Today Freakonomics posted a pay-for-play plan for college basketball players. As one would expect from economists, it boiled down to “no rules, let the free market decide”. Considering that we may be 5–10 years and a coin flip away from this no being a thought exercise and becoming a legally mandated negotiation, I have three simple requests for anyone trying to come up with an idea for how to pay college athletes.
1. Come up with something more than “the free market”
In no major American professional sports league are players paid their free market value. Salary caps, luxury taxes, maximum and minimum contracts, roster limits, arbitration, rookie contracts, entry drafts, age limits, and free agency restrictions all skew compensation away from free market value. The same goes for most developmental and minor leagues as well.
Colleges still have to agree to be part of whatever league(s) or association(s) that would run professional college sports. Major college powers cannot agree to let each other decide what to mail to prospects, how many texts or phone calls coaches can make, or who can recruit. They are not going to agree to let each other decide how much each player can be paid.
There will be restrictions, there will be limits, and there will be objections and challenges those limits. A good plan should explain why colleges should agree to those limits. Not to mention why players will agree or why colleges would win the negotiation.
2. Start with football
Basketball is tempting as a starting point because the numbers are easier to work with. There are only 13 scholarship players, 15–18 total. For a long time there was also a big pot of additional money (NCAA TV revenue) to work with, although the transformation from BCS to playoff in football has closed that gap.
But any pay-for-play plan has to start with football. Football is where most schools bring in the bulk of the revenue and spend the bulk of the money. True, a few schools would start with basketball then work on paying football players. But aside from the blue bloods (UCLA, Kansas, Indiana, Kentucky, Duke, North Carolina) there are not many FBS schools that would.
So any pay-for-play plan that includes universities paying athletes has to start with a system for football, then see what is left over for basketball. If the answer is nothing or basketball cannot be run profitably, whether schools still sponsor the sport has to be considered.
3. Explain where the money comes from
Within a college sports team, the coaching salaries will often be one of the biggest expenses. Naturally that is where people have gone to find money to pay athletes. And if athletes had to be paid and there was less total money available for everything else, coaching salaries might go down.
But it is just as likely that coaching salaries will stay high, even increase. If everyone is paying athletes roughly the same amount, then the coach will still be a major differentiator between programs. As long as athletes have to be recruited to college and are not assigned or drafted, the best coaches are still worth a lot of money to universities.
At the same time, athletic departments run a bunch of programs that are simply costs. Some have bloated administrative staffs. It is not a safe assumption that universities will cut pay to the coaches of programs that bring in money but keep everything else. Lower coaching salaries need to be explained, as do which staff/departments or which sports get cut.