So a billion dollar "non-profit" organization can't find the money to pay their athletes a decent wage? John Oliver explains why it's so weird that the NCAA pulls in so much money without paying the athletes.
NCAA president Mark Emmert says NCAA athletes are students above all else. The NCAA has a different mission than the NBA or NFL. The NCAA says it's a non-profit, dedicated to student-athletes—with an emphasis on the student part.
It's an organization that was founded over 100 years ago for the purpose of protecting student-athlete well-being, providing the approximation of a level playing field and providing safeguards around the nature of intercollegiate sport. And it's done that through this voluntary, high democratic process ever since in a really remarkable fashion. It's a very unique enterprise.
Fewer than 2 percent of NCAA athletes end up going pro. The NCAA says paying students would effectively make them employees, and subject student athletes to restrictions and regulations that could hurt their education. The beauty of the college sports is that it's just students who are competing against each other, not athletic professionals.
One percent. All the others can use their skills in internships, in the summer, just as you described, because they are engineers; they're accounting students; they're journalism students; they're students in some fashion. And if they want to work in any of those things that are going to become their profession, in school, as an internship, they are certainly welcome to do so. No, we are not going to allow them to play professional sports. No, we are not going to allow them to do professional endorsements around their particular sport. But certainly that doesn't prohibit them from pursuing what in all likelihood is going to be their real profession.
Emmert says student-athletes are already compensated with tuition, training and the opportunity to go professional if they want to. If students become employees of the NCAA or their school, the expectation drastically changes and places pressure on students to sideline their education. That's not what the NCAA stands for.
We provide them with remarkable opportunities to get an education at the finest universities on earth -- that's American universities and colleges -- to gain access to the best coaches and the best trainers, to develop their skills and abilities, so if they have the potential, that small proportion, to go on and play in professional sports, we're helping them develop those skills, and they can go do it. And in our case, what amateurism really means, again, is this preprofessional notion that these young men and women are students; they've come to our institutions to gain an education and to develop their skills as an athlete and to compete at the very highest level they're capable of. And for them, that's a very attractive proposition.
Jay Bilas, a sports analyst and advocate for college athlete compensation, told Complex the NCAA fundamentally operates like a business. It should own up to that and pay student-athletes, because students are the ones who are doing all the work. The NCAA profits off video games with players' likenesses but won't share any of the money. Meanwhile, coaches and other staff are making insane amounts of money. Everyone in college sports makes a lot of money but the students.
"Well, college sports is a commercial enterprise. If they ran it the way Division III runs it, like Williams College or Amherst, where they don’t charge admission [it might not be a commercial enterprise]. The NCAA does not charge admission for tournaments in Division II and Division III. They charge in Division I. They charge big money. And they sell it, they sell it to television.
It is intellectually dishonest to say paying student-athletes will somehow ruin the game or their school experience. Student-athletes are already getting an experience vastly different from the average student. The NCAA is actively exploiting the student-athletes to generate revenue. Then the organization turns around and says not paying the students is for their own good. It doesn't make sense. If money is so corrupting, shouldn't the NCAA give up its profits?
"So everything teeters on the athlete? Every responsibility is on the athlete? Nobody ever said, 'If we start paying these coaches hundreds of millions of dollars the game is going to crumble.' Nobody says that. Nobody says, 'If we start putting these things on TV and we start having billion-dollar television contracts the game is going to go to hell.' Nobody says that. 'If we start charging hundreds and hundreds of dollars for tickets, nobody is going to come to the games anymore.' Nobody says that. And, 'If we start selling jerseys with the player’s number on them, that ain’t right, that’s going to ruin the game.' Nobody says that.
Even if student-athletes are paid, there are a host of issues they would face. Money's John R. Thelin has more details:
The $100,000 salary is impressive. A future Heisman Trophy winner might command more, but $100,000 is not bad for an 18-year-old high school recruit. But since it’s a salary, not a scholarship, it is subject to federal and state income taxes. Tuition and college expenses would not be deductible because the income level surpasses the IRS eligibility limit...
So, a student-athlete paid a salary would owe $23,800 in federal income tax and $6,700 in state taxes, a total of $30,500. In cities that levy an employee payroll tax, the salaried student’s taxes go up about $2,400 per year. Income taxes then are $32,900. And, as an employee, the player would have to pay at least $2,000 in other taxes, such as Social Security, for a total of $34,900. This leaves the college player with $65,100. Since college bills come to $65,000, the player has $100 left.
By comparison, how bad was the scholarship model? According to the federal tax code, the $45,000 tuition award is deductible, but room and board are not. The student-athlete will be able to deduct book expenses and qualify for a tax credit under the American Opportunity Tax Credit (AOTC), reducing his tax. The bottom line is that the student-athlete gets a $200 refund in federal taxes and pays $820 in state taxes, for a total tax bill of $620. There’s no local payroll tax because he was not an employee. This means $64,380 of the $65,000 scholarship can go toward paying academic expenses of $65,000.