Running head: SUPPORTING THE ATHLETES EDUCATION

Supporting the Student Athletes Education:

Legal and Ethical Issues of Paying Division I Football and Basketball Players
Casey B. Hendricks
Loyola University Chicago

SUPPORTING THE ATHLETES EDUCATION

Table of Contents

Introduction

The NCAAs Scholarship-Only Model for Student-Athlete Compensation

Students Who Play Intercollegiate Sports: Athletes or Employees?

The Antitrust Angle

11

The Myth of Amateurism in Popular Collegiate Sports

13

Looking to the Future

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Introduction
College athletics has always given rise to controversial legal issues in the United States
from the century-old arguments surrounding the nature of amateurism versus professionalism, to
the current issues involving student athlete unionism and compensation. This has resulted in
tremendous scrutiny of both public and private intercollegiate athletic departments, especially
those institutions with large and mid-sized football and basketball programs. A recent example
of how these issues play out prominently in the public square is the ongoing policy reactions to a
2014 National Labor Relations Board (NLRB) decision that Northwestern University football
players have the right to unionize as employees of the university. This ruling is one of two recent
court decisions that focused on two of the most pressing and important concerns regarding
intercollegiate student athletes: (1) should athletes be paid as employees; and (2) do the NCAA's
limitations on scholarship awards unreasonably restrain trade in violation of antitrust laws?
Todays primary controversy stems from whether or not Division I football and basketball
players, the student athlete population that is the topic for this paper, should be compensated for
their efforts. Student athletes efforts on the football field or basketball court bring millions of
dollars of contracts and publicity to the NCAA and its participating colleges and universities.
But student athletes themselvesclearly the essential ingredient to these money-making
enterprisesare restricted to receiving compensation largely in the form of scholarship awards,
which often fail to cover the full costs of attending the school when you include room, board,
and other social expenses that are as much a part of the college experience today as the library or
student union. The question this paper addresses is whether, and how, student athletes should be
paid. In light of the full mix of information available, the answer appears to be quite obvious:
Yes, student athletes deserve to be compensated for their efforts. The more troublesome problem

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that this simple answer does not resolve is how to navigate the legal and ethical issues that can
significantly complicate the work of establishing a fair and reasonable compensation regime for
certain intercollegiate athletes.
The NCAAs Scholarship-Only Model for Student-Athlete Compensation
Although many athletes are awarded sport-specific scholarships, this financial support
often falls short of covering the full cost of attendance, leaving too many athletes living below
the poverty line (Miller, 2012). This scholarship-only approach dates back to the earliest years
of organized intercollegiate athletics.
In the early years of the 20th Century, college football became one of the most popular of
a new breed of spectator sports. The game itself also had developed into an unruly and often
violent activity. As reformers and athletic managers alike attempted to curtail the violent
tendencies with new rules for student athletes, both on and off the fields, participating
institutions came to see that they lacked the type of effective organization required to coordinate,
implement and police such efforts. So in 1906, 62 schools in the nation joined together to form
an exclusive governing body for college sports, the National Collegiate Athletic Association
(NCAA) (Miller, 2012). The NCAA was created to preserve competitive integrity within
intercollegiate athletics and to support the student athletes pursuit of excellence in academics
(NCAA, 2015). It was founded at least in part to oversee efforts to protect and maintain the
growing popularity of intercollegiate sports. Ironically, today the NCAA is viewed by many as a
part of the problem and controversy continues to cast a shadow over the victories and awards of
many intercollegiate programs and participants. As a non-profit organization the NCAA claims
to invest all profits in its mission to equip student athletes to succeed on the playing field, in the
classroom and throughout life (NCAA, 2015). Some close observers claim, however, that the

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organizations primary concerns resemble those of any for-profit business in the United States
and this profit motive often results in a failure to adequately support athletes academic pursuits
(Miller, 2012). While the NCAA maintains that it promotes sports in an ethical manner, evidence
suggests that academic goals can often appear to be an afterthought (Miller, 2012).
The NCAA prohibits colleges and universities from awarding scholarships worth more
than the total cost of attendance, which includes tuition and fees, room and board, books and
some various allowances for incidental expenses (NCAA, 2015). The purpose of this restriction
is to maintain equity among institutions since the scholarship-only approach provides all athletes
with the same essentials regardless of the institutions relative wealth and other resources. This
may seem reasonable, but colleges often include more items in their calculation when advising
students on the cost of attendance (Weaver, 2015). College students, athlete or not, are
guaranteed to have other essential expensessome expected and routine, like cell phone and
laundry expenses, and others that are unexpected, such as health care. After the University of
Connecticut won the 2014 NCAA Basketball Championship title its star player, Shabazz Napier,
made headlines with his surprisingly candid remarks about the student athlete compensation
debate. Napier said, we do have hungry nights we dont have enough money to get food
sometimes money is needed (Fox Sports, 2014). The public reaction to these comments
resulted in the NCAA swiftly revising its rules for student athlete meal plans. Before the
decision was approved to provide unlimited meals to all athletes, schools had been limited to
providing three meals a day, or a food stipend (NCAA, 2014). An NCAA spokesperson
explained that it was a measure taken to meet the nutritional needs of all student athletes
(NCAA, 2014). This led to an obvious question: Were those nutritional needs not being met
previously?

