Upon hearing today's news that NCAA executive Oliver Luck and ESPN analyst-cum-college athlete's rights champion Jay Bilas are going to square off in an Oxford-style debate at Texas A&M next Tuesday over the proposition "college athletes should be allowed to be paid," I couldn't help but fall into a daydream about the upcoming event. In my reverie, the event featured Luck, Bilas and—because economists like me are pretty weird—a three-year-old who can only ask "why?" and whose questions must be answered truthfully.
Here's how it went:
Bilas: First, I'd like to thank the event organizers for properly framing the debate as "should athletes be allowed to be paid?" rather than "should athletes be paid?" The first question is about letting willing schools and willing athletes meet in the marketplace, the second is about some centrally-planned Politburo-style system, and I would not want to advocate for the latter.
Bilas: Because the essence of the issue is that this is about economic rights. I think each college, or arguably each conference, has the right to choose what they are willing to pay athletes to attend their schools and to play sports for them. And if a given school or conference chooses to offer nothing more than a grant-in-aid—an athletic scholarship, often abbreviated GIA—I think that school or conference should have that right.
Where I think that right stops, however, is at the boundary of the school or conference. Beyond that, when one conference imposes its vision of the right amount of pay on another conference, no amount of gauzy rhetoric about educational missions and the revered tradition of amateurism can change the fact that there's price-fixing going on, and that said fixing violates the basic rights of college athlete to choose among competing offers—just like everyone else in our society with marketable skills.
So by all means, College X, say you oppose paying athletes and act on those principles. I am all with you. I am just against the current NCAA system that collectively boycotts any school or conference that chooses a different path.
Luck: But that's chaos! We can't have some schools paying more than others and playing on the same court or field!
Bilas: But you do that now—you have FCS football teams playing FBS teams, even though the FBS teams can pay more to each athlete and also spend a lot more on all the other factors that affect winning and losing: facilities, coaches, administration. Also, both FBS and FCS teams play teams from the Ivy league, where athletes get no scholarships. They play military academy teams, where athletes are employees and receive annual salaries.
Luck: Wait, there are paid employees playing football and basketball for our military academies? Really? That doesn't sound very amateur.
Bilas: Correct. Cadets at West Point are paid more than $900 per month as freshmen and that amount increases annually. Midshipmen at Annapolis are employees of the U.S. Navy and receive similar amounts. The Navy describes it like this:
"They pay no tuition or fees, and their room and board is provided to the student at no cost. All students are employees of the U. S. Navy. They are paid a salary which is sufficient to cover the cost of their textbooks and other necessary expenses with a small amount remaining to use at their own discretion."
Bilas: They get paid a salary because the military—unlike the NCAA—doesn't believe that education and compensation somehow contradict each other, or that having money in your pocket makes it more difficult to learn.
Come to think of it, I hope the military doesn't believe that. It wouldn't be very good for national security if our military academies were knowingly hurting the education of our future admirals and generals by paying them while they are in school and playing sports. Forget violating the amateur ideal. Would that count as treason?
Luck: The military academies are special cases. We can't kick them out of football just because they use paid athletes. Twitter users would slaughter us, for starters.
Bilas: Why not apply that same idea to any other school that might want to pay its players?
Luck: Because if some non-military schools started doing it, then everyone would.
Luck: Well, because schools try to please their customers and customers want the teams they root for to do well, so schools would use economic competition to attract better athletes, in order to please their customers.
Bilas: Wait—you think if schools were allowed to pay athletes, they would do so because it would please their customers?
Luck: Of course!
Luck: Because everyone likes winning. Winning sells tickets.
Bilas: Let me make sure I heard you correctly. You think that if, say, the SEC were permitted to pick whatever pay level it wanted for its teams, that level would be higher than the current NCAA limit, right?
Luck: Yes. Otherwise, why would we even bother with our current rules preventing them from doing that? It would be silly to spend millions of dollars in federal court defending rules that no one would violate if we simply got rid of them tomorrow.
Bilas: And the SEC would do this because they think their fans and alumni want better athletes?
Bilas: Would any conference stay amateur?
