[assignment] Are Universities Leveraging Indentured Servitude? NCAA Analysis

[Rough Draft] The NCAA realized $1bn in gross revenues five years ago (2017) and grossed $1.1bn in 2021, with the student-athlete deriving the lion’s share of the proceeds therein. However, and unfortunately, despite representing a disproportionate amount of the NCAA’s revenues, the student-athlete is not a beneficiary of the value bequeathed. As contextualized by Dr. Blue in Rising Expenses In College Athletics And the Non-Profit Paradox, a lack of unilateral ownership has contributed to a non-traditional structure that affects the collegiate sportsmen. Unlike professional teams or traditional businesses, the NCAA does not have equity ownership rights; but rather relies on university trusts to manage the franchisees — in a rather non-traditional manner. [1]

The lack of franchisee equity ownership construes the NCAA’s financial onus, wherein management via traditional financial instruments, such as discounting and competitive leverage, is not practiced. Instead, the ownership-hierarchy creates a micro-economy independent from traditional business-related constraints. Under the NCAA’s purview, the need to maximize shareholder value, or be fiscally responsible/culpable, is not applicable because there is no vested equity-ownership in the NCAA.

The NCAA further monopolizes its economic position by guising anti-competitive practices under the precepts of NCAA defined collegiate-Amateurism. Amateurism or the loose approach to defining unpaid sportsmanship is outlined by the NCAA in Bylaw 2.9 The Principal of Amateurism [1], wherein

‘Student-Athletes shall be amateurs in an intercollegiate sport, and their participation should be motivated primarily by education and by the physical, mental and social benefits to been derived.’ [bylaw, 2.9]

Defining one’s motivation as the law is dehumanizing to the participant and sets precedence wherein failure to resolve bylaw 2.9’s stipulations (by not being motivated) would somehow implicate the collegiate participant.

NCAA Bylaw 12.1.2, Amateur Status

Just as disturbing as Bylaw 2.9 is Bylaw12.1.2 [3], which imposes harsh stipulations in which the NCAA recognizes amateurism status[3]. The unforgiving bylaw states student-athlete would lose their status as an Amateur if they accept any external proceeds encompass . The proceeds defined in the bylaws include any monies from royalty payments, such as endorsement sponsorships. Though colloquially, Amateurism is defined by unpaid sportsmanship, unlike the NCAA, the Olympic version of Amateurism allows some monetization respective to the participant sportsman[4]. The NCAA strictly forbids such participant ineligibility if found guilty. Furthermore, barring the collegiate sportsman is not only anti-competitive it also imparts a double standard within the student body. Suppose a computer science student engineers a mobile application and subsequently profits from the App-Store proceeds — should the student face similar administrative repercussions as the collegiate sportsman? Is it fair university presidents are granted unilateral access to the funding collegiate sports produce? Should they also be allowed a portion of the revenues our hypothetical mobile app realizes?

Sources:

[1] Rising Expenses in College Athletics and the Non-Profit Paradox

https://athleticdirectoru.com/articles/kevin-blue-rising-expenses-in-college-athletics-and-the-non-profit-paradox/

[2] NCAA Bylaw 2.9 The Principal of Amateurism

[3] NCAA ByLaw 12.1.2

[4] The Olympic Show Why College Sports Should Give Up On Amateurism.

https://www.theatlantic.com/entertainment/archive/2012/07/the-olympics-show-why-college-sports-should-give-up-on-amateurism/260275/

[5] Amateurism Certification && Agent Representation

http://fs.ncaa.org/Docs/eligibility_center/ECMIP/Amateurism_Certification/Agent_Representation.pdf✎ EditSign✎ EditSign✎ EditSign✎ EditSign✎ EditSign✎ EditSign

[RESPONSES]

Hello Brittany,

I appreciate you addressing the concern of student compensation- or the lack thereof — for the collegiate-sportsman. In terms of compensation, though, I would argue the remittance tendered is

tangible on a more granular level. Unlike cash-based remittance, the other compensation methodology commonly employed — such as subsidized tuition and the prospect of increased exposure to professional leagues — could be better suited for the collegiate sportsman.

Remember, the university is a college first, then it is sports-directive. And when colleges subsidies a student’s tuition, they are essentially ‘putting up money in perhaps a zero-sum game. Money could lead to scholastic disenfranchisement and increase university dropout

rates. The added variability in adverse outcomes would ultimately yield

the school nets a 0% yield on its investment — especially if the student fails to meet tuition obligations thereafter.

Therefore, proponents (and yes, I have taken the devil’s advocate to your position) against the monetary-based remittance system could perhaps argue that both the college and the collegiate sportsman would be better positioned without the tangible economic incentives (cash payments to the student-athlete.) The argument would be based on fears of increasing student scholastic deterrence and the net effect on ROI.

Furthering the university woes is a salient commonality among the student-athletic body — the typical student-athletic is young in age and perhaps may be financially illiterate. Therefore, given aforenoted, an influx of inflows to the student’s bank account could compound the distractions already incurred from being an active sports player/student. In essence, the unintended consequences of paying for student athletics could outway the intended consequences.

Thanks for reading,

Adel Al-Aali

Michael,

Though I agree collegiate sporting participants (chiefly the sportsman themselves) should receive compensation, I would impose the question of how much compensation should be received, and from what sources of revenue should the remuneration be derived?

Contrasting the NCAA’s hardliner definition of Amateurism “ Student-Athletes shall be amateurs in an intercollegiate sport, and their participation should be motivated primarily by education and by the physical, mental and social benefits to been derived.’ [bylaw, 2.9]

However, unlike colleges, the Olympics can only compensate sports players via economic means. Paralleling benefits, both institutions can offer global exposure to the sportsman, but, the University can offer subsisided tuition too. Transversely, the caveat of offering subsidized tuition to the collegiate sportsman in a way fulfills tendered remittance.

Thanks,

Adel Al-Aali

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Adel Alaali

Adel Alaali

College Guy, Construction Worker, Curious Mind.