but the issue right now is whether to pay them, not the amount.

The time is right to pay these athletes. It is also right to provide educational benefits. A possible side benefit is they stay in college for all four years, not be one-and-done, and get a good college education.

Posted by Dr. Steven Mintz, The Ethics Sage, on April 1, 2021. You can sign up for his newsletter and learn more about his activities at: https://www.stevenmintzethics.com/. Follow him on Facebook at: https://www.facebook.com/StevenMintzEthics and on Twitter at: https://twitter.com/ethicssage.