Luck: Maybe. I don't think every school could afford to pay top dollar for the best talent.
BIlas: Does every school get top talent now? Do MAC schools have the same recruiting success as Big Ten schools?
Luck: No, of course not.
Luck: Big Ten football is more prestigious, has better coaching, nicer facilities, and offers more TV exposure. So, basically, anyone who has an offer from a Big Ten school and MAC school is much more likely to choose the former.
Bilas: So you think the Big Ten will simply continue to win those recruiting battles. Okay. Will that means that the MAC-level of athlete might be willing to attend a MAC-level school for somewhat less than the market price for Big Ten starting players?
Luck: Well, I guess so, sure. If all the best athletes go to the power schools—
Bilas (interrupting): —like they do now!
Luck: Yes, like they do now. When the second-tier schools come seeking the second-tier athletes, I guess the price might be lower.
Luck: Because the revenue benefit to a MAC school for a starting athlete is lower than at a Big Ten school, so the market price for his services is probably lower, too.
Bilas: Ok, so let's recap—if athletes were allowed to be paid without schools being boycotted and athletes being declared ineligible, then big schools might start paying their athletes a lot of money, right?
Bilas: And less well-heeled schools would have second choice on athletes, like they do now, but they would also be able to acquire their services for a lower level of pay.
Bilas: And schools would be choosing to do this, because they felt that having paid players on the team would generate more consumer interest than if they didn't?
Luck: Nope. Amateurism is what consumers want. Amateurism drives consumer demand.
Bilas: Okay, but you told me that if schools could choose whether to pay their athletes or not, the top schools would do so.
Luck: Because these are smart businesses, and they can sift through rhetoric to see what actually sells. The schools that think their fans care mostly about amateurism will choose that, but the major power football and basketball programs won't be among them.
Bilas: Ok, so which schools and conferences would choose amateurism, then?
Luck: We think everyone should. Also, it simply would be wrong to expose athletes to financial decisions when they're choosing where to attend school. They should choose schools based on educational considerations only.
Bilas: But that's not the case for non-athlete students. Different schools charge different tuitions, and high schoolers and their parents already have to weigh the quality of education against financial considerations, right?
Luck: Yes, but unlike students who we are charging to attend, college athletes shouldn't have to make those sorts of choices.
Luck: Because if talented athletes were allowed to choose schools based partially on how much money those schools or their boosters offered them, 60-plus years of NCAA rhetoric on how the success of college sports is due to amateurism would collapse. Then, we'd have to admit that we basically just don't want to pay because paying is less profitable than not paying. We'd also have to admit that not paying is pretty easy when you monopolize virtually all sources of demand for athletes' skills, creating a relatively captive labor force with few options, which in turn leaves more money for everyone else in the system. (Laughs). Of course we wouldn't want to expose our rhetoric to a market test.
Luck: Because it would kill amateurism as a shield against normal business conduct.
Luck: Because obviously we don't believe our own rhetoric. If we did, we wouldn't be afraid to let schools act in their own best interest, because we'd know they would choose it. The market test would ruin everything. The Ninth Circuit of the federal judiciary actually said it pretty well in the O'Bannon v. NCAA appeal decision: We can't let the market cross the line from amateurism to small amounts of pay because once the rhetorical line of "amateurism is essential" is disproven, the result will be a market that pushes athletes to their full value. That means less money for me, conference commissioners, coaches, the shareholders of campus construction firms, assistant athletic directors for "compliance," and so on.
Bilas: So what you're saying is we can't allow athletes to be paid because if we did allow it, schools would do it, customers would still watch it, and if they didn't, the market would correct itself and pay would shrink down to whatever level consumers can stomach, just like it would in any other field?
Luck: No, I am saying that we can't allow athletes to be paid because amateurism.
Luck (exasperated sigh): Because I am the Dad and I say so, that's why.
And ... end scene. Look, when Bilas and Luck square off, Honesty Toddler won't be available. So all dreaming aside, I have no idea how things will go. I very much doubt Luck will be so forthright. Still, I hope Bilas can push Luck to answer the only question that really matters: if amateurism is so popular, why can't it stand on its own in the college sports marketplace?