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No, Bernie, Collegiate Athletes Do Not Need a Union

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When we last saw Bernie Sanders at the Joe Biden inaugural bundled and wearing a mask, some of us hoped that Bernie would still be masked—and silent. Unfortunately, as it becomes increasingly clear that the Biden administration is wanting to transform the USA into a progressive paradise, Sanders has joined the movement in which no institution is safe from an enforced state makeover.

The latest from Sanders is the introduction of a bill that would classify collegiate athletes as employees of the college or university they attend, and it also “encourages” athletes to become unionized so they can enjoy the “right to collectively bargain.” According to CBS Sports:

College athletes would be considered employees who are able to collectively bargain for basic labor rights if a new Congressional bill introduced Thursday morning eventually becomes law.

Sens. Chris Murphy (D-CT) and Bernie Sanders (D-VT) have sponsored the College Athlete Right To Organize Act in the Senate. The bill defines "any college athlete as an employee if they receive direct compensation" from their school in terms of scholarship money.

That presents a direct challenge to the NCAA's [National Collegiate Athletic Association] long-held operating principle of amateurism that has allowed it to maintain control over college sports for decades.

The bill would prohibit any scholarship that would keep an athlete from collectively bargaining for their rights. Scholarships would be defined as compensation that would give athletes the right to collectively organize and have a say in their working conditions. Companion legislation was also introduced in the House of Representatives by Representatives Jamal Bowman (D-NY), Andy Levin (D-MI), and Lori Trahan (D-MA).

While one doubts that this particular scheme will be successful, nonetheless it sets a precedent that will be hard to ignore in the future, especially given that the US Supreme Court voted 9–0 to force the NCAA to change its limits on compensation for athletes. The present herd of Jacobin progressives that hold much of the political power in this country and govern many of its key institutions like education and the media are not going to go away if this present bill fails to accomplish its purposes—and they are decidedly not attempts to improve the lot of scholarship collegiate athletes. Moreover, the SCOTUS decision will increase the “inequity” that progressives claim to hate.

Before going further, I will point out that nearly fifty years ago, I was a scholarship track-and-field athlete at the University of Tennessee, and I had a relatively successful career. I held some school records in high school and college and still am on some of the program’s all-time performance lists, and I was part of six Southeastern Conference championship teams and two NCAA championships, and I had the good fortune of earning both All-American and All-SEC honors.

This doesn’t make me an expert on collegiate athletics, but my experiences have given me some insights into that world and, more importantly, provide me a smidgen of authority to speak out against Sanders’s latest attempt to wreak havoc in this country. I can say without hesitation that Bernie is flat-out wrong in his pronouncements that collegiate athletes represent an “exploited” class of people who need to be “rescued” by politicians and union bosses. Yes, I am aware of the rhetoric that comes from the sports media, but the reality of NCAA Division I college sports is very different, and even though I am more than four decades removed from my stint at Tennessee, I have stayed in touch with my alma mater and have made many visits to the track and the coaches offices since my graduation. The reality of college sports does not match Sanders’s rhetoric, some of which is contained in the proposed bill:

College athletes face exploitative and unfair labor practices by the National Collegiate Athletic Association … and its member institutions, primarily through the denial of the basic economic and labor rights of such athletes, which the NCAA and its member institutions have justified by defining college athletes as amateurs.

The NCAA and its member institutions have denied college athletes a fair wage for their labor by colluding to cap compensation; they maintain strict and exacting control over the terms and conditions of college athletes' labor; and they exercise the ability to terminate an athlete's eligibility to compete if the athlete violates these terms and conditions….

To establish more equitable terms and conditions for college athletes' labor, college athletes need representation of their own choosing to negotiate collective-bargaining agreements with their respective colleges and the athletic conferences that help set rules and standards across an entire league.

Sanders was a highly regarded distance runner in high school (he went to high school with Walter Block) but did not pursue college sports. (One suspects our country might have been better off had he been on a college track team and have become something other than a politician, but that is water under the bridge.) His “knowledge” about the poor, exploited collegiate athlete is derived more from his ideology than his experience.

So, what about the “exploited” collegiate athlete? First, while I will defend the current system to a certain extent, I do not extend that grace to the NCAA itself. This is not because of any “hypocrisy” on the part of NCAA officials—although they clearly have earned this label—but rather because in its zeal to “protect” the so-called amateur status of collegiate sports, the organization has created a Byzantine bureaucracy that would rival anything from the former Soviet Union.

