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Subversion of the Academy by the NCAA

2011 August 11
by Guest

by Robert E. McCormick and Robert D. Tollison*

Two great American institutions are about to crank up. Freshman and their older classmates will soon start returning to campuses for fall classes. Soon thereafter or about the same time, fans will fill stadiums and the 2011 college football season will begin. These two events come together almost naturally and have for over 100 years. The former may be one of the best examples anywhere of competition among universities and colleges, but the latter is surely one of the best examples of a cartel. Recent athletic resignations and firings at Ohio State, Georgia Tech, and now most recently the University of North Carolina demonstrate that the corrupting influences of the NCAA cartel on the academy have reached the highest levels of our public universities. Doubtless there are few people on earth who care less about the University of North Carolina in Chapel Hill than us (since it is a prime competitor in intercollegiate sports), but in spite of this, the time has come to stand up and be counted on the athletic scandal that has engulfed UNC-CH and so many other institutions of higher learning in our country (including Georgia Tech and Ohio State). UNC-CH is not just a university, it is regularly rated as one of the top five public universities in the United States.

What is the root of the problem here? We assert it is the enormous economic rents, or free money, that have been created by the NCAA cartel. Moreover, no college or university can be expected to withstand the ill-gotten gain that lurks underneath the NCAA banner. The NCAA is a cartel of the major athletic universities in the United States that sets wages, playing conditions, and other aspects of intercollegiate athletics. Most prominently of these is a restriction on payments to football and basketball players. These two sports create billions of dollars in local and national revenues via gate receipts, TV contracts, and ancillary merchandise, not to mention millions of dollars annually at member schools in donations by alumni and other supporters of athletic programs.

Coaches sign multi-year multi-million dollar contracts while players get tuition, room and board, and recently, only because of an important court case (White v. NCAA), some pocket money to cover the cost of living. Big chunks of these revenues also go to support other men and women athletic teams on campuses, swimming, track, golf, soccer, and the like. None of this would be possible but for the overarching cartel agreement between all of the major U.S. colleges and universities operated under the umbrella of the NCAA.

Both of us have long held, along with numerous other economists (such as Gary Becker and Robert Barro), that the NCAA’s cartel harms the market, the world, and the athletes, but now we are prepared to claim more. To wit, this crisis in athletics puts the American system of higher education at risk.

Despite our earlier disclaimer, UNC-CH is an incredible academic institution, a virtual colossus of graduate education, research, and professional education. Yet with all its storied history and social importance, the school has put its institutional credibility and brand name at risk by succumbing to the perverse incentives created by the cartel, a cartel whose primary function is to maintain a façade of amateurism on the one hand while aggressively pursuing commercial profits on the other. Never mind the morality of the arrangement. Focus instead on what this temptation has done to the University, and remember that this has been happening at lesser schools for a long time. Now that it has reached the ranks of most elite universities, it is hard to argue that any school is immune from becoming ensnared in the inevitable trap that lies in the huge gulf between amateur inputs (the lowly paid players) and professional outputs (massive TV contracts, alumni donations, and ticket prices).

Hear us clearly, we are NOT arguing to pay players. We are lamenting the diminution of the reputation of a top ranked public university and the warning signal that it sends about the dangers of the incentives created in this case. We believe in amateurism, deeply. But we believe that it should apply broadly to the coaches, the fans, and all the rest of the participants in intercollegiate sports. If amateurism is a shrine, then let us all worship it. The fans should get to see the games for nothing or nearly so (the costs of facilities and game day services). The coaches should be faculty or volunteers as they are in Little League and in local neighborhoods. It is not amateurism, but the business of intercollegiate athletics is a growing cancer bound to infect other storied American institutions of higher education.

Where does the fault lie? It lies plainly on the shoulders of the NCAA cartel. We propose that our school, Clemson, and the rest of the schools in the ACC leave the organization, sit down, take stock and decide whether the Ivy League approach is better for the ACC (no athletic scholarships) or whether the players should receive reasonable compensation. We do not take a position on the issue. Each league within the NCAA should do the same, and we doubt that they will all choose the same course. Some will go the Ivy route, others the payment route. And that is as it should be. There should NOT be one authority in control of almost all collegiate athletics in the United States. Competition is salutary, and it should prevail both on and off the field.

