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ECONOMICS OF COLLEGE SPORTS.
Term Paper ID:22593
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Essay Subject:
Athletics as big business, role of TV, illegal payments, examples of scandals & punishments, pressure to turn pro, academic issues, reforms, sanctions, legalizing athletes' pay.... More...
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11 Pages / 2475 Words
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Paper Abstract:
Athletics as big business, role of TV, illegal payments, examples of scandals & punishments, pressure to turn pro, academic issues, reforms, sanctions, legalizing athletes' pay.
Paper Introduction:
Introduction
College sports are big business. A college or university with a successful football or basketball team can leverage its sports success to increase its donations from alumni, and television revenue from televised football and basketball games can significantly contribute to a school's operating budget. Because of this, recruiting efforts can be intense as schools seek to attract the most promising high school and community college players, and the motivation to violate rules set down by the National Collegiate Athletic Association (NCAA) can be high. This research examines the economic impact of sports, particularly football, on colleges and universities, recent scandals involving players and coaches which have rocked the NCAA, and considers whether or not players at the collegiate level should be paid for t
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Auburn initiallyheld that the tape recordings had been spliced together, and denied anywrongdoing. [16]Basralian, 118. [15]R. "College Bowl Games Without Sponsorships." Amusement Business, January 16-22, 1995, 5, 13.Walters, John. [2]Ibid., 13. Such scholarships are not necessarily based on academicmerit, or even on financial need, but are based instead on the athlete'sperformance in the given sport (most often football or basketball).[6] The problem with scandal arises when schools or their supporters crossa line into the area of direct payments to students. The eventual fate of these players is not disclosed, due in partto the fact that the system has not been in existence for long; howeverresearch suggests that players who are not drafted do not return toschool.[2 ] The majority of student athletes never reach the professional level,which suggests that education should remain the most important goal of anyathlete. Under the rule, underclassmen can regain theircollege eligibility so long as they have not signed with an agent orparticipated in tryouts with a professional team. Given his ability and his record (his high schoolteam, not known for its basketball program, won three state championshipswhile Webber was in attendance), Webber would command a high salary in theNBA. For some, the emphasis in the term "student athlete" is on"student," while for others, it is on "athlete." Much has been made of therevenue that collegiate athletics brings to universities and colleges, butsome research suggests that most schools' athletic departments not only donot contribute significantly to the schools' general fund, many actuallyrun at a deficit, resulting in taking money away from other programs at theschools.[17] Football and basketball, in particular, are perceived by some to bethe farm system for their professional leagues. Texas has a strong football program which suffered frombeing banned from television as a result of scandal at its campus. At the same time, there was some question that the penaltiesthemselves might not encourage some alumni to offer payment in order toattract the caliber of players required to rebuild the damaged SMU program. For example, Hartwick College inOneonta, New York reinstated a football program in order to raiseadditional funds from tuition. [6]Douglas Looney, "Tiger Rag," Sports Illustrated, November 25, 1991,32. [8]William Rhodes, "What's Unique is that Ramsey Came Forward,"Sporting News, August 3 , 1993, 7. At the heart of the controversy is the exact role of college athleticprograms. Webber basedhis decision not on the academic opportunities that would be missed if heleft school, but on the advantages to be gained if he joined theprofessional ranks. However, other students are permitted to work, and be paid, intheir chosen fields, and it can be questioned why athletes are denied this. For someathletes, the attraction was being able to play at SMU, which has a strongfootball tradition and which was still likely to attract nationalattention. [5]Joseph Basralian, "Financial Controls," Financial World, February14, 1995, 121. News &World Report, January 8, 199 , 5 . Southern Methodist University (SMU),which plays in Dallas, suffered the unusual punishment of the so-called"death penalty," which meant that the school was prevented from competingduring the 1987 season. When the investigation was concluded,in the early 199 s, the school was placed on probation by the NCAA, whichthe school protested violently, suggesting that the probation hurt itsability to attract