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In addition to scholarships falling short of covering actual and expected expenses, up

until a few years ago the NCAA limited scholarship offers to a single year at a time. In August
2011, the NCAA Board of Directors voted to allow multi-year scholarships (NCAA, 2012).
Allowing scholarship offers to exceed one year is a small step in supporting the economic needs
of student athletes, but it is not enough. Although schools may offer multi-year scholarships,
only five of 28 Division I schools provided multiyear scholarships to 10 percent or more of their
athletes for the 2013-2014 academic school year (Solomon, 2014). Five of the 28 schools did
not provide any multi-year scholarships to its athletes. Multi-year scholarships are not
mandatory, and the single-year approach taken by the vast majority of Division 1 mens football
and basketball programs affords coaching staffs the ultimate power over student athletesthe
power to take away a scholarship (NCAA, 2015). If athletes are injured, or simply have not
performed up to the coaching staffs expectations, they may lose the ability to pay for their
education, regardless of their performance in the classroom. As the supposed protector of
student athletes, the NCAA is responsible for ensuring that students are afforded the legitimate
opportunity to earn their degree. As such, the NCAA should require schools to offer their
Division I mens football and basketball players four-year scholarships and to assist the schools
in implementing a budget to reserve the funds necessary to make it work.
Students Who Play Intercollegiate Sports: Athletes or Employees?
The debate over whether scholarships will suffice, or whether at least some student
athletes should be further compensated for their participation, touches on a diverse set of legal
issues. The first issue is to answer the question: Are student athletes students at all? Researchers
claim that participation in Division I sports is equal to the demands of a full-time job. Supporters
for this argument claim players are employees and deserve to be compensated for their

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participation in sports and protected under workers compensation claims for sports-related
injuries. The NCAA, however, is committed to the collegiate model of athletics in which
students participate as an avocation, balancing their academics, social life and athletic
participation (NCAA, 2015). The NCAA views that avocation more like a hobby or pastime,
while others view it is a job. In 2014 the Northwestern University football team petitioned the
NLRB for the right to unionize, claiming their affiliation with Northwestern is not unlike that of
an employer-employee relationship. In March 2014 student athletes made great strides toward
achieving the rights they are entitled to based on their employee status with the University.
Student athletes can be classified as employees based on the National Labor Relations Act, as
explained by Peter Sung Ohr, the NLRB Regional Director in Chicago:
the Head Coach of the football teamcan immediately reduce or cancel the
players scholarship for a variety of reasons. Indeed, the scholarship is clearly
tied to the players performance of athletic services as evidenced by the fact that
scholarships can be immediately canceled if the player voluntarily withdraws
from the team or abuses team rules. Although only two players have had the
misfortune of losing their scholarships during the past five years [at
Northwestern], the threat nevertheless hangs over the entire team and provides a
powerful incentive for them to attend practices and games, as well as abide by all
the rules they are subject to. (Northwestern & CAPA, 2014, p. 15)
Northwestern University claims that student athletes participate in sports for their own
benefit and they do not render services for compensation (Northwestern and CAPA, 2014). The
purpose of a football program is to secure the most competitive team possible; every team
competes for the best players by recruiting and granting scholarships based on the players