Cartels are a bad bargain. They raise price to consumers, reduce output and social welfare, and enrich one class of participants at the expense of another, creating envy and strife. The NCAA cartel is especially perverse because it disadvantages young people (often from challenging backgrounds) to the advantage of adults. And worse, it is morally corrupting to these same young people, compounded by the fact that it derives from the same university institutions society has charged to nurture them to adulthood.

At present, coaches, even those trying to live by the rules, daily confront moral dilemmas and choices. But the nature of the restrictions creates two sets of rules (written and unwritten), and our young college students, both the athletes and their classmates, are not being taught to play by the rules. They are being taught, “everyone cheats, we got caught, it is no big deal.” Paying under the table is okay. Having tutors write term papers is okay for athletes who are working their rear ends off to practice especially if they are good and the team is winning.

Students are being taught that ends matter, but means do not. Our educational system is built upon honor, integrity, and the search for truth as bedrocks. Yet these same foundations are washed away on a regular basis by phenomenal dollars made available by the cartel. What is a young person to believe? That it is wrong to crib on a test or plagiarize a term paper, but okay to lie to the NCAA investigator? That it is right and proper to offer a helping hand to those less fortunate or in need, but wrong to do so if they have signed an athletic scholarship? Our universities need to stand for our culture, and our culture should not be about lying, half-lying, deviousness, and cheating.  There is only one way to end cheating- resolve the conflict between amateurism and professionalism, either by making both sides professional or both sides amateur. But the current situation is unsustainable and puts institutions of higher education at risk.

We contend that the moral fiber of the university is one of its most powerful social virtues. It helps bring young people to adulthood with a care and concern that things are done correctly and on the up and up ethically. There is a clear positive implication of our argument. Cheating teaches cheating, and it is a mistake to think that our kids will not watch what we do instead of what we say. The scandals that now infect the best universities in the land will almost surely lead to more and more academic dishonesty and disregard for the basic traditions of the academy if something does not happen to reverse course. Cheating in the athletic department begets cheating in the classroom and perhaps generally  in life. This is a prediction of our argument albeit a depressing one.

It is critical to note that we are big fans of the coexistence of athletics and academics. Our  research speaks loudly and clearly on this. We support athletics as part of university education and think the two together make for the best organizational arrangement. Our cry is NOT about athletics, but about the NCAA cartel that creates the rents and free money that shred the moral underpinnings of our home, the academy.

A la Ronald Reagan, we say tear down the wall around truth and dignity. Clemson, UNC, Georgia Tech, and all the rest should refuse the financial inducements offered by the NCAA. Return to amateur intercollegiate sports, or pay the players. Nothing less than the integrity and quality of our universities is at stake.

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*We are Professor Emeritus and BB&T Scholar and J. Wilson Newman Professor of Economics in the John Walker Department of Economics at Clemson University. We can be reached at sixmile@clemson.edu and rtollis@clemson.edu respectively.

6 Responses
  1. michael c permalink
    August 11, 2011

    Well written and reasoned article, and I would agree with almost everything you said. However, I’d like the explore the one point you made a little deeper. As an undergrad and later a researcher for a small private university that still competes in FBS yet attempts to have a selective student body (Rice), the conflict between academics and athletics was enormous. I will argue that the tension between the two would tear apart leagues as well: “Each league within the NCAA should do the same [decide amateur vs pro], and we doubt that they will all choose the same course. Some will go the Ivy route, others the payment route.” What happens when we apply this to individual schools?
    With some schools academically unrigorous / pro-sport, and others focused on academics, the urge to move the entire conference one way or another is a powerful force. Add in the large/small and public/private dynamic, and I can’t see Duke, BC, Clemson, GTech, and possibly the weaker football schools like UNC agreeing to the pay-the-players solution, while FSU and Virginia Tech would likely push against the pure-amateur model. The ACC already throws the regional model away, so what is left is the academics that unite something like the Ivy League together, and I am not sure they are similar enough in the ACC to hold these schools together. Wouldn’t we expect to see a complete realignment of schools, not just conferences, if the NCAA cartel was broken? No doubt the long-run would be better, but the difficulty of making any progress is, to me, greatly compounded by the uncertainty that individual schools would face were they to be forced to choose one or the other. Could Duke (and Duke Alumni) really be convinced to leave a conference with UNC for one with Vanderbilt, WashU, JHU, University of Chicago, etc? Forcing academic qualifications equal to the regular undergrad student body on GTech or Duke would put them at a huge disadvantage versus FSU, where the median SAT score is 35o pts lower.

