The case for paying college athletes

Abstract

Big-time commercialized intercollegiate athletics has attracted considerable attention in recent years. Popularity of this uniquely American activity, measured by attendance, television ratings, or team revenues, has never been higher. At the same time, however, several high-profile scandals exposing unseemly behavior on the part of players, coaches, and even respected higher education institutions—as well as questions about the distribution of the enormous revenues pouring into university athletic departments—have marred the image of these college football and men's basketball programs. Currently there are several legal challenges to the National Collegiate Athletic Association (NCAA) and its member institutions that may change dramatically and permanently the arrangements between the NCAA cartel, its member colleges and universities, and the "student-athletes" who play on the teams. These challenges all focus on the NCAA's collective fixing of players' wages. We describe this peculiar "industry," detailing the numerous market imperfections in both output and labor markets, the demand for and supply of college athlete labor, and possible alternative arrangements in the college athlete labor market, including the ramifications of compensating players beyond the tuition, room, board, books, and fees that some current players already receive as grants-in-aid.