College Athletes Should Be Paid Exactly This Much

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from Bloomberg Businessweek,

As a culture, we abhor price fixing and artificially suppressed wages. Yet for many years we have accepted them as a given when it comes to college sports, never questioning the NCAA’s policy against paying athletes, even as the schools that effectively employ them are making millions off their talents.

The edifice of this system is finally crumbling. An antitrust lawsuit filed in 2009 by a former University of California at Los Angeles basketball player, Ed O’Bannon, who didn’t appreciate the NCAA using his image in video games and not sharing the profits, is working its way through the courts, shattering a lot of myths along the way.

It’s all but inevitable that athletes will start getting paid—the only questions are how and how much. In recent years, we’ve seen a lot of ideas floated, from the introduction of small stipends to the creation of a tightly regulated intercollegiate system with strict salary caps. But there’s another possibility: The best plan might very well be no plan at all. Or, if you prefer, it’s a plan called the free market.

How would such a system work? Colleges could simply bid for the services of high school recruits. Contracts could be negotiated individually, like the contracts for coaches and athletic administrators. Some might include no-transfer clauses; others might include retention or graduation bonuses. Once the NCAA monopoly has been broken, the various conferences would be free to write rules for their respective members.

In resisting the idea of paying college athletes, the NCAA often argues that most universities are already trapped in an expensive arms race for coaches and athletic facilities. Many universities claim they lose money on big-time sports. Think of how much greater the financial burden would be if colleges had to get into unchecked bidding wars for quarterbacks and point guards, too.

If the NCAA is right and its members really are broke, the market rate for athletes isn’t likely to rise very much. But then that makes you wonder why they are fighting so hard to prevent that outcome in the first place.

If there were no artificial limits on spending, star talent would invariably become very expensive, which would discourage schools from stockpiling coveted recruits. Instead, the best athletes would be distributed more evenly throughout the various schools and conferences. The free market would also allow schools to build in academic incentives, such as financial bonuses for athletes who graduate on time—or even come back and finish their degrees after their NFL or NBA careers.

The bottom line is that once we got past the collective freakout, we would start evolving toward a more rational, fairer system. We can’t say exactly what form it would take; that’s the nature of the free market.

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