A highly regarded head track coach of a mid-major university told me that in order to have a prospective athlete visit on campus, he had to prepare twenty pages of documents to give to the NCAA and its representative at his university. (Several years ago, I served as the NCAA representative for my employer, Frostburg State University, which then was in Division III sports, which does permit its institutions to offer athletic scholarships. I still serve on the university’s athletic board.)

The NCAA has so many rules governing recruiting and regulating any benefits that athletes may receive that it is impossible for any member institution to keep from violating regulations. Compliance with these rules is a nightmare. Consider some of the violations:

  • A football prospect driving with his family to visit the campus of a D-I institution had the car break down about twenty miles from the university. An assistant coach picked up the player and helped the family call for assistance. The NCAA rules this an “improper benefit.”
  • Three student athletes (at the University of Oklahoma) received food in excess of NCAA regulation at a graduation banquet. The three had graduated from the school but returned for an additional season of competition. The players were provided pasta in excess of the permissible amount allowed. Resolution: the three were required to donate $3.83 each (the cost of the pasta serving) to a charity of their choice in order to be reinstated. The department provided rules education to applicable athletics department staff members.

The list, unfortunately, is endless and the mentality that accompanies calling out these so-called transgressions is worthy of all the ridicule that can be heaped upon it. One is tempted to dismiss these things as the products of people who have too much available time, but there really is logic in what seems to be petty regulations on steroids. (I guess better the regulations be steroid engorged than the athletes, who are required regularly to undergo drug testing.)

One truism in economic analysis is that ridiculous regulations tend to have perverse incentives behind them, and the rules are not irrational as one might think, given the players and the reward structure behind them. While many economists have tried to model the NCAA as a private cartel in which the rules are the enforcement mechanism, I believe that it is more accurate to say that we should frame major collegiate athletics as a regulated industry much like passenger air before deregulation in 1978, and trucking and railroads before 1980.

Pre-deregulation, the Civil Aeronautics Board set rates for passenger airlines as well as the routes for the more profitable “long hauls” between major cities. The arrangement blocked entry into the industry and all but guaranteed that airline firms would be profitable. In return, airlines serviced smaller cities, subsidizing these unprofitable routes with profits, much like AT&T used profits from its long-distance service to subsidize local service (when AT&T was given a legal monopoly by the Federal Communications Commission).

Because they were not permitted to compete via lower airfares, the airlines competed on the intensive margins, resorting to the hiring of young, beautiful women as flight attendants (I remember those days well), good food (yes, that is hard to believe today), and one airline even had a piano bar for first-class passengers. Flying was for the well to do; everyone else took the bus or passenger trains (at least until the early 1970s).

Likewise, we find college sports engaged in massive cross-subsidizing, using profitable sports such as football and men’s basketball to subsidize other “nonrevenue” sports. (I remember being constantly reminded in college that our sport didn’t bring in revenue to the athletic department. It was one reason I didn’t resent the special perks football and basketball players received, knowing that they were helping to fund my scholarship and our team’s enormous success.) Even that might not be enough, and the subsidies are extended to the conferences and to the money the NCAA spreads out after its money-making basketball championships, aptly named “March Madness.”

Like the airlines that couldn’t compete via pricing, college sports must find other ways for teams to compete for key resources (athletes) than offering them a better financial deal. Thus, we see the advent of the facilities “arms races” in which colleges and universities build athletic venues that would have been scorned as unnecessary by previous generations of coaches and athletes but today are deemed vital necessities for programs wanting to be competitive.

Furthermore, with Title IX strictly enforced as a quota system, there is almost no profitability whatsoever with women’s sports, save women’s basketball in a few universities that historically have had successful winning programs. One is safe to say, then, that college athletics overall cannot be classified as a money-making venture even when there are entities in that system that are profitable. While athletes can be called (economically speaking) factors of production that might fit into something that creates what Murray N. Rothbard called “psychic profit” (a successful sports team can bring “pride” to a university and serve as a rallying point), there is no way one accurately can claim that athletes are employees of a university’s department of athletics. At very best, at least for most colleges and universities, collegiate athletics is a loss leader, not a money-generating enterprise.

