Money Smart Athlete Blog

Should U.S. College Athletes be Paid?

Nov 4, 2020 | Special Themes

By Iacovos Iacovides, APC Sports Consulting Ltd

When in 2015 a handful of football players tried to unionise and were rejected by the National Labour Relations Board, Donald Remy, NCAA’s chief legal officer applauded the decision and argued that: “Student athletes are not employees, and their participation in college sports is voluntary”.  The issue of financial compensation for college athletes is a very contested one with valid arguments being put forth by both sides. Admittedly, the mechanics of paying wages will not be easy to figure out, however, when things are put into perspective and both sides are weighed, then the rational conclusion is to start compensating athletes for their labour and the difficulty of implementing it should not be a defining factor. In what follows, I examine some of the arguments for and against compensation and suggest that despite the various dilemmas and considerations college athletes should be paid.

One of the most frequently used arguments of the anti-compensation camp is that universities can simply not afford to pay athletes. Even if universities—which are obviously not the most profitable entities in the world—had to pay a small salary, then that would amount to hundreds of thousands of dollars on the liabilities side of their balance sheet without any changes in revenue, which suggests that universities will either have to find alternative sources of revenue or cut back on other expenses such as investment. Moreover, poorer universities will find themselves at a disadvantage when trying to attract talent which will most likely exacerbate existing inequalities. In short, universities will find themselves in a dire financial situation.

Another argument that is usually employed by opponents of compensation is injustice. Sports vary in popularity and consequently revenue accumulation. For example, if football quarterbacks are paid equally as volleyball players then the former would argue that it is unfair and unjust since football is much more popular, it generates more revenue than volleyball and affects colleges’ image in vastly disproportional ways. On the other hand, if football quarterbacks receive more than volleyball players, the latter would complain that they are part of the same institution, train as hard as football players (and thus take time off their studies) but are not recognised as their equals. Basically, compensation will open the door to a whole new set of considerations regarding justice and equality.

It is also argued that paying college-athletes will distort the purpose of going to university. It will set college athletes apart from their peers who are there just to study with the hope of becoming lawyers, doctors, accountants and whatnot. It will alter the image of college as not a place that prepares you for the road ahead but as a pit stop; a stepping stone to their next career steps. Work hard and wait for your shot will turn into: “You are here to make money”, which is hardly the ideal mentality for an 18-year old.

However, as we all know, athletes have a hard time managing their finances which results in an awful lot of them going bankrupt early on in life. Giving them wages, albeit moderate ones, in their late teens can help them learn how to budget, save and pace themselves. Of course, such steps will need to be coupled with educational tools, but it is the first necessary step for them to learn the value of money and the “secrets” of spending and saving. Instead of an abrupt transition from earning nothing and then, in the blink of an eye, finding themselves with monthly salaries that most people don’t make in a year, giving them a small wage during their college years seems quite sensible.

Since we have already mentioned the injustices that would potentially occur as a result of compensating college athletes, we should also point out existing injustices. At the same time that athletes receive nothing in return for their labour, coaches and staff are paid extravagantly, which highlights the fact that students are effectively treated as cheap labour.

At the end of the day, students work long hours and put their bodies on the line as much as professional athletes but in their case, it is not recognised, at least financially. From a purely economic perspective, there is an opportunity cost; which sees students sacrificing studying for training. Moreover, there is also a significant amount of risk involved. In an extreme case scenario, for example, a student, may see their dream of turning pro crumble because of an injury sustained during college competitions or training, and yet the risk they put themselves into is not rewarded.

One might suggest that scholarships are a form of financial compensation, however, it has been proven that scholarships do not even come close to covering all costs. That means that people who do not come from affluent families will have to either find alternative sources of revenue or somehow manage to work, practice and study at the same time, which will certainly impede their athletic and academic endeavours.

All in all, there are rational and sensible arguments made by both sides of the debate, but the solution should be a compromise with the introduction of wages as the starting point. From there on, all stakeholders should work out a formula that accommodates the considerations of both. It has to be a solution that takes into account the financial realities of university budgets, the moral hazards and injustices that may arise, as well as complementary measures to accompany compensation in order to mitigate any potential problems.