  2. bobby permalink
    August 11, 2011

    Michael, i take your point, to a point. Conference realignment would almost surely be part of the transition, and I agree that it would be costly, painful, and not a pretty sight. However, i think that Clemson, GA Tech, UNC, NC State, UGA, UF, UVA, VT, and some more similar academic institutions, primarily focused on educating youth, with a competitive intercollegiate athletic program, could survive and flourish.

    I don’t have a clear or even muddy crystal ball, but my guess is that if a reasoned and reasonable number of schools decided that their primary mission was education and that the business of athletics was tarnishing that effort, schools would align more on academic similarities than regional ones.

    The ACC, formed almost 60 years ago when the old Southern Conference broke up, was, at least partly, based on regional, not so much academic similarities. Today, with TV, internet, and jet airplanes, the need to be physically close is less important, even if it still is, than it was more than a half century ago.

    Intercollegiate athletic competition is vital to education at almost all levels of higher education, with exceptions noted, UChicago, MIT, Cal Tech, and the like. Both Bob and I have written extensively on that as have many non-academic folk. As conferences realign, i would hope that academic mission would play as important a role as athletic competition. we will see whether university mothers and fathers agree or not. i can only hope so, but i fear not.

    The worst case outcome is schools become increasingly unwilling and unable to teach right from wrong, honesty, and integrity, because of the business of cartelized athletics which creates so much free money, most especially for those who work around the edges, bend the rules, or worse, lie and lie. Let’s hope that Duke, Vandy, William and Mary, and the like can find a way to keep athletics a big deal on their campuses, without purging the right lessons of life that should be part of their curriculum. Then UNC, Clemson, GA Tech, UGA, and their likes can also play the game that suits their students, faculty, alumni, and significant others.

    All said, i agree it will be painful, but the treatment, painful as it will be, is better than the disease, in my opinion.

  3. Chris permalink
    August 12, 2011

    I’m not sure how using examples of cheaters supports the theory that the system is broken. UNC and OSU are 2 of the last schools I would trust under either of your proposed options to either A. truly demand amateurism by their fans/staff or B. pay their players ethically. They’ve already broken rules. Find a school that has painfully followed the guidelines that would benefit from them being changed.

    As a long-time college fan, I would love to see the game become less “sketchy”, if you will, but absolutely can not see where paying players will ever be a good idea. First of all, good luck getting the academic community and tax-payers behind paying ALL athletes with school funds. If you are speaking about allowing endorsement deals and commercialism, that is a giant can of worms one would open. What takes precedence – the commercial shoot at Nike in Oregon for your employer or a class function? If a player signs with Under Armour or Adidas, whose medical staff are they now using? Speaking of, do the “paid athletes” now pay their own medical expenses? How about their insurance? (Let’s also keep in mind that there are very FEW players in college athletics with real Madison Avenue appeal. The general public and media would have a field day with the “rich” getting richer. No one wants to see Tim Tebow, Reggie Bush, Austin Rivers and Tyler Hansbrough being the college athletes making the money.)

    IMO, changes do need to be made – coaches salaries decreased, ticket prices lowered, but I also think the punishments for breaking the rules should be steeper. If a player cheats or lies for entrance, let them pay back their education. If a coach cheats, let them take the punishment with them wherever they go, in addition to the school.

    There is a lot of money going around (too much) and I understand the thought that somehow student/athletes are being mistreated, but as someone who values the non-tangibles of the college experience, I disagree that they are not receiving fair value. There are avenues any of these athletes could take to play professionally instead of attending college, but they realize the value of the exposure and networking they are gaining. College athletics may be the best college internship out there.

