A Salary Cap for College Coaches?

By Joe Nocera | New York Times


I wrote my first article for The New York Times about the N.C.A.A. four years ago. Appearing in the magazine, it was headlined “Let’s Start Paying College Athletes.” Although I had been a college basketball fan all my life, I had never paid much attention to the inner workings of the N.C.A.A. But my research woke me up to the inequities faced by college football and men’s basketball players, and compelled me to begin writing regularly about how the N.C.A.A. and the college sports establishment exploit the players who generate the billions that the grown-ups pocket.

The conceit for the original article was to imagine that the N.C.A.A.’s “amateurism” model — which, of course, enables that exploitation — had magically disappeared, finally allowing athletes to be paid. My charge was to devise a scheme that would divert some revenue to them without bankrupting university athletic departments or destroying the fabric of college sports. What I came up with was a system that revolved around a salary cap. It also had a handful of other facets, which I’ll get to shortly.

A minimum salary of $25,000 per player in each sport would not make athletes rich, but it would give them enough to live like a typical college student. Credit Andy Lyons/Getty ImagesPhoto by: Andy Lyons/Getty Images

Although the N.C.A.A. had its critics four years ago, they were neither as numerous nor as visible as they are today. The O’Bannon lawsuit against the N.C.A.A. was years from being adjudicated. The college sports reform movement hadn’t yet coalesced. The most prominent voice then calling for players to be paid was Taylor Branch, who had published a seminal article, “The Shame of College Sports,” in The Atlantic just a few months before my piece in The Times Magazine.

Over the next few years, however, the N.C.A.A.’s issues became part of the zeitgeist. As that happened, a raging debate developed about whether — and how — to pay the players. The ESPN college basketball analyst Jay Bilas, for instance, advocates a free-market approach, saying that athletes should reap whatever the market will bear. Others promote the so-called Olympic model, in which players would generate income from endorsements, autographs, jobs, and control of their image and likeness.

On the other side of the divide are those who believe that a college scholarship is pay enough — though in truth, most of those taking this position are athletic directors and coaches.

A second concern is that universities cannot afford to pay the players. A leader of this school of thought is Andrew Zimbalist, the prominent Smith College sports economist (and an old friend of mine), who likes to point out that fewer than two dozen of the 350 Division I athletic departments make money.

Offended by the multimillion-dollar salaries of college coaches, Zimbalist has proposed that the N.C.A.A. receive a limited antitrust exemption from Congress, the purpose of which would be to cap the compensation of coaches and athletic directors. (He has also called for players to receive more benefits, like health insurance, and to reap outside income from their image and likeness.)

Finally, there are the courts, which are also fighting over how much to pay athletes. When Judge Claudia Wilken decided the O’Bannon case in 2014, she ruled that the N.C.A.A. was in violation of antitrust laws and that players should receive money to bridge the full “cost of attendance” at college. (Under pressure from the so-called Power 5 conferences, the N.C.A.A. agreed to this a few months later.) She also said athletes should receive an additional $5,000, to be held in trust until they left school.

An appeals court agreed with her about the cost of attendance but struck down the extra $5,000. There is now a new case before Judge Wilken, of the United States District Court in Northern California, that, if the plaintiffs win, will get the N.C.A.A. out of the compensation-setting business and allow the conferences to set their own rules for it.

Which brings me back to my salary-cap idea. As I’ve followed the growing debate over paying players, I’ve been surprised that no one else has gone down this path.

My salary-cap idea would not break the bank, as one side fears, but it does not completely abandon free-market principles either. Mainly, it is a practical approach, and I think that as such it’s worth another look.

Here’s how it would work:

Every Division I men’s basketball and football team would have a salary cap, just as the pros do — except the amounts would be vastly lower. In basketball, the cap would be $650,000. In football, it would be $3 million. It is ludicrous to argue that the Power 5 programs cannot afford this; the combined $3.65 million is barely half the $7 million that Michigan Coach Jim Harbaugh made this season. (I would also drop the number of scholarships in college football to 60, which is closer to the size of an N.F.L. team, from 85 in the top tier.)

Second, I would impose a minimum salary: $25,000 per player in each sport. This would obviously not make the athletes rich, but it would give them enough to live like typical college students.

Now to the free-market aspect: The minimum salaries consume only half the cap. The rest of the money would be used as a recruiting tool, so that a star player could be offered additional money as an inducement to go to a particular university. One university might want to offer a star halfback $40,000, while another might offer him $60,000. The player would make a choice based not on a recruiter’s sweet-talking promises — or not solely on that — but on cold, hard cash.