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athletic ability. Regional Director Ohr said scholarships are compensation for the athletic
services athletes perform (Northwestern & CAPA, 2015). Northwestern administrators have
appealed the decision favoring the players right to form a union, claiming they were not
employees and thus ineligible under existing laws and legal interpretations.
If Northwestern, and the NCAA for the matter, were concerned primarily about athletes
educations, they would not allow athletes to engage in sports activities for more than the
maximum 20 hours per week permitted under NCAA rules. But these rules are routinely avoided
because there are so-called voluntary opportunities that often go well beyond the maximum of
hours permitted for countable athletically related activities or CARA (NCAA Manual, 2015
January). Other activities that are not CARA include travel, mandatory training meetings,
voluntary weight conditioning or strength training, and medical check-ins.
If student athletes were classified as employees, the question remains how to come up
with the money to pay them? Northwestern University reported that its football program
generated $8.4 million in profits during its 2012-2013 academic year. The school explained that
the profit is used to subsidize the schools non-revenue generating sports to ensure compliance
with Title IX of the Education Amendments of 1972 (Northwestern and CAPA, 2014). Even if
the profits were available to pay the athletes whose efforts generated the revenue, the next issue
raised is who to pay and, even more challenging, how much to pay? Does the star [player] get
as much as the benchwarmer? (Futterman, 2015, para. 5).
Access to workers compensation is another legal issue at the forefront of these efforts to
reshape the relationship between at least some student athletes and the schools that profit from
their participation in intercollegiate athletics. Classifying student- athletes as employees would
allow students to qualify for workers compensation upon injury. Kain Colter, the Northwestern

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University football star who began the union push, said his main concern for leading the petition
to unionize was to ensure medical protection for injured athletes while attending school and to
compensate for lost post-graduation opportunities or abilities (Strauss, 2014). A well-known
workers-compensation case involving a Texas Christian University football player, Kent
Waldrep, failed to prove student athletes were due workers compensation benefits. Waldrep was
paralyzed while playing football in 1974 and in 1990 an appeals court rejected his claim that he
should be treated as an employee because he had not paid taxes on his financial aid (Branch,
2011). The financial burden of paying for sustained injuries for a lifetime is insurmountable.
Past litigation has ruled in favor of the NCAA, affirming its justification for restricting athletes
compensation for the purpose of supporting the education mission (Chin, 1993, 1225).
It is difficult to comprehend why so many court cases have ruled in favor of the schools
and ignored the fact that the injury would not have occurred if the athlete had not been recruited
and accepted a scholarship to play at the school. Courts have also reasoned that football is not an
integral part of a colleges business and the college does not benefit from the athletes
performance (Gurdus, 2001). Like many others, I disagree with this position. It is clear that an
athletes success on the field is linked to the schools business success and associated profits. A
school benefits in ticket sales and free publicity from news coverage of big wins which in turn
can lead to increased applications for admission and ultimately tuition dollars.
In order to qualify for workers compensation, a student athlete must be considered an
employee and must have been acting within the scope of his employment when he was injured
(Haden, 2001, 677). Colleges claim they can conduct their business without relying on athletic
programs and therefore students cannot be considered employees (Haden, 2001). Regardless,
athletes can have their scholarships revoked when their athletic ability is compromised. And this

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10

is an inherently unfair outcome to those athletes and their families. The business of the colleges
is to educate students and because of that they do not pay federal taxes on tuition or other
payments associated with educational activities (Haden, 2001).
One issue that may be preventing schools from agreeing to classify student athletes as
employees, at least in relation to some revenue-generating sports programs, is the tax
consequences such classification would create. If athletes were paid, the IRS would likely
consider football and basketball commercial ventures and the colleges could lose those beneficial
tax exemptions (Haden, 2001). This is most likely a significant deterrent for schools whom might
otherwise have no particular problem with paying their athletes as employees.
Many claim the NCAA points to the issue of amateurism as a defense and it seems that
approach often has been successful. Several court rulings have relied on the NCAAs policies
concerning the student athletes amateur status as a reason for denying that an employeeemployer relationship exists between a student athlete and the university or college that is
providing the scholarship (Gurdus, 2001).
College players were not students at play (which might understate their athletic
obligations), nor were they just athletes in college (which might imply they were
professionals). That they were high-performance athletes meant they could be forgiven
for not meeting the academic standards of their peers; that they were students meant they
did not have to be compensated, ever, for anything more than the cost of their studies.
Student athlete became the NCAAs signature term, repeated constantly in and out of
courtrooms. (Branch, 2011, para. 39)

