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College Economics: And Why College Athletes Need To Be Paid

1535 words - 7 pages

Due to National Collegiate Athletic Association (NCAA) rules and regulations no college athlete is able to receive any compensation or endorsement while participating in college athletics. These rules have long been challenged, however, the NCAA does not make any changes. With universities grossing close to $200 million a year, college athletics has turned into one of the top industries in the world. The NCAA, a governing body of college athletics, currently holds all power in college athletics. Without people questioning the NCAA and demanding changes to the monopoly that the NCAA holds nothing will happen to the unfairness to college athletes in college sports today. College athletes deserve to receive compensation in some way for the large amounts of money that they earn for their university.
In business dealings around the world, the economists use the fair market value formula to see how much market value a person, property, or business currently has. In today’s college athletic landscape major programs have players with a fair market value that exceed hundred of thousands of dollars. For example, the University of Texas football players have a fair market value of $578,000 per year and Duke University basketball players have a fair market value that exceeds $1 million per year(Rickman, 2013). With the fair market value the players receive forty percent of all revenue that the college brings in that calendar year through scholarships and other benefits from their university. This means that college athletes bring in over sixty percent more money to their university then the fair market value. In 2011 alone the University of Texas grossed over $183 million, yet as of right now college athletes receive no compensation. (Jessup, 2013)
College athletes work hard and in return major college officials and NCAA officials bring in monstrous salaries, while currently 85% of college athletes live below the poverty line and struggle to make ends meet. (Frommer, 2013) For example at the University of Texas an in state tuition costs around $4,000 while out-of-state tuition costs around $11,000. As previously stated, Texas football players’ fair market value yields at $578,000 per year. At the very least there remains a total of $567,000 per player that remains unknown as to where it goes. College athletes do not deserve all the money they bring in, but if one really thinks about it, nowhere else in the world of economics does a person spend over forty hours a week and brings in $500,000 per year for their institution, yet they receive compensation of $11,000. The numbers do not match up. (Frommer, 2013) These numbers definitely do not match up when one takes into account coaches’ salaries. (Berkowitz, 2012) The average coach NCAA division 1 basketball acquires a salary of $1.47 million per year. With Duke’s head coach, Mike Krzyzewski, making the large sum of $7.2 million per year . While Duke’s athletic director, Kevin White, brings in...

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