NCAA Reaping the Benefits of Athletes’ Labor

8/7/2019 NCAA Reaping the Benefits of Athletes Labor

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By Ben Abitz and Eric Mannes


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In early December 1905, Chancellor Henry M.MacCracken of New York University conveneda meeting of 13 institutions to initiate

changes in football-playing rules. At a subsequent meeting December 28 in

New York City, the Intercollegiate AthleticAssociation of the United States (IAAUS) was

founded by 62 members.


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The IAAUS officially was constituted March31, 1906, and took its present name, theNCAA, in 1910. For many years, the NCAA

was merely a discussion group and rules-making body.

These rules kept getting more and morestrict to the point that athletic programs

have employees simply to assure compliancewith all NCAA regulations.


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This shows revenues of $636,295,428 and a$23,345,866 profit for the NCAA in 2009.

This number is even misleading because the

system is set up to take from the moneymaking sport Football and distribute it tosatisfy Title IX.

Additionally, individual athletic departments

make revenues on football in addition to theNCAAs proceeds.


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Additionally, according to Lawrence M. Kahnin the Journal of Economic Perspectives,College football and college men's

basketball generate professional-levelrevenues. Total ticket revenues for footballand men's basketball were $757 million in1999, which exceeded ticket sales for

professional baseball, football, andhockeythat year.


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The broadcast revenue from the NCAA men'sbasketball tournament alone was $564million in 2005, which exceeded the

broadcast revenues for Major LeagueBaseball.


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Many will claim that athletes arecompensated in the form of scholarships, butwe must delve deeper into this to show the

true injustice of the current system. In a1996 article in The Economist, it is pointedout


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As for the athletics scholarships, these arenot wages in the normal sense. They run forone year at a time the scholarship can be

revoked--no matter how good the athlete isin class. Athletic scholarships, then, arestrictly payment for sport; but the athletehas no power to negotiate his wage And,

since theyhave been so well protectedagainst commercial exploitation, they will

not have made a dollar from their greatestskill.


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The NCAA pays all athletes the samescholarship price. This does not allow thebest or most productive workers/athletes to

get a fair compensation for the value of theirservices.

It is obvious that player performance impactsthe revenues of individual athletic

departments and the NCAA benefits from thisperformance as well.


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We compared the Total Revenues of AthleticDepartments and the Bowl Appearances aTeam has had over a 5 year period 2003-2007

A team received 1 point for a regular bowlappearance meaning a .500 record on theseason or better

A team received 2 points for a BCS bowl

appearance meaning either a conferencechampionship or at least a 10+ win season.

0 for no bowl appearance


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TEAM Average RevenueBowl (2=BCS 1=Bowl 0=No

bowl) Past 5 Years

Michigan 57,463,603 8

Penn State 53,766,038 6

Ohio State 65,162,179 9

Wisconsin 37,733,698 6

Iowa 37,998,729 5

Michigan State 43,826,312 3

Purdue 21,641,794 4

Minnesota 24,275,875 5

Indiana 21,774,074 1

Illinois 25,370,427 2

Northwestern 21,080,405 3


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Total Revenues= 12010133+ 5345801 BowlPoints (+)

P-value 0.002002

R-squared 0.6722

Correlation Coefficient 0.819882


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SUMMARY

OUTPUT

Regression Statistics

Multiple R 0.819882

R Square 0.672206

Adjusted R

Square 0.635784

StandardError 9653253

Observations 11

ANOVA

df SS MS F Significance F

Regression 1 1.72E+15 1.72E+15 18.45625178 0.002002148

Residual 9 8.39E+14 9.32E+13

Total 10 2.56E+15

Coefficients

Standard

Error t Stat P-value Lower 95% Upper 95%

Lower

95.0%

Upper

95.0%

Intercept 12010134 6563046 1.829963 0.100501442 -2836507.069 26856774 -2836507 26856774

Bowl (2=BCS

1=Bowl 0=No

bowl) 5345801 1244346 4.296074 0.002002148 2530895.686 8160707 2530896 8160707


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Bowl Appearances are a clear indicator ofplayer performance because it deals withnumber of wins during a season. It can be

seen then that player performance is more2/3rds at cause for the Total Revenues of theathletic departments.

For each additional bowl appearance, an

athletic department can expect $5,345,801more in revenues. And twice that$10,691,601 for a BCS appearance.


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According to Fitt, The system that hasdeveloped gives only the NCAA and colleges aseat at the bargaining table, excluding the

voice of the student-athlete. This exclusionis inappropriate given the dramatic impact ofthe rules on the daily lives and career arcs ofthe student-athletes.


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We interviewed Edward Imeokparia, aSafety at Florida State University. Heestimated an in season time commitment

of 25 hours per week not including traveland competitions. Over a roughly 16-week season, this adds up to over 400hours. In addition, Imeokparia reports

15h

ours per week out of season forroughly 30 weeks, which tallies to 450hours. Total over 850 hours a year spentin addition to the NCAAs Main purposeacademics


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Student-athletes are expected to yield nearlytotal control to an educational institutionand a third-party organization for their

professional and personal decisions, self-employment autonomy, and rights to theirimages, name, and reputations.


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But other hyphenated students who servedual educational roles--such as the student-musician, the student-actor, the student-

artist, and the student-dancer--are notexpected to make the same sacrifices.

An artist can sell their artwork, an actor canwork in a school performance and also

perform professionally without expulsionfrom their college performing group. It is alla doing of the NCAA.


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NCAA Football Players contribute nearly asmuch time as professionals to their sport andare compensated inordinately less for their

labor. The average NFL Player makes 1.4 million per

year (MEAN) compared to $50,000 at themost expensive institutions.

1,400,000/50,000= 28 An NFL player makes 28 times more than an

NCAA player when contributing nearly thesame time commitment.


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It is clear NCAA football players are notcompensated fairly for there contributions totheir athletic departments and the NCAA.

NCAA holds monopsony power over theathletes and is unfairly limiting them fromselling their skills on the free market.


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Markets: Cartel Behavior and Amateurism inCollege Sports Author(s): Lawrence M. KahnSource: The Journal of Economic Perspectives,Vol. 21, No. 1 (Winter, 2007), pp. 209- 226

Published by: American Economic AssociationStable URL:

http://www.jstor.org/stable/30033708Accessed: 11/04/2010 14:53

"Brawn, not brains." The Economist

(US) 338.n7959 (March 30,1996): 22(1). AcademicOneFile. Gale. URSINUS COLLEGE. 11 Apr. 2010

.


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Fitt, Virginia A. "The NCAA's lost cause and thelegal ease of redefining amateurism." Duke LawJournal 59.3 (Dec 2009): 555(39). AcademicOneFile. Gale. URSINUS

COLLEGE. 11 Apr. 2010.

National Collegiate Athletics Association andSubsidiaries; Consolidated Financial Statements.

Rep. NCAA, 31 Aug. 2008. Web. 12 Apr. 2010..

NCAA Reaping the Benefits of Athletes’ Labor

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