Thus, to classify collegiate athletes as employees and then demand those employees be unionized is a logical and economic absurdity (although people like Bernie Sanders have made careers out of promoting absurdities). Yes, some athletes receive in-kind subsidies from their colleges or universities (called athletic scholarships), but athletic scholarships are similar to academic scholarships, under which students are expected to keep a certain grade point average (GPA) and stay out of trouble. With athletic scholarships, athletes are expected to perform at certain levels, stay academically eligible, and not create problems on or off the field.

That being said, there is one important difference between students receiving athletic grants and those that have academic or, say, music scholarships: the latter do not have limits placed upon what they can receive in compensation outside the in-kind benefits they receive from their university while athletes cannot enjoy that same privilege. For example, a student on a violin scholarship can play in an outside orchestra or ensemble and be paid. (I remember throwing money into a basket in a New York subway station while a string quintet from Juilliard entertained us.)

Collegiate athletes are much more restricted. For example, a collegiate basketball player cannot be paid for performing in a summer league or have ever received payment for playing a sport. Say someone played at the lowest level of professional baseball for one summer and then wanted to go to college and play basketball. To that, the NCAA says, “Nyet.” That summer of making a tiny amount of money has “contaminated” this athlete for life, at least where college athletics are concerned, even if we are dealing with a different sport than the one for which the athlete was paid.

These are the kinds of rules that turn people against the NCAA and help encourage lawmakers like Sanders to intervene. Nevertheless, they are not proof of oppression and exploitation of hapless athletes. Let us take first the issue of compensation or scholarships. Division I FBS (Football Bowl Series) football teams have eighty-five scholarships, which means that most of the players you see on the field have what we call “full rides.” Most basketball players, men and women, are on full rides as well, although the lineups for football and basketball also include “walk-ons,” or nonscholarship players.

Other sports have fewer scholarships and generally split them up among players, often into what we call half rides. For example, when I was at Tennessee, our team had twenty-eight scholarships, which meant we could have a large roster because we could have a large core on full rides and still plenty of money to dole out to others. (The women had no scholarships when I was in college, although that would change soon enough.)

Today, track teams are permitted up to 12.5 scholarships for each team, which means rosters are smaller and most of the athletes are not recipients of full rides. The same goes for the other sports classified as “nonrevenue.” Even in that situation, however, athletic scholarships hardly count as “poverty wages” or whatever term Bernie Sanders might use. Yearly tuition, fees, and room and board at a place like Duke University is about $70,000, so a full athletic scholarship hardly falls into the zero-compensation category. Likewise, out-of-state costs at many Division I state universities are likely to be close to $50,000, a rate of pay that few students that age can attain in the regular world of work. (Many D-I sports teams recruit out of state as well as in their home states.)

Furthermore, one of the assumptions behind the rhetoric that Sanders and other critics are spouting is that athletes are the modern-day equivalent of slaves working in Roman salt mines. (For that matter, Sanders believes that ANYONE working nonunion for a private employer is the proverbial Roman salt mine slave.) However, being part of a Division I athletic team not only is a symbol of personal status on campus, but also provides a lot more than just scholarship money for athletes. Most of my teammates from nearly a half century ago now are lifelong friends and we value these relationships highly. We also keep relationships with current members and coaches from the Tennessee track teams. The notion from Sanders that we were mere slaves toiling for an undefined benefit to the university and receiving nothing in return is perverse and, unfortunately, par for the course where Sanders is concerned. One comes to expect this kind of nonsense from him: destructive, hateful rhetoric that when it helps form laws and policies, they always make things worse.

So, what if the colleges start paying players? First, what does that mean? As I have noted before, a college athletic scholarship is valuable, and because the vast majority of athletes that use their entire college eligibility graduate, these “exploited” athletes also receive the value of a college education. (Yes, I am fully aware of the problems in higher education; however, I am pointing out that most college athletes do not walk away empty-handed, as Sanders and his ilk want us to believe.)

Because an athletic scholarship is a thing of value, I doubt that paying athletes directly instead of awarding grants is going to make much difference. Because the majority of athletes play in nonrevenue sports, there really is no measure of discounted marginal revenue product that would easily fit a payment schedule. I had a good career as an athlete, yet I doubt that my DMRP was anything but negative, and that goes for most (if not all) of my teammates. We didn’t generate much revenue and, instead, were subsidized by revenues from football and men’s basketball.