good players and thus would be detrimental for farlonger than the probationary period. "Probation Videos." Forbes, November 7, 1994, 18.Waddell, Ray. E. "The Pigskin Brings Home the Bacon." Sports Illustrated, October 19, 1992, 5C.Woodbury, Richard. [12]Ibid., 16. This indicates that entering the draft resultsin players not returning to school if they are not offered contracts withinthe NBA. Some observers have questioned the effect that a rule passed in1994 by the National Collegiate Athletic Association (NCAA) has had onunderclassmen considering leaving school to enter the National BasketballAssociation (NBA) draft. [4]John Walters, "The Pigskin Brings Home the Bacon," SportsIllustrated, October 19, 1992, 5C. "Financial Controls." Financial World, February 14, 1995, 121.Blum, D. If the NCAA were to impose a salary cap, and if procedures could be putinto place which promised equitable implementation, paying athletes abovethe board may eliminate the scandals that currently trouble the NCAA as awhole. IIbid. There remains the question of whether it should be permissible forschools to overtly pay promising athletes. [14]Ivan Maisel, "Texas A & M Now on Notice Until 2 4," SportingNews, January 17, 1994, 47. One year after the suspension, a number of the athletes were payingtheir own expenses without assistance from the school or other sources (atthe time, costs were estimated at more than $13, per year). Amember of the Southwest Conference, Texas A & M was one of six teams thatthe NCAA placed on probation during the 198 s, and one of the drivingreasons behind having a state-wide rule that all Texas high school athletespass their classes or be disqualified from playing high school sports.[14] The problems at Texas A & M highlight the controversy that surroundsthe NCAA's sanctioning policy. Given the NCAA's long history with enforcing even basic ethicalbehavior, however, there is the strong possibility that even morequestionable behavior would result. [13]William F. The eligibility can beregained for 3 days after the NBA draft. Chris Webber was a member of the Michigan Wolverines basketball teamwho considered turning professional after his sophomore year. This tookplace before the 1994 NCAA rule that would have permitted him toparticipate in the draft and return to Michigan to continue his playwithout penalty if he did not fare as expected in the draft. Television is willing to pay large sums of moneyfor the rights to televise college games, and the NCAA basketballtournament has become a multi-million dollar tournament that can giveparticipating schools significant boosts in their athletic (and other)budgets. Asthe scandals have spread through the various conferences, the debate overthe level of pay that athletes should receive has increased. [11]Ibid. "Tiger Rag." Sports Illustrated, November 25, 1991, 3 , 32.Maisel, Ivan. Lee Sullivan, "Probation Videos," Forbes, November 7, 1994, 18. Some went to Europe to play while the fate of theothers is not made clear. The NCAA encourages schools, forexample, to grant scholarships to student athletes in order to permitstudents who might not otherwise be able to afford a college education toreceive one. Other athletes recognized that they were not destined to playin the professional leagues, but considered the competition to be goodexperience for their future careers.[13] Another school which has had severe problems with the NCAA is Texas A& M (the Aggies). The effect of the suspension meant that remaining players left theschool in order to play at institutions where their efforts would not betainted by the school's reputation, and where they stood a better chance ofbeing spotted by scouts from professional teams.[1 ] However, the effect of the scandal reached beyond devastating theability of the football team (which has yet to regain the prestige it hadprior to the payoff incidents). Because of this, recruiting efforts can be intense asschools seek to attract the most promising high school and communitycollege players, and the motivation to violate rules set down by theNational Collegiate Athletic Association (NCAA) can be high. "What's Unique is that Ramsey Came Forward." Sporting News, August 3 , 1933, 7.Sullivan, R. "Cryin' Time in Texas." Sports Illustrated, September 3 , 1991, 52.Rhodes, William. This deteriorated to a standard "no comment" response as theinvestigation was pursued and as coach Pat Dye was implicated.[7] Ramsey's allegations were eventually substantiated by other Auburnplayers, including Vincent Harris, who commented that assistant coachesgave him cash payments on request (varying from $5 to $6 per incident),and that the college paid more than $4 in parking tickets that Harrisreceived in 1986. Given the role that the colleges and universitiesfulfill, there are some who hold that student athletes should be removedfrom the academic programs altogether and funded directly by theprofessional teams which eventually hire them (once they have receivedtraining at the collegiate level). "Texas A & M Now on Notice Until 2 4." Sporting News, January 17, 1994, 47.Reed, William F. At the same time, college football bowl games have becomeincreasingly attractive to corporate sponsors, with the result that viewersnow watch the FedEx Orange Bowl, the USF&G Sugar Bowl and the Mobil CottonBowl.