A Conversation about "Pay for Play"

The latest Realignment craze wasn't the only major story for college athletics this week. After a season and off-season full of embarrassing events and scandals, the Lords of the NCAA recently convened at the Crossroads of America for a retreat. Many articles were written in anticipation of what is usually an anti-climatic occasion, but one in particular caught our attention. This one, from ESPN, outlines the winds of change that preceded the event. That article--written before the event itself--sparked a free-flowing discussion between myself and Reggieball over the "pay for play" issue.

As everyone knows, "pay for play" remains a major issue of focus for college athletics. In fact, the folks at ESPN have also been running a massive "pay for play" series this summer. Using the articles from that series as a starting point, we scrutinized various issues and viewpoints related to the "pay for play" debate over email. The result was a partly a Socratic dialog (where the characters ask each other questions and gradually refine their positions), and partly the third act of Too Good to be True, which is the George Bernard Shaw play that ends with the characters making speeches directed at no one in particular.

The full exchange is after the jump...

txtwstr7: I think the OTL piece sets the foundation for an interesting narrative, then fizzles out. And I think that's my most common reaction to these types of pieces--more sizzle than steak. I've read just about every article associated with ESPN's "Pay for Play" series. Some of the articles--especially the Kirk Cousins one--were interesting or informative. Some of them were not. Almost all of them feel incomplete.

To be honest, most of the "pay for play" articles remind me of the silly Realignment articles and Cam Newton articles from last year. Just how the popular "Texas should join the SEC because....footbaw!" argument ignores the additionally relevant factors of academics, politics, recruiting, corruption, and the LHN, any argument over "players should be paid a cut of jersey sales" generally ignores a whole host of potential domino effects associated with administering such a seemingly minor proposal. With each of these issues, you have to force yourself to analyze them from a macro level. There are just so many sub-issues related to each proposed change, and the sub-issues often get glossed over when championing one position over the other.

Reggieball: You are right in that there is a lot of interesting stuff in the pay for play debate, if you weed out all of the crap. I thought the OTL article had one really interesting quote:

"Since then, we've seen SEC commissioner Mike Slive propose to lift the value of an athletic scholarship to cover the cost of attendance (an extra $3,000 a year) and make them multi-year deals to better live up the idea of a "full ride." He also wants academic reforms that would sideline many top prospects -- a higher minimum entering core-course GPA (2.5 instead of 2.0), and freshman ineligibility for those who fall below that mark so they can focus on school."

There is a lot of angst about NCAA's role in creating minor league programs for the NBA and the NFL. In basketball, the "one and done" phenomenon has a lot of people upset. One way we could reduce this would be to require that all the athletes who play NCAA sports would belong in college even if they didn't play a revenue sport. Let's take the Kentucky basketball program as an example of what some might view a minor league team for the NBA. If we tighten up academic standards, Brandon Knight and John Wall are still going to play in the NCAA (these guys certainly belonged in college), but some other guys probably end up in the NBA D league. John Thompson totally disagrees with this, for what it is worth.

txtwstr7: The suggestions from Mike Slive deserve a bit more unpackaging. It's not as much as what some people want, but I'm definitely in favor of most of the minor proposals associated with slight adjustments to scholarship benefits, stricter enforcement of violations (both individual and systemic), and increased academic standards. I think permitting additional scholarship benefits eliminates the "we sell stuff because we need money" defense and could be used in conjunction with stricter enforcement. Overall, though, I'm extremely uncomfortable with a lot of the "pay for play" chatter, especially when the argument shifts towards allowing players to fully and completely market themselves.

Reggieball: Let me push you on that. Why is the whole idea of allowing NCAA athletes to go out and get endorsements off the table? In essence, I am going to make Michael Wilbon's argument, although I will be making it a little bit differently.

We know how much financial trouble universities are in, and how few athletic departments are actually financially self-sustaining. One of the practical problems with pay for play is that most universities don't actually make any money off of athletics. It is just another expense. I guess you can make the argument that this is because there are so many non-revenue sports weighing the system down, but only 68 of 120 FCS football programs generate positive cash flows. Roughly half of the FCS football programs are in the red. At many of the profitable programs, the profit is small. This money goes to help support the rest of the athletic department, which in many cases are highly subsidized by the universities.

So it is hard to justify allowing the universities to start paying players. In effect, this money will be coming out of tuition paid by students of the university.

But the free market offers a solution to this problem.

Why can't we let players go out and get endorsements? Kevin Durant or Vince Young certainly could have gotten them. The NCAA's rules restrict these guys for maximizing their earnings. Terrelle Pryor could have endorsed multiple businesses in Columbus. And we could even bring back the days of the Burnt Orange Cadillac. If the athletes get paid, they are more likely to stay longer in college. None of this comes out of the pockets of tuition paying students. It seems like everyone wins. I know this feels shocking to even consider. It just feels so... wrong. But why exactly? It isn't really immoral, it is only against the rules. If the rules were changed, there isn't anything inherently wrong about it.

