Photo: ShuttrKing|KTLast week, we posted an essay by University of Chicago economist Allen R. Sanderson on why he thinks a “sin tax” should be levied against Division I college football. His basic point is that student-athletes essentially serve as unpaid labor, and since most of them never make it to the NFL (or end up out of the league after just a few years), the extra tax revenue should go toward supporting them in their effort to finish their education.
You responded quickly with a variety of comments and opinions; though not so many direct questions. So Allen has written a response that’s broadly aimed at some of the points brought up by a number of readers. Overall, it’s a good (and provocative) read that focuses on the bizarre economics of Division I college football.
Taxing College Football
By Allen Sanderson
First of all, thanks for all the great comments, suggestions and complaints. Good conversations!
In terms of Alex’s comment about “where’s the harm” (or the negative externality), I think the best way to look at it is not unlike the Antebellum South and slavery. To be sure, today’s Division I college athletes are not slaves, nor were they drafted; they volunteered, and expected to benefit more by playing football for Big State University than from their next best alternative. That said, the harm, returning to the slavery analogy, is that fans of football today are able to consume a product that is subsidized by the use of unpaid labor. If the price of football tickets rose by 50 percent, as did logo merchandise and TV broadcasts, and you didn’t want to buy in, then fine. But let’s put our money where our mouths is.
In general terms, yes, players do benefit. But that’s not the point. It’s the extent to which they benefit compared to the coaches and other athletic personnel that matters. For example, compare the average salary of NFL players to the average salary of the NFL coach. Then do the same thing for college football players. The Detroit Lions devote about half their revenue to players’ salaries, while down the road a few miles, the University of Michigan pencils in about 10 percent of its revenues for player “salaries.” In a competitive marketplace, these two costs would be much closer to each other. The difference gives you a rough approximation of the exploitation rate.
The age issue – to Michael’s comment – is an important one. I’m allowed to drop out of college, or not go at all, if I want to start a computer business in my garage, star in a Hollywood movie, or pursue whatever whim or dream I have. But the cozy relationship between the NCAA and the NFL requires that these athletes spend effectively half their useful economic lives in unpaid internships (a.k.a. athletic grants in aid) so that professional teams can do things like determine how good their knees are before drafting them. The average NFL player is only in the league for four years (actually, it’s 3.4 years, per Dubner’s conversation with NFLPA head DeMaurice Smith), which is roughly the same amount of time he spends in college before being eligible for the draft. The NFL benefits from this arrangement; the university benefits, but at some point well shy of four years, the player does not.
To Joshua Northey’s comment, it’s much harder to sue the NCAA and colleges for collusion, than it is to sue the NFL. Not impossible, just harder. And the cartel that is the NCAA caps the players’ salaries, but can’t do the same for coaches because they’d be hauled into court (and likely lose) in a New York minute. So, coaches can sell their services to the highest bidder, while the student athlete cannot.
Take this rough example: If the American Economic Association could cap all assistant professor salaries at $50,000 a year, wouldn’t it still be beneficial to pursue a career of teaching and research? Sure, just not nearly as lucrative. Why don’t the leading 50 PhD programs join together to enact such a plan? (See the Sherman Act)
By the way, I am in favor of Title IX opportunities for women, but I’m not sure why those scholarships, and for non-revenue sports in general, have to be financed on the backs of the football and men’s basketball teams. If the institution wants to field women’s teams, great. (Plus legally it will have to.) But then why should football players fund these things? Find another source. In addition, the vast majority of NCAA football and men’s basketball players are African-American; the vast majority of NCAA volleyball, baseball, swimming, lacrosse, etc. players are white, and from middle and upper-income families. At least Robin Hood took from the “millionaires and billionaires.”
Being a football or basketball player at a Division I university is a full-time job, leaving little in the way for much of a life outside the weight-room or practice field. So the “kid” is unlikely to get anything in the way of a decent education. There aren’t that many hours in the week. Plus I’m not sure why graduation rates are a good gauge of a program’s academic side. The athlete is really only at the university to play ball. Case in point, during a nationally-televised college game last weekend, the announcer referred to a player who wanted to transfer; not because another university had a better chemistry department, but because the kid thought he could start (at QB in this case) somewhere else. Let’s stop kidding ourselves: these athletes are in college because the professional leagues require a certain period of indentured servitude.
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Sin taxes are usually designed to give us less of the behavior that we are taxing. What happens to all those students we are trying to help when revenues fall because of a change (negative) in fan behavior and purchasing patterns? People love college football in large part due to the purity of the game, and I’m not sure fielding a bunch of mercenaries on a college squad would engender the same type of attachment to the game (although we do love our NFL).