  4. Barry Duffman permalink
    August 12, 2011

    To me one of the bigger problems is that football and basketball players have no better options to reach the professional level than to sign on with a university. Baseball players have the option of signing a professional contract right out of high school, but in order to showcase themselves to the professional leagues, football and basketball players need the NCAA programs. If there were no restrictions from the NFL or NBA, or if there were other viable minor leagues available for kids who really do not want to be in college, much of the problem would be reduced. However, the NFL and NBA have no incentive to change (in fact, the incentive is to keep the status quo or even make the players stay in college longer) since they do not have to fund a minor league system as baseball does. They can let the NCAA act as their developmental league. This restriction of players options in my opinion is a big part of the problem.

  5. August 19, 2011

    “Any informed, fair-minded individual can see that there are some unfair practices at work in college athletics, when compared with the standards of fairness established by state high school athletic associations and America’s professional leagues.”

    From It’s Possible! Realignment and Playoffs –
    College Football’s Opportunity by Scott N. Galloway

    Exclusivity is part of the problem, not the solution. The elitist, exclusionary practices of individual schools, seeking only what is best for them, has led us to this place. Einstein said, “We can’t solve problems by using the same kind of thinking we used when we created them.” If state high school athletic associations can be inclusive to recently-opened schools and objectively place these schools in conferences, colleges can to. Properly administered, athletics has a place at the collegiate level. The solution is to ensure that it is properly administered.

    “Galloway provides a sensible way of restoring sanity to big-time college football at the same time he outlines a championship playoff system. His reorganization of conferences and schedules would cut costs, boost revenues, and bring parity to a system that currently favors select universities. This would create the outcome uncertainty and excitement that characterizes the NCAA basketball tournament and show universities that Division I football could be sustainable. For anyone concerned with the future of college football, this book provides food for thought and a basis for constructive discussions.”

    –Jay Coakley, Ph.D., Profession Emeritus Sociology Dept., University of Colorado, Colorado Springs, National Association for Sport and P.E. (NASPE) Hall of Fame

  6. V Anderson permalink
    August 19, 2011

    Scott Galloway has written a book about some of this. His solutions are perhaps not as aggressive as those suggested, however it seems the re-alignment scheme he presents might fit well with the issues raised. The title of Galloway’s book is “It’s Possible – Realignment and playoffs – college football’s opportunity”. The book is available @ Amazon, and I think is well worth considering. A year ago the book seemed rather radical, but today it is well placed in the middle of the spectrum of ideas for fixing the college football mess. The Ivy league and the SEC enjoy similar benefits of their schools being relatively near each other. This radically diminishes the cost of travel to games as well as recruitment. The cost of operations is part of what drives the money side of the problem. When a successful program spends hundreds of thousands of dollars on travel to play one game, distance IS an issue. Cost of travel is part of the cost of operation problem. The super leagues which have evolved in successive attempts to make more money, have in reality, made the enterprise less lucrative – at least for the schools. These super leagues also put the players on a stage they seem less than ready to deal with emotionally, and perhaps otherwise – hence the collection of issues involving player behavior as well as academics.

    The cost and expense of a university education relative to value is now being questioned on many sides. These issues might be best addressed by a tiered system which directs high school students toward two year colleges, from which successful students would be directed to an upper tier of universities. The college leagues could involve schools fairly near each other, as well as amateur athletics. The upper tier would involve more developed students and players who would necessarily have a better overall perspective, as well as appreciation of their position in the grand scheme of things. This plan would have two year colleges recruit from high schools, while the university would recruit from the colleges. The governing authority, NCAA or otherwise would have to enforce the tier system, and professional leagues would have to recruit from the University Leagues.

    Prep school would start in 8th grade for four years, with what is now the high school senior year spent at college. In many places this is already happening academically – the best high schools allow their seniors to take classes at nearby community colleges. Student athletes at the two year college level would continue to be amateurs. Student athletes having successfully completed two years of college and recruited by university tier teams would have their financial needs met to some reasonable level. To prevent university tier athletes from skipping off to the pros they should have to finance their education just like everyone else – with the stipulation that upon career ending injury or graduation, their education loans would be paid off from a trust fund financed by university sports departments.

    This plan is not part of the Galloway book, however it would address both academic and sports issues, as well as expand opportunities for both student athletes as well as the those who might choose to use their services.

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