I guess the worries relate to unintended consequences. One worries that there will be all of these sleazy guys hanging around the athletes. But to a certain extent, it is already happening. So in my scenario, the athletes will at least be getting a bit of scratch for putting up with the sleaze. So why can't this work? Oh yeah, it might come into conflict with some of the university deals and endorsements.

This reminds me of Greg Anthony. I don't know if you remember this incident, but during his college years Greg Anthony had a financial interest in a t-shirt company and tried to use his position on the team to promote the business. People considered UNLV in the late '80s and early '90s as the sleaziest program around. But if you look at this particular incident under a different light, Greg Anthony was just an entrepreneur. The NCAA's problem was that Anthony was trying to make some money on their turf, and they weren't getting to wet their beak.

The NCAA owns these kids. That is just the way that it works.

txtwstr7: I think you do a nice job building the framework for the endorsement deal argument. It's refreshing to see an argument that extends beyond saying "it's only fair" or repeating the word "exploitation" a bunch of times. However, I'm going to do my best to tear it apart. For me, the bottom line is that it would completely eradicate any vestiges--even in theory--of the NCAA being composed of amateur student athletes. And I'm not prepared to go that far.

You are correct in saying that the strongest counterargument is unintended consequences. But I'm not really concerned about whether players might sign deals that violate their university's pre-existing endorsements contracts. More importantly, I'm uncomfortable with the idea of schools using pre-arranged endorsement deals as a way of influencing recruits. Just think of how many endorsement deals that schools would line up for Johnathan Gray or Dorial Green-Beckham. And, if you want to say that schools couldn't be involved, think of the endorsement deals that boosters would put together for recruits, which would naturally be school-specific offers. In such a system, the entire recruiting process would become synonymous with endorsement offers. Put more simply, such a system would immediately become the legalized version of the alleged Cam Newton bidding process.

Reggieball: I definitely hear your concerns on possible "marketing synergies" between the universities and the players. Or having the boosters involved, and building a system where the top recruits going to the highest bidder. Let me propose a solution to this problem.

The NCAA could step in and regulate the endorsement system, and put limits on the amount of endorsement money players can accept. We can still cut certain players in on the deal without having to pay them out of university money that should probably go somewhere else. And with oversight, we can reign in some of the potential for excess.

Even if we don't have a cap on endorsements, I wonder how many recruits will truly inspire an all out bidding war? Honestly, how many recruits really have the kind of potential impact that people would bid for? There would probably be some bidding wars in the the first year or two, if we switched over to this system. But once it was in place for a few years, things would start to settle in. Over time, people will figure the system out and behave more efficiently.

txtwstr7: Well, maybe. But there's another issue with endorsement deals that bothers me, outside of the amount of endorsement money that schools could arrange for athletes. I'm also leery of the timing. I don't like the idea of star recruits signing endorsement contracts before they've passed a single class. As mentioned above, it basically disintegrates the concept of college athletes being both "amateurs" and "students." I know that most people already think that ship has sailed--and maybe it has--but I don't think that's a good enough reason to completely throw open the doors to free market ideals.

Reggieball: If keeping these guys as amateurs is a goal, then the endorsement plan obviously doesn't work. Additionally, you are right that it will be another blow to the concept of the student-athlete.

We have to ask ourselves why we don't think of these guys as student-athletes now. Of course, we have to be very careful of painting with a broad brush. There are plenty of big time college athletes who take their education seriously. Even in basketball, where nearly all of the best players have no intention of staying for the full four years of college, there are plenty of guys like D.J. Augustin, Emeka Okafor, and Brandon Knight who take their studies seriously. To borrow what Coach K once said in a TV interview about Okafor, these are guys that any school would want to have on campus, even if they didn't play a sport.

There are many guys who are not "real students" scattered throughout NCAA football and basketball. They are in college for one reason. They bring in dough for the university. If our rule change means these guys no longer are eligible to play, they will never see a university campus. Let's revisit one of John Thompson's old arguments against Proposition 42. Thompson argued that athletes who were marginal students could still benefit from being on a college campus. I am not sure if I agree with this position or not. Is that what a flagship university is really for? Might these kids instead be better served by starting out at a community college? Still, I respect Thompson's position, because there is an element of nobility in it.

Graduation rates for NCAA athletes as a whole is pretty good. But the universities have incentives to accept people they normally wouldn't if they can play football or basketball.

txtwstr7: I think I'll pick up right where you left off...let's talk about graduation rates.