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Should student athletes be paid? Yes, because student athletes are not subjected to the
same traditional rules that a regular student is. For example, if a student athlete wants to earn
cash over the summer, he may charge for basketball lessons as long as his name, photograph or
athletic reputation is not used to promote the business (NCAA.Org, 2015). How is a player to
advertise his services without using his name? Student athletes are also classified on the basis of
their eligibility-to-play status as opposed to their academic standing (Sanderson & Siegfried,
2015). This makes clear that schools view student athletes as athlete first, student second.
The Antitrust Angle
Section 2 of the Sherman Act says that it is against the law to monopolize a market. A
monopoly exists when the organization has considerable power in the relevant market and the
organization deliberately sustains that power to the exclusion of competition (Chin, 1993). There
is no doubt that the NCAA maintains a monopoly in the college sports market. It is fair to say
there is a slim chance a new college will be founded, grow wildly popular and be able to
somehow engage in intercollegiate sports outside of the NCAA monopoly. The new college has
no choice but to follow the NCAAs policies if it wants to remain successful and grow. The
NCAA is the only entity with substantial power over intercollegiate athletics in the country
(Chin, 1993, 1222). The restraints the NCAA imposes may justify excessive payments to
student athletes while in school but they do not justify the unyielding ban on compensating
students with any share of revenue generated from using their names, images and likenesses
(Edelman, 2014, p. 2333).
In August 2014, a United States District Court agreed with a group of former college
athletes that the NCAAs rule prohibiting compensation to athletes was unlawful based on the
argument that the NCAA violated the Sherman Antitrust Act by profiting from the use of players

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likeness in video games (OBannon v. NCAA, 2014). The Sherman Act states that an agreement
between two parties collectively agreed to fix athletes wages below market rate and significantly
counteracted competition in the college sports market (Edelma, 2014). Former athletes filed
complaints against the NCAA accusing it of exploiting the use of their likeness and for antitrust
law violations in OBannon v NCAA. The NCAA maintained that limiting athletes
compensation was justified because of the pro-competitive effects of such restrictions. In order
to prove this a burden-shifting analysis was applied. First the plaintiffs had to prove that the
restraints produced anticompetitive effects within a relevant market. The relevant markets in
this case were the education market and the group licensing market. The NCAA then supplied
evidence of the pro-competitive effects. Finally, the plaintiffs, former college athletes, had to
show that the same supposed pro-competitive objectives can be achieved in a less-restrictive
manner. In the end the Court ruled that the restraints negative impact on competition outweighs
any positive effects on competition that the restraints may yield (OBannon v. NCAA, 2014). The
players therefore proved that there was a contract between two parties that unreasonably
restricted interstate commerce and violated the Sherman Acts prohibitions against such
agreements (OBannon v. NCAA, 2014).
The outcome may have been different if the NCAA had proved that maintaining
amateurism increases spectators interest in college football and basketball (Edelman, 2014). But
there is no evidence amateurism or a lack thereof has an effect on spectator interest; however, the
networks are able to present the college sports as something more pure than the professional
televised sports with which they compete for viewership (Futterman, 2015). When Auburn
University was on its way to the Bowl Championship Series football National Championship in
January 2011, the media frenzy surrounding allegations that star quarterback Cam Newtons

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father sought the highest bidder for his sons talents, that storyline did not diminish fan interest in
Auburns games at all. In fact, the viewing audience for the BCS Championship Game was cable
televisions largest in history at the time, with more than 27 million viewers tuning in to see
Newtowns Tigers defeat the Oregon Ducks with a thrilling last-minute drive and field goal
(ESPN Media Zone).
The NCAA would also have to prove the integration of academics and athletics actually
enhances the athletes education experience to justify its no-pay rule (Edelman, 2014, p. 2329).
The Myth of Amateurism in Popular Collegiate Sports
The NCAA argues that its proposal preserves the supposed sanctity of amateurism in
college sports, promotes the competitive balance among Division I teams, increases output
benefits in college sports, enhances the integration of education and athletics and maintains
interest in less popularand less profitablecollegiate sports (Edelman, 2014).
As anyone who has watched television during March can see, the televised broadcasting
of college sporting events has become highly profitable for the NCAA and national broadcasters.
In 2014, CBS paid the NCAA $800 million for the rights to broadcast the annual mens
basketball championship, also known as March Madness. College basketball games are going to
be played regardless, making broadcasting those games, and the accompanying commercial
messages, extremely profitable and immensely competitive (Sanderson & Siegfried, 2015).
Research of historical and current affairs has revealed that the NCAA fails in supporting
the pursuit of excellence in education, exploits student athletes through its commercial ventures
and, lastly, undermines student athletes status as amateurs. Miller (2012) argues that a pay for
play model may provide athletes with the means to travel home to see family or pay for a night
out with a date. But, she continues, this would inevitably lead to unhealthy tension between