And I don’t know how you can possibly define a scholarship athlete as “unpaid labor.” What’s the cost of going to State U. (let alone Notre Dame or one of the other private institutions) with room and board, tuition, stipend, books, tutoring, and so on, per year.
When I continually hear all of this about “poor, exploited student athletes”, I think about choices and money.
What if I told you a “poor, exploited student athlete” , could go to a FBS / Division 1A school, get a full scholarship, talk with agents about guaranteed employment after graduating from their school, that they would not lose these benefits if they didn’t make/stay on the team…and get paid over $10,000 a year!!!
There is not one school where you can legally do this… there are THREE! Army, Navy and Air Force. At these institutions, in addition to a full-ride, they’d receive $895 a month (year-round), and a guaranteed job after graduation that starts at $69,000.
So it’s not about the money, it’s about the money. These poor students are exploiting themselves. They’d rather go to Big State U for the lottery ticket-chance at getting paid in the NFL/NBA, than to earn a degree (debt free), get paid $10,740 a yr in school, and get a guaranteed job starting at $69,000, and making over a $100,000 in a few years.
Suggesting that someone “just go” to a service academy is like suggesting that someone “just go” to Harvard or Yale. The reason that the service academies are such great deals is because they have very high standards and the students that go there are worth every penny. Johnny Div 1 Football player is probably doing all he can to meet the minimum academic standards to get into State U and wouldn’t merit a second glance from a service academy let alone ROTC. Oh, and those schools don’t look too kindly on criminal records either.
I think there is more to incentives than money. I loved playing football in High School because it was FUN. I simply did not have the physicality to play college football. I would actually PAY great sums of money to have the athletic ability and opportunity to be out there playing a game I enjoy in front of 90k fans and millions of television viewers.
Naval Academy has an 8% acceptance rate (same as Yale). Air Force and Army are both 13% (ahead of Duke @ 16%).
Starting base pay for a 2LT is 34K/yr with housing give or take ~1K/mo. At 10 years as a Major the base is 77K with give or take 1.5-2K (depending on dependents) so at that point you are close to the 100K mark. 10 years would not typically be categorized as a few years.
Alas, comparing 4 years at a service academy to a “normal” university in regards to student life is on par with comparing a county jail to a maximum security prison.
As a former college basketball walk-on (read: tall, white, and semi-athletic) at a big name basketball institution, I was fortunate enough to see first hand what this article relates to.
Bluntly, players are already paid. Not in the way you might think, though. If we want a haircut, a drink at a bar, or a new Nintendo, all we have to do is win and then it becomes all too easy to see new ‘friends’ support us. And if we can’t win, we can try to peddle our jerseys, our shoes, and our complimentary tickets, as long as NCAA compliance doesn’t catch us.
But, if we want a car, an iPhone, or gas money? I’m sorry, but unless we qualified for a hardship grant, you are physically unable to carry a full class load, a full time ‘job’ (athletics), and still hold a part time ‘job’ on the side to afford what would be basic luxuries for most, if not all, college students today. How many part time jobs offer hours flexible enough for a student to be randomly out of town three days a week, work inconsistent hours, and still offer steady pay? None that I ever worked. And good luck telling your coach, who owns the right to revoke your scholarship, that you’re too tired to play or study because you had to wait tables last night after practice.
The cynic will say, “Well, I had two kids, worked three jobs, and still didn’t get a free tuition like you athletes do”. And they’d be right! Athletes are fortunate!!! They are, because they are rewarded for the hard work they put in to please those who are entertained by their efforts.
But as the article points out… I worked my tail off to get a masters education AFTER school. Most of my teammates are working random jobs throughout the area. A select few were fortunate enough to be drafted. But our coach still makes millions every year. Advertisers pay top dollar to be associated with our team. Our fans shill out $50+ for OUR ‘official’ jerseys. But after 4 years of blood sweat and tears, the most an athlete will ever see of the $8 Billion-with-a-B deal that the networks signed with the NCAA will be on TV in March.
Heaven forbid we ever get caught trading an autographed pair of sneakers for that TV though…
At my University, students athletes get a long list of benefits. A LONG list. And at $40,000 per year, I would say their athletic scholarship definently counts as payment . Not to mention, the best housing, early class registration, and either an xbox 360 or playstation 3 in their locker (its the athletes choice).
Spending on sports is already high enough. And the fact is besides football and basketball, most sports go relatively unnoticed. Unless I have a friend who plays it, or I played it in high school, the odds of me attending another sport’s game is low.
And as a student nonathlete, hearing about certain profesors making their classes very easy to pass and the class being 90% athletes or that Swahili is the foreign language for athletes because the classes have such small workload is infuriating, and it only maintains the idea of a dumb jock, when so many student athletes pursue degrees they use for a career one day