With your endorsement proposal, you asked me to spotlight its potential problems. I'm going to ask you to do the same thing with another proposal. To me, the most intriguing idea towards solving the "pay for play" issue involves establishing trust funds or investment accounts on behalf of all football and basketball players who graduate. Carl Ehrlich previously published an article that fleshed out this idea. (ed. note: for some reason, if that link isn't working, the article should be at: http://sports.espn.go.com/espn/commentary/news/story?page=ehrlich/110107)

Before you read his article--if you haven't already--I fully admit that Ehrlich's proposal is a bit clumsy. And, yes, the article has one of the worst titles in the history of sports-writing. But I don't want you to critique his specific proposal. Instead, I want you to analyze the idea that a modified version of his plan might be the only possible solution that simultaneously preserves the NCAA's mission and also properly compensates players for their financial contributions to the university. I think Ehrlich perfectly encapsulates my own thoughts with this quote:

These are issues worth resolving, despite how daunting the transition might seem. First, we need to figure out where we want to go. Then, we can figure out how to get there. A world in which players receive the money they've earned in the process of getting a diploma is a world worth working towards.

As I mentioned earlier, Ehrlich's proposal is a bit clumsy. But I truly think the idea is fascinating, largely because it could potentially resonate with both sides of the debate. Setting up a trust fund on behalf of all football and basketball players who graduate does nothing to destroy the concept of "amateur student athletes," but it also attempts to provide those players with an eventual share of the revenue they helped produce. As of now, I cannot think of a single other idea that even comes close to bridging this gap.

Even though I feel woefully unqualified, I'd like to put forth a brief overview of such a system. The amount of money that goes into each athlete's trust fund could involve a formula related to TV revenue, gate revenue, and grades. Each of these factors would seem to lead towards an equitable result. Under this proposal, players would receive a tiny fraction of the TV and gate revenue for their sport. This money would accrue in the trust fund, with the principal becoming accessible to the player upon their graduation from the university. Players would "lose" this money if they fail to graduate, get kicked off the team, lose their NCAA eligibility prior to graduation, or transfer.

Obviously, this proposal raises a lot of issues. It would lead to some dramatic disparities in the size of trust funds between schools. It would also put an increased financial strain on the universities who are already in the red. Either of these concerns could potentially be addressed by having the NCAA regulate or subsidize the amount in each trust fund. However, that still leaves open a whole host of issues related to valuation. Should every player on the team be entitled receive the same amount? What about players who redshirt? What if the program actually lost money during the year? There is no shortage of tough questions that would need to be answered for any such proposal to work.

However, like Ehrlich, I'm not currently fixated on specifics. I'm more concerned with examining whether this is the lone "big idea" that deserves a closer look. Because, if it's not, I think we're left with the two options that we've previously discussed, which are either administering a series of incremental improvements that will leave most fans unsatisfied or officially abandoning the concept of "amateur student athletes" and explicitly allowing players to be paid.

Reggieball: I think the trust fund idea is an admirable goal. It is hard to argue against the principle of the idea. That would be like arguing against puppies and sunshine.

Do you know what they say about Canada? It is a country that works in practice, but not in theory. This trust fund idea is sort of the opposite of Canada. The problem is the part where the schools have to come up with the money. That is really my only problem. If it has to come out of the athletic budget, I wouldn't feel right if schools had to cut a few minor programs to generate the cash for football and basketball players. And taking it out of the general university budget? Tuition is already growing at unsustainable rates. The states are strapped for cash, so university budgets are going to keep getting tighter, meaning schools will have to cut costs and raise tuition just to keep going.

In a distant future where there is enough money, I am all for the trust idea. But I think for now, we are probably stuck with incremental improvements.

txtwstr7: And, in trying to bring this discussion to a conclusion, I honestly think being stuck with such improvements might be enough for me. At least, for right now.

I might feel different if I didn't think there was enough wiggle room for the NCAA to stabilize the current system. But I honestly do. In fact, I think that Mark Emmert is on the right path. As a whole, I think the media has remained overly fixated on the "no pay for play" rhetoric and missed the potential for systemic improvements associated with the proposals that are currently on the table. This article hits all the high points.

To me, those proposals don't seem like empty or pointless changes. If the NCAA authorized four-year scholarships, Cost of Attendance adjustments, higher academic standards, and tougher penalties for clearly defined major violations, I think those are all common sense steps in the right direction. The article summarizes some of the changes as allowing conferences the option of awarding "bigger, longer scholarships to athletes," which would hopefully stem the tide of misconduct, especially if conjoined with much stricter penalties for major violations. That's not as far as I might go, but it's not a bad start. And it's a start that remains completely in line with the purported mission of the NCAA, which is "to govern competition...and to integrate intercollegiate athletics into higher education so that the educational experience of the student-athlete is paramount."

That's really where everything starts and stops with me--in the current environment, can we build a workable system that sustains that mission? If so, we have to try to preserve it.

But, we've already said enough. I'm interested to see what the BON community thinks about the "pay for play" issue. If, of course, any of our readers can be torn away from discussing the latest saga in the Realignment madness.

Hook ‘Em!

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