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those student athletes who get paid and those who do not. Paying the athletes outright would
also eliminate any sense of amateurism that, at least at one time, was the foundation upon which
intercollegiate athletics were built (Miller, 2012, p. 1169). This important notion of amateurism
in collegiate sports has played an important role in the legal wrangling over compensating
college athletes.
The NCAA prides itself on protecting the character of amateur athletes by preventing
commercial influences that could compromise their athletic integrity (Chin, 1993). This
amateurism ideal, which was previously associated most notably with Olympic athletes, has
become unpersuasive since Olympians also are considered amateurs but are free to profit from
being featured in commercials and are generally allowed to profit from the use of their likeness
and the promotion of their athletic success. The National College Players Association, a
nonprofit advocating agency founded by former UCLA football player Ramoji Huma,
recommends the Olympic model for paying athletes (NCPA, 2015). He makes the case that if
the schools will not seek further assistance from the NCAA in scholarship funding, these schools
should allow the athletes to make up the difference on their own if they are able. Huma believes
athletes should be able to accept endorsement opportunities and participate in the free market
just as whiz kid software designers, brilliant engineers, or the most-talented musicians can.
College athletes should have the same rights to secure employment and generate commercial
revenue as other students and US citizens, Huma writes (NCPA, 2015).
In 2011, the NCAA proposed an amendment to their bylaws that would allow universities
to engage in commercial deals with sponsors. The agreements would allow game footage of an
athlete to appear in television advertisements as long as they mention the name of the athlete's
school. Companies could publicize sales events by saying athletes would be present to sign

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autographs. The NCAA rationale for this proposal was to accommodate advancements in
technology and facilitate more authentic promotions associating schools with their sponsors
while maintaining the Associations fundamental principles that prohibit commercial exploitation
of student athletes. (NCAA, 2011). The NCAA put a positive spin on what looks like another
opportunity to benefit from the athletes participation in primarily money-making promotional
activities. One former athletes response to the NCAAs proposal highlighted many student
athletes frustrations. He asked what seems to be a perfectly reasonable question under the
circumstances: If I am helping to generate so much money, where is my cut? (Solomon, 2011).
Looking to the Future
There are other important issues that touch on matters of amateurism and equity across
different sports, and even among teammates, that will most likely shape how these matters are
decided in the future. For example, while the schools may favor an arrangement like that
outlined in the NCAAs bylaw amendment because the money to compensate athletes (beyond a
scholarship) would come from external resources, critics say this would ultimately be harmful to
the cohesiveness of a team (Miller, 2012). This thinking provides that when an advertiser wants
to sell its product it will use only the most popular, star player to promote that product, to the
exclusion of his teammates. If some players are getting bonuses and others are not, these critics
argue, the sense of comradery is at stake (Miller, 2012).
Some cases are also likely to continue claiming that Title IX discrimination arises if
college basketball and football players are compensated for their efforts beyond the simple
activity of sport. If the university pays college football and basketball players additional stipends
it would also have to provide proportional stipends to female athletes, this thinking goes (Haden,
2001, 679).

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Some commenters also argue that athletes are more likely to stay in school if they are
compensated. But researchers have found that Division I college football and basketball players
from low-income families are most likely to leave college to play professionally (Edelman, 2014,
p. 2346). The low-income athlete, if an elite professional prospect, may not decide to stay
enrolled when million-dollar incentives await at the next level.
In 1929 a foundation investigation and report highlighted many of the same issues and
problems facing the NCAA and college athletes today. The Carnegie Foundation for the
Advancement of Teaching found that athletic programs, especially their time requirements, posed
heavy burdens on the athletes, and that coaches were far more concerned with the athletics and
winning than with academics (Miller, 2012, 1145). Unfortunately, it seems the same problems
will continue to plague the organization for years to come.
Todays controversies largely revolve around whether Division I football and basketball
players should be compensated for their efforts on behalf of their schools. There are two
undeniable facts at the heart of these controversies: First, student athletes efforts can generate
millions of dollars for the NCAA and its participating colleges and universities. And second,
student athletes themselvesclearly the essential ingredient to these money-making enterprises
are restricted to receiving compensation largely in the form of scholarship awards, which often
fail to cover the full costs of attending college in the 21st Century. Given this situation, many
commenters argue that student athletes should receive compensation that at least covers the full
cost of attendance. Many go even further and argue that athletes participating in revenuegenerating sports should be paid a portion of those profits, either while in school or after
graduation. Lastly, there also is a push to allow student athletes themselves to profit from the
commercial marketing opportunities that their skills generate. As the litigation surrounding these

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issues makes all too clear, resolving the legal and ethical questions that arise from these
arguments significantly complicates any effort to establish an agreed-upon, fair and reasonable
compensation regime for intercollegiate athletes. Does this mean the old rules are unlikely to
change? Only time, the NCAA, student-athlete advocates, and courts across the country will tell.

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