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DENVER — With the March Madness tournament right around the corner, television stations, schools and others are gearing up for another big payday. Last year, the tournament brought in $1.29 billion just in television ad revenue.
College sports are quickly becoming a cash cow for some. The NCAA made $1.1 billion in revenue in 2017 alone. However, each time the revenue is discussed, some questions whether it’s time to pay the student-athletes.
Supporters say this is about compensating players for their work. Critics say this would ruin amateurism and could hurt schools. However, one U.S. representative has a different idea for how to help compensate players.
It’s time to pay up
For former NFL player Chad Brown, it’s time to pay players for their contributions to sports.
Brown was a college football player at the University of Colorado from 1988 to 1992. The team won the national football championship in 1990. These days, Brown is a radio host for 104.3, The Fan.
In college, Brown says some of his fellow players struggled to pay for basic things and would try to save money wherever they could.
“Some guys were staying with the girls trying to lessen their rent,” Brown said. “There were some nights in Boulder when I was in school where it was oatmeal because that was all I could afford and my parents were not able to provide me with a ton of money. So, you had to scrape and scrounge to come up with things.”
These days, players are provided with meals daily, so food is no longer a concern. However, many still aren’t able to work part-time due to the demands of school and practice, which means they can’t afford to go out and enjoy college life like other students.
“Just to be able to live a normal college lifestyle, to be able to afford pizza on a Sunday afternoon, those kind of things are also setting you apart from the rest of the students on campus.”
The nature of scholarships has also changed over the years. Whereas before players made four or five-year commitments to schools, these days they have to earn their scholarship every year they play.
“There seems to be that kind of inequity there where the coach makes all of the money and gets all of the perks in the players are left with nothing essentially other than a jersey and a couple of sweat suits and maybe a watch from their bowl game,” he said.
Brown believes there is more than enough money going around to pay the athletes.
“It seems to now be at a point where there is enough money coming in from television revenue and tournament revenue that they can find a way to pay the players,” Brown said. “It’s not right to not pay the athletes considering that they are the ones that people are tuning in for.”
He also doesn’t like the idea of paying athletes for their name, image and likeness, since only the most popular players for each team would be earning money. He believes that could cause some divisions and animosity within teams themselves.
However, paying players could fundamentally change college sports since some schools would be able to pay higher salaries than others. Brown is convinced conferences would need to change as a result.
“We’ll have levels of conferences. There will be a super conference of the best schools in a particular sport where they pay their players the most because those are the schools that have the biggest track record of success and sell the most tickets and get the most television audiences,” he said.
The big question for Brown would be how to make the pay fair and equitable not only among schools but also among sports.
Players are already being paid
For Roger Pielke, a professor at the University of Colorado at Boulder, players are already being compensated. Pielke, who is the director of the sports governance center for the university, says athletic scholarships were the NCAA’s way to standardize the marketplace in 1956 and get under-the-table dealings out of the way.
When cost of attendance stipends were added, players were offered another level of compensation.
“They’re able to receive prizes if they go to the NCAA tournament with the college football playoffs, so they are compensated, but the real question is over how much and through what channels,” Pielke said.
He believes that, more and more, players are being compensated and that it might only be a matter of time before athletes are offered salaries.
“This is really a labor negotiation although nobody really frames it like that. It’s taken place in a number of court cases that have slowly but surely getting away from the amateurism that the NCAA has,” Pielke says.
Pielke rejects the idea that because only some of the sports are profitable other, less popular sports would be affected. He points to college courses as an example of how it would work.
“There are some academic departments that make a lot of money, like the business school, and other academic programs, like the English department, that don’t make a lot of money and yet we’re still able to compensate professors across those different units,” Pielke said.
When it comes to the fear that the biggest schools would buy the best players, Pielke says something similar is already happening with scholarships.
“There’s tremendous inequities already in the system,” he said.
Pielke doesn’t see salaries as something that would dramatically change the games.
“It would probably mean that coaches might take a hit, administrators might take a hit and some of the luxuries that we see associated with big-time programs might be cut back,” he said.
Overall though, he says fans and viewers would likely not notice a difference if the athletes were paid.
A different approach
For years, the debate has been whether college athletes should be paid a salary. However, this week North Carolina Representative Mark Walker has a different idea.
Instead of paying salaries, he believes changing the tax code so that they can profit off of their images. He’s planning on introducing legislation this week to do just that.
"Signing an athletic scholarship with a school should not be a moratorium on your rights to your name, image, and self-worth. We have a plan to fix college sports without asking the NCAA or our universities to pay a dollar. After nearly two years of speaking with players and thought leaders, we will be introducing the Student-Athlete Equity Act,” Walker said in a statement to Denver7.
Supporters say this would benefit the players without costing the schools or the NCAA any money.
For the love of the game… and the free education
While many current and former players support the idea of student-athletes getting paid to play, one former college basketball player is against the idea.
Cody McDavis played Division I basketball at the University of Northern Colorado and was a starter for two years. He says that as a former player and someone who came from a low-income household, he can understand the allure of being paid to play.
“Trust me, as an African-American student-athlete that does not come from means, I get that wanting to provide for your family. My mom worked three jobs growing up, and I did not have a lot,” McDavis said.
However, he believes paying players would fundamentally change the game and could end up hurting schools. McDavis even wrote an op-ed in the New York Times explaining his position.
