This has been a very bad year for intercollegiate athletics.
The Penn State scandal has put the sheer size of the big-time sports problem front and center of a national debate, and money is a big part of the problem. A bigger part of the problem, however, is the mismatch between the fiction of college sports and real value system that college athletics represents.
In his recent New York Times Magazine article Joe Nocera made a sensible proposal: pay college athletes (a recommendation also made by Taylor Branch in the Atlantic Monthly). Nocera also reported NCAA President Mark Emmert’s less-than-enthusiastic reaction to the idea:
If we move toward a pay-for-play model — if we were to convert our student athletes to employees of the university — that would be the death of college athletics…Then they are subcontractors. Why would you even want them to be students? Why would you care about their graduation rates? Why would you care about their behavior?
In my view, Nocera’s proposal does not go nearly far enough. It is doomed without a more systemic change. Big-time sports programs have to be separated from university operations by a corporate fire-wall. And it has to be done by legislation.
Last year, I wrote about the upside-down value system and parasitic nature of intercollegiate athletics. Sports programs are grafted onto universities to extract value from academic programs for the sake of the sports programs. Athletic decision-making cannot be trusted to align itself with academic goals when so many of the incentives are tied to the success of a non-core, big money operation that has virtually no relationship to academic outcomes.
What is needed to save intercollegiate athletics is a Glass-Steagall Act for universities.
In the 1930s, the federal government legally separated investing and commercial banking; prior to that, commercial banks competed in the underwriting of securities with investment banks, leading to conflicts of interest in which commercial banks advised their customers to invest in low quality securities. (Glass-Steagall was eventually repealed in 1999, largely on the strength of the argument that it over-regulated the market. The public could rationally account for the possibility of conflict.)
It is a matter of debate whether the repeal of Glass-Steagall led to the 2008 collapse of financial markets, but whatever your position on this kind of regulation in banking, you should be in favor of a legal barrier to separate athletics and academics. It gets universities out of the sports entertainment business—a very good idea.
The structure and economics of major college sports lacks transparency and that creates conflicting incentives for university officials. Separating intercollegiate sports from other university operations would remove many of the conflicts that create insurmountable problems for smaller solutions like stricter penalties for misconduct, increasing academic standards for athletes, or—as Nocera suggested—changing the compensation model altogether.
Let’s deal first with the realities of NCAA sports.
Ringers
The fictional world of college sports is a Knute Rockne All-American world of students gathering under the leadership of a great coach to pursue a noble goal. It is the world that Mark Emmert lives in and want to preserve.
The reality is that nearly every Football Bowl Subdivision team (that is, the top NCAA division) is composed mainly of ringers. Their players have been recruited not from a pool of enthusiastic students but from a carefully groomed field of potential professional athletes. The concern that pay-for-play further separates college athletes from their fellow students and the rest of the campus rings hollow in a world in which there never was much of a connection to begin with.
The question is not so much whether these “student-athletes” should be employees of the university as why they should have more connection to the university than any other subcontractor. Architects help create great campuses, but they are not students. Clothing designers help create a global brand for universities, but they aren’t students. And venture capitalists create wealth ecosystems for research-oriented universities, but they aren’t students.
The question then becomes: if not the university, then who employs the athletes?
Rogues
In the fictional sports world, everyone is operating in the best interest of student-athletes and their institutions except for a few rogues: agents, boosters, and misdirected alumni who corrupt the system with dollars and egos. In this world, if we could just expose the dark corners of college sports to the light of day, then the inherent good in the system would take over.
In the real world, everyone from coach to university president is operating in his own best interests. And there are big incentives to succeed. Presidents have to bring in revenue to keep their jobs. Media thrive on heavily-promoted but completely artificial rivalries that boost audiences and advertising revenue. Professional teams are waiting with open arms for the steady stream of new talent—a pipeline, by the way, in which they have invested hardly a penny.
Players for the most part navigate between a fictional world in which they are exploited and the real world of palatial facilities, excellent coaching, and the opportunity to play on national television and show their talents to professional scouts. The real world looks more like a Larry McMurtry western—a morally chaotic delta of conflicting motivations and convulsively imposed rules and sanctions that happen to converge along the few pathways that everyone travels. In the real world, it is hard to tell the rogues and other ne’er-do-wells from the regular cowpokes.
A Needed Firewall
Intercollegiate athletics as we know it should stop at Division III (in North Carolina, that includes schools such as Salem College and North Carolina Wesleyan) and the NCAA should shrink to include only institutions that do not offer athletic scholarships. Everything else that we love and hate about college sports should be separated from university operations by a barrier.
Thus, I propose a sort of Glass-Steagall Act for the NCAA that prohibits the mixing of academic and athletic funds and fund-raising. This would place the risks and rewards for big-time sports in the hands of corporations—let’s call them Division I Companies—that are operated for the benefit of the licensing universities.
A university could choose to license its name and logo to a company that operates its Division I and II programs, but the company would have to be a stand-alone, independent entity that neither relies upon nor uses university funds. Recruiting, training, and other operating expenses — as well as all capital expenditures — would be carried on corporate books, not university accounts.
A Division I company could choose, for example, to sign an agreement with the Atlantic Coast Conference to share revenue and expenses; it could enter into predatory media agreements; it could even choose to allow unfettered access to its players by professional sports teams. I don’t know why an independent board of directors would allow those things to happen, but at least it would not be a governance problem for the university.
Above all, Division I companies would not be allowed to offer scholarships or recruit students to the university.
University fund-raising for athletics would be decimated by such a proposal. Asking a potential donor to contribute a million dollars to the Notre Dame Athletic Corporation would make no sense whatsoever. For the first time, NCAA Divisions I and II sports programs would have to rise or fall on the strength of their own business models rather than the current parasitic relationship with their host institutions. There would be few incentives for mixing academic and athletic funds.
I like Nocera’s pay-for-play model in a world of Division I Companies. College students who want to play for a Division I Company would have to be employed by the company, at whatever market rates prevail. Given the high capital costs of mounting a competitive program and the salaries available to professional athletes, I predict that salaries would settle very quickly into a comfortably low range.
Division I athletes would essentially be transformed into work-study students. They would join the ranks of countless engineering, journalism, and business students who spend part of the year working at a company, developing skills, building the professional networks, and earning money for tuition, fees, and books.
Of course, making all of this work would require dismantling an industry that prospers mightily from its dependence on ringers and rogues and the other continued fictions that underlie college sports.
(Editor’s note: The Pope Center’s Jay Schalin offers a different way to separate universities from professional sports at this link.)