In any collegiate D-I athletic program, there are relatively few athletes that one actually can say bring in the revenues. Zion Williamson, who dominated college basketball the one year he played for Duke University, comes to mind. While Duke didn’t win the NCAA championship that year, Williamson was a major draw and I’m sure that his worth, athletically speaking, to Duke was in the millions of dollars.

While Williamson did not “officially” receive anything but tuition, fees, room and board, one hardly can say he was “exploited” or treated like “slave labor.” First, I’m sure that people associated with Duke, not to mention Nike, which all but openly sponsored him, made sure that his family was well compensated, albeit quietly to avoid an NCAA investigation. Second, Williamson could have played in the NBA’s G League and earned a six-figure salary, well above the value of his athletic scholarship and probably any under-the-table money he might have received.

However, the G League could not have provided Williamson the same publicity as he received dominating game after game while being viewed by millions on ESPN. There is no doubt that Williamson received a much better rookie contract in the NBA than he would have received had he done his time in the G League. At worst, Williamson’s year at Duke could be seen as his enjoying deferred compensation.

To get an idea of his massive presence in college basketball, he suffered a sprained knee early in a game with the University of North Carolina when one of the shoes Nike had provided him ripped under pressure. Nike’s stock value dropped $1.1 billion the next day.

I repeat, contra Sanders, that college sports did not victimize Zion Williamson, despite the claims otherwise. Furthermore, had Duke paid him anything close to his value to the university and its athletic programs, it would have been a figure that Sanders would have deemed immoral, since he claims to be against any sort of economic inequality.

In fact, if a market-based payment system were to be implemented by the NCAA, it would have to reflect the realities of what people actually are producing. Male athletes would have to earn more than most female ones (although there are exceptions; Paige Bueckers of the University of Connecticut women’s basketball team comes to mind), and a relatively small number of athletes would receive the lion’s share of the income. In other words, the only compensation scheme that would not exploit the Zion Williamsons of college sports would have to reflect the same kind of inequality that people like Sanders claim to abhor.

My sense is that Sanders sees something different, a system in which everyone receives the same pay no matter what sport and the entire apparatus is wrung through collective bargaining. Yet that would change nothing regarding the so-called exploitation issue. If the Sanders bill were to become law, it surely would ramp up the costs of fielding college sports programs, and higher costs certainly would mean fewer teams. Moreover, the “equal pay” provisions of the law would mean the star athletes, the ones people really do pay to watch, would receive compensation much less than their actual economic contributions, which really would be an act of exploitation. In short, it would be an unworkable disaster akin to the Bolshevik Revolution and its aftermath that Sanders effusively praised through most of his political career.

There is one more problem, one that I have not seen addressed by any analysts, and that involves federal and state income taxes. College scholarships, whether they be for sports or for academics, are not taxed. As I noted before, a student on a full ride at Stanford or Duke is receiving a financial package worth at least $70,000 a year and probably more, without a penny of it going to the IRS or the state comptrollers.

College and university employees, however, are not tax exempt and must pay federal and state income taxes along with Social Security and Medicare taxes. If Sanders were to succeed in having all NCAA Division I athletes reclassified as employees, then not only would these students be liable for income and payroll taxes, but many of their so-called perks such as payment for travel costs and per diem expenses could be grist for the taxation mill.

One doubts seriously that students would be enthusiastic about paying double-digit tax bills for their scholarships. It is one thing to raise the union fist to show fake “solidarity” with the proletariat, but it is quite another to receive a sizeable tax bill for the whole thing. Furthermore, one doubts that the courts would be willing to cut out a huge tax exemption for NCAA athletes, especially given the greedy proclivities of the IRS.

To put it another way, the Sanders proposal comes with all of the hidden costs and other unwanted surprises that one would expect from a politician who has supported totalitarian governance for all of his political life. One suspects that once student athletes would come to realize that Sanders had pulled a bait and switch aimed at increasing tax revenue, and then publicly declared their opposition, Sanders and his allies would regard the new dissidents the way that Bernie’s political forefathers saw the demands of the Kronstadt sailors in 1921: a threat to the regime that the IRS would put down quickly.

Author:

Contact William L. Anderson

William L. Anderson is a professor of economics at Frostburg State University in Frostburg, Maryland.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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