Class Warfare Blog

September 29, 2017

Major College Basketball Scandal Adds to Previous One

There is currently an ongoing FBI investigation into payola in college basketball which is going to result in a number of firings (already begun) and people going to jail (coming soon). In the FBI’s investigation, a shoe company and sports agents illegally funneled money to athletes and athlete’s families in the hopes of reaping a reward later.

Asked to comment, Hall of Fame NBA player and now commenter, Charles Barkley said amongst other things “the value of a free college education has been undervalued” as part of his criticism of the players involved. I happen to like “Sir Charles” because you never have to wonder what he is thinking; he will tell you. In this specific case, though, I disagree. You see the college education he speaks of isn’t “free.”

Basketball players receive “scholarships,” with the NCAA (one of the college sports governing bodies in the U.S.) limiting the number of scholarships to 13 in Division 1 teams (the most competitive). The scholarships often cover tuition, and room and board, and a miniscule per deum, which is what Charles thinks is undervalued by the athletes who took money on top of that. The “scholarship” is really in exchange for the athlete’s services. I had friends who were in college on scholarship, who then had an accident and couldn’t play and voila, they no longer had a scholarship. The scholarship is contingent on the performance. Get cut from the squad and often there goes your scholarship. So, it is not free, in fact it is quite expensive. I played Division II basketball in college at a school which did not offer scholarships. During the season (roughly half the year) I spent three to four hours a day practicing. (Today that is minimal as there are weight and flexibility programs and team meetings, etc. added in.) This is equivalent to working a full-time job for about four months. So, an “opportunity cost” is that one cannot use that time to otherwise gain wages. (Over four years that is a years wages, plus.)

Consider the University of Kentucky basketball program, which in 2014 grossed $40 million and made a $24 million “profit.” (This is just the most obvious program I could find numbers for. Smaller programs don’t make anywhere near this much money, but …) NBA teams pay out half of their gross as salaries to players. UK pays none of this as salaries. I don’t know whether the program reimburses the university for the tuition of the players, I think “not” but it doesn’t matter, as the $24 million in “profits” goes into the university coffers. If, as in the NBA, UK were to pay its players half of what the program grossed, they would be paying the 13 players $20 million dollars in total or $1,538,000 each (note they could afford that).

If one estimates tuition at UK at $25,000 per annum and living expenses at another $25,000, then the cost of the college educations for the entire team would be $1,300,000 or $238,000 less than each player made for the university that year! Each player made enough to fund the entire team’s college educations!

This is why generalities like “the value of a free college education has been undervalued” are not helpful, because the players aren’t spending $50,000 for their education, they are spending $1,538,000 each for their educations. How is that undervaluing the cost of their educations?

Note that the program still had $16,000,000 to cover expenses, including grotesque overpayment for the coach, and would have had a $4,000,000 profit anyway were they to have done this.

Now, some of you will surely say, but Steve, those “profits” go to support the university’s other teams, the ones, unlike football and basketball, which do not make a profit. So, you are saying that exploiting the football and basketball players is acceptable because it supports minor sports? Is that what you are saying?

I mentioned I played NCAA Division II basketball. One of my years, the team made it to what was then called the Small College “Final Four,” so it had some success. We played our home games in a gym that would house about 800 spectators and students got in for free with an ID card. We often only drew 300 for a game. None of the college’s sports offered scholarships and none of the sports made a profit. None of the games were shown on TV (the source of the bulk of the monies made by college programs). The college offered these programs as part of its educational programs (plus it was good marketing as it placed the college’s name in the newspapers). The uniforms were the same one’s the team used last year. The shoes we bought ourselves. The coach taught the team as part (not all) of his teaching load with a bit extra for the extra hours involved. When we traveled we had team blazers to wear in public, the same ones that had been worn for decades. I am not saying this to show the nobility of the effort, I learned a lot and had a great deal of fun while sweating a lot and bleeding a little. The only reason the “major” colleges spend so much on their programs is because of the TV money. They are competing for the TV money because it is so lucrative. The money “earned” off of the players sweat can be used to support all of the other programs, thereby relieving the university from having to pay for them. The way I played was the way it was in the early days of college athletics. Now, TV money has made universities greedy, to the point that the highest paid public employee in every state of the U.S. is now likely to be a major college football coach. The coaches cash in, but the players, well, they shouldn’t be corrupted into thinking their participation is a job, even though other students toil away on campus, doing jobs that need doing and they get paid. And the difference is?

Hey, if the program can’t afford it, then it can’t afford it, but for the major college programs which can, well this is the big scandal. If those kids, often Black kids from very poor families, got paid a small fraction of what they made for their schools, then there would be no incentive to take payola from shoe companies and shady sports agencies.

They work. They make money for their employer (virtually the definition of economic work) and they are woefully underpaid. Pay them.

 

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