How College Athletes Are Really Paid

The University of Texas Longhorns have a magnificent multi-million dollar locker room. With its flat screen displays and sleek lighting, the facility is what hardworking players deserve. Yes?

Not necessarily.

It might be the wrong way to compensate them.

College Football Pay

Traditionally unable and or unwilling to compete with pay, colleges and universities offer tuition, room, board and stipends to selected athletes. Add to that the fancy facilities where football and basketball players live, train and compete and you have a powerful recruiting tool.

The problem is remembering that they are at a school.

Here is where the economists enter the picture. They could point out that student athletes (maybe an oxymoron) have a tradeoff. Because college football can occupy 40 to 50 hours a week of a player’s time, they sacrifice study and class time.

As UCLA quarterback Josh Rosen said…

The schools and coaches also have a tradeoff. But for them we are talking about the vast revenue these athletic programs generate. And some players will wind up playing for an NFL teams. However, only 1.5% of the men in Division I play land that NFL prize.

That leaves us asking if the current system is the best one.

Our Bottom Line: The Market

Some sports economists say the market is the solution. They suggest that schools, “…simply pay the kids.” Instead, according to sports economist Andrew Zimbalist, the schools are spending “…money on everything but what a normal market would have to spend money on, which is the players.”

If a market existed, participants would get an equilibrium price that matches players with schools. The market would eliminate the “distortions” that “waste” money on facilities and force too many men not destined for the NFL to sacrifice school.

The economists who propose the switch to the market say that a relatively small number of affluent schools would get the great athletes. Elsewhere you actually could have student athletes. The market would make the decision.

My sources and more: If you read just one article for more details, this WSJ overview is ideal. Then though, this interview with UCLA’s Josh Rosen adds insight as does this CNBC analysis and this essay from a University of Chicago economist. Meanwhile, this 2017 decision from the NLRB could even let student athletes ask for pay.