[1] The 1995 Sugar Bowl, a game between Florida and Florida State,resulted in each team receiving $4.45 million from the sponsors. News & World Report, January 8, 199 , 5 -52.Gordon, S. Faculty members lobbied for, and received,strong academic reforms as a part of the school's restructuring. [17]Shannon Brownlee, "The Myth of the Student Athlete," U.S. The reason for the severe sanction was a level ofcorruption throughout the football program that was unprecedented at thattime. At the time that these reforms were implemented, the school recognizedthat it had a difficult road ahead of it as it tried to turn around the waythat the athletic program was run. However, the school continues to compete, and players continue tobe attracted to the program. Where baseball hasdeveloped a farm system that is independent of American colleges anduniversities, the National Basketball Association (NBA) and the NationalFootball League (NFL) depend on college athletes to feed their professionalteams. However, commitment to reform came fromthe highest level of administration (the president) who suggested thatwhile SMU was not intending to turn out "Rhodes scholars," it did intend tohave athletes who were competent academically.[11] The athletic directorwho replaced Hitch (Dough Single) also suggested that there need not be acontradiction in having a winning football team and a "clean" program.[12] The long-term success of SMU's reform program remains in question.Certainly there is the problem of controlling the actions of alumni who donot report directly to the school's administrators, but the severepenalties that the NCAA imposed suggest that alumni will be reluctant torisk another "death penalty" for the sake of providing remuneration toplayers. "Rule Lets College Players Enter NBA Draft Without Losing Eligibility." Chronicle of Higher Education, May 25, 1994, A36.Brownlee, Shannon. Few players are drafted directly out of high school, and there areno other proving grounds for athletes who want to play at the professionallevels of these sports. One teammate was hoping that Webber wouldcontinue to play with Michigan because the team had come together and couldwin the national championship at least once and maybe twice in its currentconfiguration. While a school canoffer a scholarship to a student, and pay for his housing and his books, itcannot provide a stipend, cars, or a cash signing bonus while remainingwithin the NCAA rules. ----------------------- [1]Ray Waddell, "College Bowl Games Without Sponsorships," AmusementBusiness, January 16-22, 1995, 5. Eric Ramsey, a student at Auburn, taped conversations proving that hewas receiving illegal payments from boosters as well as from assistantcoaches during his playing years of 1987 through 199 . "The Myth of the Student Athlete." U.S. [19]Ibid. This restricts the revenue that the collegecan receive, and also makes it difficult for the school to attract starplayers. While the NCAA needs to promotean image of ethical behavior, it also needs to promote sports and encouragethe large revenues that television rights and successful athletic programsbring. The rule applies only tobasketball, not to the other sports that the NCAA oversees, and is designedto provide a safety net to those players who are not drafted or who decidenot to accept a spot with a professional team.[19] The immediate consequences of the rule were that 74 underclassmenentered the NBA draft between 199 and 1994; of these, only 29 weredrafted. In addition, student athletes are required todisclose their financial situation in an attempt to make it more difficultfor them to accept payoffs from either coaches or supporters of theathletic programs. This wasan increase from the $4.175 million received for the 1994 game (alsobetween Florida and Florida State).[2] With these sums of money at stake,it is no wonder that some teams will stretch the rules regardingremuneration to their players and offer free housing, scholarships tostudents who would not otherwise be eligible, and other perquisitesdesigned to make potential star athletes choose one school over another. Despite these protests, Auburn wasundefeated in the 1993 season (under Terry Bowden, who replaced Pat Dye).For his trouble, Eric Ramsey received death threats and ended up leavingthe university.[9] But Auburn was not the only school that has encountered difficultieswith regard to NCAA rules violations. The other players did not return to school, but did not have aprofessional contract. There are many reasons for this, butchief among them is that colleges and universities serve as the minorleagues for the professional teams. Some creative alumni have circumvented thetelevision prohibition by marketing videos of the Aggies' games; a season'ssubscription costs $2 5, and the company marketing the videos reportsexcellent sales, with more than 12 subscriptions.