As a student-athlete, McDavis says he was treated well; not only was he given a full-ride scholarship, his books were paid for, he was also provided with three meals a day and a stipend for living expenses.
“Moreover, I had tutors. I had a tutor at the university. If I traveled and I needed some support academically when we were on the road, I had a tutor there,” he said. “And we are not a powerhouse. We are not a well-off athletic apartment or institution as a whole,” he said.
Meanwhile, many of McDavis’ non-athlete peers were saddled in college debt and working part-time jobs without tutors or free help while in school.
“We are infatuated with this argument of whether student-athletes should be compensated when their student peers are being drowned in debt,” McDavis said.
In 2015, schools were also given the right to hand out cost of attendance stipends.
He believes there’s a misunderstanding about how much revenue schools actually bring in from sports programs.
“What most people don’t realize is that this argument is just meant for basketball players and football players, to revenue-generating sports,” he said. “Most athletic departments are not solvent; They are not generating enough revenue to overcome their expenses. At the end of the year, there’s about 25 schools that do so.”
McDavis is worried that paying players big salaries for some sports could mean that other, less profitable programs might be cut.
“We run the risk of cutting other sports, meaning that student-athletes who are working just as hard and have dedicated their lives to it will not have an opportunity to go play the sport they want at the college they choose,” he said.
Beyond that, McDavis says most college athletes do not go on to play sports professionally, so they will be relying on their education to earn a living, so the focus should be on schooling rather than sports.
“Being a Division I athlete, I understand how those pressures would increase exorbitantly if I was being paid an actual dollar figure. I would focus less on my academics and more on my athletics, and I think it’s very important we get back to this idea that education will provide the longest financial benefit for a student-athlete,” he said.
From tournament brackets to tax brackets
There’s another wrinkle that paying players could create when it comes to taxes. Right now, athletic scholarships are generally considered tax-exempt, so many student-athletes don’t have to worry about paying taxes.
“If they are paid a salary on top of their scholarship, I think it would complicate their tax situation immensely,” said Lori Davis, an office managing partner and tax partner, Grant Thornton. “They would be treated like an employee and so it would be like getting a W-2 they would have to pay federal and state income taxes.”
The more the players are paid, the higher the tax bracket they could end up in and the more they might end up owing.
Players could also be subject to non-resident taxes in states they visit to compete. So, if players travel to another state for a game, they could end up owing taxes to that state.
“That would be potentially very complicated because they could have to file numerous income tax returns,” Davis said.
She believes it could affect where the games would ultimately be played.
The taxes could also factor into where an athlete chooses to go to school. Since some states like Florida and Texas don’t have state income taxes, schools might use that to their advantage when recruiting players versus New York where the income taxes are much higher.
“Colorado has a very low income-tax rate and so our colleges and universities that are based here could potentially benefit from a recruiting standpoint,” Davis said.
Beyond salaries, if schools and the NCAA ever decided to allow student-athletes to profit off of their name, image or likeness, Davis says that would add another layer of complexity to their tax situation.
“It’s almost like they’re in a business and so it would be considered self-employment income which has another additional tax on top of the regular federal income tax,” she said.
Despite all of the complications, Davis says student-athletes would benefit financially from the salaries.
“I think overall it still benefits them, but there is a lot of other considerations as to whether that’s the best thing for sports in general and how it impacts the schools and how it impacts the NCAA,” she said.
A changing dynamic
Former college athlete and current University of Denver professor Brian Gearity says there is a precedent in American history for paying college athletes that dates back to the 1800s.
“The notion that college athletes have never been paid and aren’t paid in some form of compensation is historically inaccurate,” he said.
Gearity was a Division III football player at Carroll University in Ohio for two years before he dislocated his shoulder. These days, he is the director of the Masters of the Arts sports coaching program at DU.
He believes athletics is already being favored over academics and that student-athletes aren’t getting the full benefit of college.
“They’re missing school, and they’re missing a class. They are often funneled into lesser degree majors or fake classes,” he said. “They come out with something they’re not really interested in maybe they have a bad experience with education.”
For Gearity, schools and sports programs are already feeling the negative effects of not paying players.
“A few of the football players don’t play in the bowl games because they realize that, ‘Wait a minute my eligibility is out, I know my draft status, and I’m going to go train for that and not risk getting injured,’” he said.
But he believes it might take something radical to convince schools and the NCAA to pay student-athletes.
“If the athletes ever do unite, if the athletes ever decide we’re not going to take the field in one of these BCS million dollar bowl games or the NCAA basketball tournament, that will be a tipping point because then the NCAA can’t fill its contracts,” Gearity said.
The big question for Gearity is how athletes will be paid.
“Do you allow the free market to just take off and let colleges negotiate contracts and pay as they well? That’s one possibility. Do you put some of that funding in it’s a pot of money that the athletes get upon graduation or completion of their eligibility? Do you look at some other type of fair market value estimates?”
But his bottom line is that if college as a whole was more affordable, athletes wouldn’t feel as much pressure to play sports in college.
“If we had affordable higher education in this country at the undergraduate level, in particular, how would that change the dynamic?”
Will college athletes get paid?
The debate over whether college athletes should get paid is not new, but it becomes increasingly more relevant as tournaments bring in more money and bigger crowds.
Who will ultimately win the debate over compensation and how it will look is still up in the air.