I can see you recoiling at this notion. But let me ask: Is offering cash compensation really that much worse than the current system, in which universities build lavish facilities and spend absurd sums on their “programs” to lure good players? Doesn’t it make more sense to give some of that money to the players? It would actually be less expensive.

College athletes should be allowed to endorse products and be paid for their autographs and the right to use their image. Credit Mike Ehrmann/Getty ImagesPhoto by: Mike Ehrmann/Getty Images

It would also have other benefits. Universities could hit up boosters to put money into a fund — tax-deductible under current law — to pay the players’ salaries. That would diminish their incentive to sneak money and benefits to athletes under the table.

And the contracts between players and universities — yes, contracts, just as in any other important economic transaction — could go well beyond compensation.

They could require a player to spend, say, three years in college, reducing reliance on one-and-dones. The players and their parents might insist on certain academic benefits or the right to pursue a particular major. (My system would also necessitate agents to advise athletes. This is a good thing, not a bad one.)

And to those who say that paying some players more than others would create dissension on a college team, I would reply that huge salary disparities are a fact of life in the pros, and they seem to manage somehow.

(Although I did not think of this when I wrote my original article, it seems clear to me now that college sports should also adopt the Olympic model, so that athletes in any sport, not just football and men’s basketball, could endorse products and be paid for their autographs and the right to use their image. That seems like a pretty basic right.)

Salary caps, of course, violate antitrust law — unless they are negotiated at arm’s length by an organization representing the athletes. That is why pro basketball, hockey and football depend on players’ unions: If the unions disappear, so do the salary caps.

For college athletes, such an organization already exists: It is called the National College Players Association, headed by Ramogi Huma, the longtime activist who was the driving force behind the effort to unionize Northwestern’s football players. As an advocacy group, the N.C.P.A. lacks power; under my approach, it would be given the power to collectively negotiate on behalf of college athletes.

The N.C.P.A. would negotiate with the N.C.A.A. and the Power 5 over the salary cap and minimum salaries, which would probably increase over time. It would also have a seat at the table when the conferences and the N.C.A.A. negotiate with the networks over television rights. The players would get a certain percentage of all TV and marketing revenues — I’m thinking 10 percent at first, though that, too, would probably rise — which would be held in a fund by the N.C.P.A. and disbursed to a player after he left school. How much the player would get would depend on how often his team played on television, and under which TV contract.

Yes, that sounds complicated, but it’s really not that different from the way music royalties are distributed.

This same fund would pay for lifetime health insurance for football and men’s basketball players. Former college athletes would be assured health insurance no matter what, relieving the universities of what ought to be their moral responsibility. The N.C.P.A. could also vet agents — as the pro unions do — and, for pro prospects, offer insurance against career-ending injury.

My plan has one other element. Although college eligibility would remain at the current four years, the scholarships themselves would give players eight years to complete a degree. (My original article suggested six years, but I now think eight years makes more sense.) Playing football or men’s basketball is a full-time job and then some. The appeal of college athletics, in no small part, is that the players are students at the universities, so they would still have to take classes. But their loads should be reduced during their years of eligibility, and once their playing days are over, they should be able to finish their education free. That’s only fair.

What’s more, a huge percentage of athletes, including bench warmers, are convinced that they are bound for professional glory. Many athletes do not bother with their studies because they think they will get rich once they enter the pros. By the time they realize that’s not going to happen, it’s too late. My plan would make it possible for them to return to college and get the education that would allow them to find another path to a successful life.

Is my plan perfect? Of course not. The most obvious problem is whether my scheme violates Title IX by carving out football and men’s basketball players for special treatment. My belief is that athletes in the revenue sports play a different role on campus than other athletes: Many of them have been admitted to the university, after all, because they will generate revenue through their play. But I also realize that this is a point that would most likely have to be litigated.

There is also the question of what smaller colleges will do. Four years ago, I thought that the increasing cost of big-time college sports would cause smaller schools to reconsider the role of football, an expensive sport to put on. I thought they might decide to de-emphasize sports, perhaps forming a subset of Division I that did not view itself as in competition with the Power 5 conferences.

But I’ve been proved wrong about this. After the cost-of-attendance payments were approved, the non-Power 5 universities were nearly unanimous in vowing to find ways to pay them to their athletes despite the strain on their athletic budgets. Now my best guess is that if a salary cap were put in place, the non-Power 5 universities would find ways to pay for salaries as well. I don’t think that’s the best outcome, but it is outweighed by the net good that would result from a salary cap.

That’s my idea for paying college athletes. If you’ve got a better one, I’d love to hear it. We can argue about it on Twitter — I’m @NoceraNYT.

Joe Nocera is the new sports business columnist for The New York Times.


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