[16] Should Student Athletes Be Paid The scandals that have rocked the NCAA are a result of the pressuresto have winning football teams, and stem from the idea that studentathletes are amateur athletes and should not be paid for their efforts. [1 ]Ibid. [18]D. In addition, Harris said that he had automotive repairsperformed without having to pay for them; in fact, he never learned howmuch the various repairs cost.[8] Other Auburn players denied the charges that the school was engaged inlarge-scale corruption with regard to its players, but the damage toAuburn's reputation had been done. The opportunity to play with outstanding teammates is oneof the reasons that athletes choose one school over another, and the large-scale defection of players to the professional leagues makes it moredifficult for schools to attract highly talented individuals.[4] A successful athletic program for a local college or university can bebeneficial for the surrounding community, and such benefit is not limitedto small colleges or communities. Lee. [9]Richard Woodbury, "Rebuilding a Shattered Team," Time, November 14,1988, 14. For years, the NCAA relied on fines to discouragesuch practices, but the organization has taken a more proactive approach inrecent years in order to discourage rules violations. [3]S. [7]Ibid. Even those who are drafted by professional teams may not besuccessful, or may suffer injuries which put their careers in question.From this standpoint, providing scholarships can be helpful to students inneed. Introduction College sports are big business. College Sports as Big Business College football and basketball are the most lucrative of the sportsthat are played at the school level. A college or university with asuccessful football or basketball team can leverage its sports success toincrease its donations from alumni, and television revenue from televisedfootball and basketball games can significantly contribute to a school'soperating budget. Bob Hitch, athletic director, and Bobby Collins, the football coach,both resigned as a result of the scandal, and the school's president, L.Donald Shields, also left during the middle of the scandal, although hecited health reasons. Athletesare now required to have SAT scores more in line with the student body as awhole, and the athletes' academic performance is monitored more closely,with players declared ineligible if they fail to maintain an acceptableacademic performance level. There can also be considerable pressure on student athletes, as well,who must consider whether it is better to remain at the college level, orto enter the professional leagues at the earliest possible time. Gordon, "Child's Play," Sport, April 1993, 79. These critics suggest that professionalteams could essentially "sponsor" collegiate programs.[18] Critics of the current environment also cite the ambivalence that theNCAA has in policing its member schools. Reed, "Cryin' Time in Texas," Sports Illustrated,September 3 , 1991, 52. E. This researchexamines the economic impact of sports, particularly football, on collegesand universities, recent scandals involving players and coaches which haverocked the NCAA, and considers whether or not players at the collegiatelevel should be paid for their efforts. The school expected to raise more than$8 , from students drawn to the football program, but the localcommunity also expected to reap a significant economic benefit from theadditional sporting activity.[5] Recent Scandals Part of the problem in identifying scandals regarding football playersat universities is the problem of defining what constitutes scandal, andwhat constitutes acceptable behavior. When discussing his decision to join the NBA, he indicated that theallure was the money and the cars that the high salaries make possible, notthe attraction of a high level of play or of competition.[3] The early departure of such a valuable player can have a remarkableeffect on the rest of the team. If outright payment werepermitted with no salary caps, large schools with large budgets would beable to attract better players, and the emphasis on education might be lostaltogether. While proponents of the NCAA policiessuggest that it has the power to hurt schools economically, critics citethe fact that Texas A & M has been sanctioned seven times in its history.For these observers, the sanctions that the NCAA can impose are not severeenough, and certainly are not of a caliber sufficient to discourageunscrupulous behavior by coaches and supporters of the athleticprograms.[15] Texas A & M is now sanctioned until well into the next century (2 4),and is banned from television. "Child's Play." Sport, April, 1993, 79.Looney, Douglas. Baseball regularly recruits collegeplayers, as well as players from high school, but its farm system(including AAA ball), makes it less dependent on the schools thanbasketball and football. "Rebuilding a Shattered Team." Time, November 14, 1988, 14, 16. BibliographyBasralian, Joseph. Blum, "Rule Lets College Players Enter NBA Draft WithoutLosing Eligibility," Chronicle of Higher Education, May 25, 1994, A36.
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