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Pay for Play

9/25/2019

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It's been a while since I last sat down to opine on issues that I thought might be of interest; however, the recent op-ed pieces and other stories on paying collegiate athletes has given me some reasons to think more about the faulty thinking of some who advocate paying athletes as well as sensible solutions others propose.
This has long been a question asked by many over the past 25+ years.  I come from a different time and era.  I believe there were athletes receiving "payments"back in the 1960's, it just did not become a major issue until the SMU scandal several years later.  In my home town of Knoxville, I think there were players on the university football team being paid to work at the Coca Cola plant.  But, I believe they actually went to work and performed duties for that compensation.  I don't know exactly what they did or did not do, but do know the owner, who has long since passed on, and he was not the kind of man who would pay someone to sit around and do nothing.
Athletes have gotten bigger, stronger and faster and in general better young men (and women) since the 1960's and 70's.  But, just because they are all these things does not mean that suddenly colleges and universities should start paying them to play.  The optimal word here is play.
These young men and women do work diligently; spend many hours practicing and building strong athletic programs for their schools.  And, they are paid.  Paid?  Yes, in my opinion paid.  A college scholarship to attend a prestigious school like Stanford, Duke, Texas or any other school that regularly finds themselves rated highly in football, basketball, soccer or any other sport including swimming and volleyball is worth not just thousands of dollars, but hundreds of thousands of dollars.  This is not just tuition, but room and meals, books, tutors, trainers and healthcare, along with many other benefits enuring to these class athletes.  None of these are available to most students.  The athlete is receiving an education at almost no cost to them.
So, the question is, how do we, or should we place a value on this education package for student athletes.  If no monetary value is placed on it today and those wanting athletes to be paid, they need to think seriously about how other working people in America are compensated and maybe new light might be shed on this issue.  For example, the salesman who receives a car for business and personal use is taxed on his personal use.  Bonuses and gifts are taxable.  Certain life insurance benefits are taxable...as are educational expenses over a specified amount.  Athletes get everything for free, with no tax obligation.
The athletic scholarship rewards a player's ability.  There have been many athletes who have attended their choice of school that will best set their professional career on the right path in their chosen sport.  Then at the right time, whether they have graduated or not, they capitalize on what they have accomplished...all the while enjoying free tuition, free meals, free tutoring, free housing and the many other benefits...never paying a single penny back to the university.
Admittedly, many athletes do graduate and earn degrees.  Some of the degrees are perceived to be questionable and referred to as "made-up degrees," while others gain valuable insight and education while a student athlete.  Regardless, these athletes ultimately "cash in" and take big dollars when they make it to the NBA, NFL, or Major League Baseball.  Their time at school should be thought of as an internship; where the refine their abilities and hone themselves for the future when they truly can capitalize on their playing ability, thus converting it to earning ability.
Many athletes earn real degrees and have real educations that set them up well in the event "pro sports" does not work out for them...these are the smart guys....not in terms of brainpower, but in terms of thinking.  Everything comes to an end sometime.  Think about this.  The average professional baseball player longevity in MLB is 5.6 years...the longest of the three major sports; followed by the NBA at 4.9 years and NFL at only 3.3 years.  The compensation in signing bonuses, guaranteed salary and contracts far exceeds what most of us will ever earn in our lifetime, even with this short term.
If a university uses the likeness of a player to attract people to support that school's programs, buy tickets, contribute to the university and bring revenue, all of which in general supports the entire school and its student body, why then should that player be paid more when he is already getting the many elements of his scholarship?  I do not personally see any conflict for an athlete to work a legitimate job in the off season, if he or she can.  Do they actually deserve to be paid because they can run faster or jump higher?
If the NCAA decides to allow athletes to be paid to play, I strongly believe those athletes should be taxed on the imputed value of what they receive from the university for playing.  This would generate millions of tax dollars.  The scholarship should be considered income.  At schools like Southern Cal, Stanford, Duke et al, where tuition can run as much as $75-100,000 per year (plus all the other benefits), this could be a windfall for the US Treasury.  It's estimated that there are more than 460,000 student athletes competing in NCAA sanctioned sports today at colleges and universities.  Most are not on scholarships like full rides for basketball and football.  So, if only a fraction of the total, let's say 10% of them are on scholarships with a value of $500,000 over four years (that is tuition and everything else), the total taxable revenue over a four year period would be $23 billion.   That is B, billion.  At a low tax rate of only 15%, even though $125,000 per year is not considered low income, the tax generated would be $3.5 billion over the four years.  Heck in a few years, the total might be what some would call real money....$35 to 50 billion.
Come to think of it, that might help pay down some of our growing debt.  This is truly a slippery slope....pay them to play, but only if they pay their fair share of the taxes based on the value they receive.


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    Author

    CJ McDaniel,
    50+ years in the sports marketing business including the PGA of America and PGA TOUR, Cornerstone Sports, ClubCorp International and Crenshaw Golf.  Serves as a Director of The Sports Marketing Company.

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