Monday, April 20, 2015

“Why not let student-athletes pay taxes?” The Colorado Springs Business Journal, April 17-23, 2015, 25.



Let Student-Athletes Pay Taxes

As tax season comes to a close and all the standard complaints against the IRS is heard, there are some who might be more than happy to pay taxes, if they only got paid for their services.

Student-athletes aren’t paid, despite the fact that March Madness has netted their respective 32 universities about $1 billion with around 30 million viewers for the championship game. Total viewing of all the games was larger than the 2015 Super Bowl of 120 million. 

The NCAA remains steadfast in its reasoning for not “professionalizing” collegiate sports, claiming athletes aren’t “employees,” but instead amateurs. Given the amount of money involved here, many find this stance both unfair and hypocritical.

The designation of student-athlete is also a legal ploy that shields universities from paying any compensation for injuries while playing for the team; no workers’ compensation can be claimed or granted to “non-employees.”

Unlike the competition to attract student-athletes, coaches’ salaries at high profile institutions are rising to levels seen only in professional sports. In basketball, just look at Mike Krzyzewski of Duke at $9.7 million, Rick Pitino of Louisville at $5.8 million, and John Calipari of Kentucky at $5.5 million. In football, note the compensation of Nick Saban of Alabama at $7.3 million, Bob Stoops of Oklahoma at $5.25 and Jim Harbaugh at Michigan $5 million.

True, only about 10 Division I athletic programs are profitable, according to most reports, but the accounting used for this assessment is always problematic. Even so-called “losing” programs can attract alumni contributions and help significantly with freshmen recruitment in ways difficult to measure, but that surely exist.

Assuming that university presidents will never collectively decide to turn their “professional” athletic programs into truly amateur ones, where the love of sports and student spirit reign, is there a middle ground between these two poles?

From its inception with Adam Smith, economic literature has always tried to keep a core of moral values afloat so as to justify private property, for example, and market exchanges.
Given the sheer size of the collegial athletic market, is there any moral ground for outlawing student compensation? Academic scholarships are usually counted as a compensation but in fact carry with them very low marginal cost (of having one more student in a class when 30 others are already paying).

If the outright payment to athletes is inappropriate, how about establishing a personal account for each athlete and contributing to it $50,000 annually. If an athlete plays for four years, his/her account reaches $200,000 (plus interest) and s/he has a nice nest-egg upon graduation.

Given that only 2% of student-athletes ever make it to the professional leagues, the other 98% may at least have some financial compensation for their contributions to the coffers of their Alma Maters.

As for injuries, student-athletes should be added to university employees’ plans, so that their treatment and rehabilitation over the years will be covered by proper insurance. If it’s good enough for the coaches, why not extend it to their players?

The University of Texas (Austin) athletic revenue for 2012-13 was in excess of $165 million; a million or two set aside for graduating athletes would easily allow the program to retain its overall net profits.

Since there is no reasonable economic argument against sharing the revenue of athletic programs with those on whose backs success is achieved, and since there is no moral argument against it either, what is the obstacle to this common sense proposal?

Perhaps it’s the myth of amateurs competing solely for the love of the sport, as if this competition is happening in an economic vacuum and all amateur athletes share the same motivation.

Or it may harken back to gladiators who competed in the arenas for their lives, and if lucky enough, for their freedom. True, athletes are not slaves in the technical or legal sense of the term, but on an economic level, they are treated as such.

Even if we solve the financial dimension, what about the “student” part of the designation? The hypocrisy here is even more upsetting. From Ronald Smith’s Pay for Play (2010) to Jay Smith & Mary Willingham’s Cheated (2015), it becomes clear that athletes’ education is compromised.

It’s not only scandalous that student-athletes are cheated out of their rightful share of the money they earn for their universities, it’s even more alarming that they are exploited for their talents with complete disregard to their academic work.

If 98% of student-athletes never make it to the professional arena, and if they lack the skills higher-education is supposed to provide them with, what are they supposed to do?
We should let student-athletes pay taxes, it’s the right thing to do!

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com
        

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