Bowling for Dollars: Should College Athletes Be Paid?

It is college football bowl season once again. Over the next three weeks millions of dollars are up for grabs. Millions will go to the winners and the losers, and millions are there to be made through licensing, tickets, merchandising and donations. The commissioners will make money, the schools will make money, the coaches will make money, the athletic directors will make money, and the NCAA will make money. The only group that will not make money is the players playing the games. In light of all the revenue that will change hands over the next couple of weeks, it is only fitting to ask once again: Is it time to start paying college athletes?

The arguments for paying student-athletes are plentiful. The NCAA brings in millions of dollars each year in television, advertising and licensing revenue, and the schools benefit from ticket and merchandising sales and donations. Everyone seems to profit except the men and women who make it all possible by playing. The athletes who make this system possible get their tuition, room, board, books and fees covered but can't accept a penny more for their time and effort. It all seems more than a little unfair that while everyone else is getting rich, the student-athletes making it all possible have to scrounge around the sofa cushions for enough to get a meal off McDonald's Dollar Menu. Isn't it time to just end the myth of the amateur student-athlete and pay them for what they do? As the immortal Lee Corso likes to say, "Not so fast!"

Paying college athletes would present a myriad of legal issues for the NCAA and its member institutions. First among them would be the fact that by paying college athletes, whether by salary or stipend, the athletes would lose their amateur status and become employees of the institution that they represent. As employees, according to Section 7 of the National Labor Relations Act, these athletes would be entitled to form or join labor organizations and collectively bargain. The National College Players Association already serves as an advocacy group for college players across the nation, and it is not a stretch to imagine that this group, or one like it, would take the next step and certify as a union given the revenue involved in college athletics. Already graduate teaching assistants at several colleges have formed unions so there is a precedent for this sort of activity among students on college campuses.

The NCAA brings in millions of dollars each year in television, advertising and licensing revenue, and the schools benefit from ticket and merchandising sales and donations. As employees, the student-athletes would also be eligible for benefits, including workman's compensation. In the case of Waldrep v. TEIA, the Texas Court of Appeals struck down a workman's compensation claim by paralyzed TCU running back Kent Waldrep because they felt that his letter of intent and scholarship package did not make Waldrep a university employee. However, were Waldrep an employee, he would have been entitled to medical expenses incurred as a result of an on-field injury. All of the professional sports leagues in the country maintain some form of compensation for players who are injured as a result of playing. If student athletes were paid employees, the institutions that paid them would be required to do the same.

Paying college athletes would also present issues under Title IX and the Fair Pay Act. Title IX dictates that institutions accepting federal funds must offer equal opportunities to both men and women. In the Grove City College case, the Supreme Court ruled that this applied to college athletics because the schools accept federal funds in the form of student financial aid. As a result the NCAA has mandated that schools offer an equal number of scholarships to men and women. If these packages were increased to include a stipend or salary, this would mean that both male and female athletes would have to be paid. Similarly, the Fair Pay Act would dictate that the rate of compensation would have to be equal for both genders. Thus schools would have to pay both male and female athletes equally and in equal numbers.

Finally, any attempt to pay college athletes could be said to alter the educational mission of an institution and could potentially impact their 501(c)(3) tax-exempt status. Because the students would be receiving compensation for something other than an education through the university, the IRS could rule that a college's athletic department, and possibly the institution as a whole, no longer met the criteria for a tax-exempt educational institution. This would require the institutions to account for and pay taxes on all revenue derived from ticket sales, merchandising, licensing and donations. For some colleges with large athletic budgets and large endowments, that could mean an annual tax bill in the millions of dollars.

While the current system may not be fair, the evidence suggests that a hasty decision to change to a pay-for-play scenario could result in a Pandora's Box of entanglements for the NCAA and its members.

David Dubois Esq. contributed to this post, which first appeared on Constitution Daily, the blog of the National Constitution Center in Philadelphia.