This Blog Has Moved!

My blog has moved. Check out my new blog at

Your Ad Here

Friday, September 24, 2010

College Football Counter-Economics

Reggie Bush lost his Heisman Trophy. He accepted under-the-table payments while playing at USC. More importantly, he got caught. According to NCAA rules, that makes him retroactively ineligible.

Universities make a ton of money off college/professional football. It's hypocritical for them to profit, while demanding players be unpaid.

According to NCAA rules, a college athlete may receive no benefits, other than his scholarship and room and board.

Why does the NCAA have a rule forbidding player cash compensation? To keep their costs down, the universities collude. Under the guise of "They're amateurs!" and "The NCAA has rules!", college athletes may not be paid.

When I was in graduate school, I taught calculus and received payment. Nobody said that such an arrangement was evil. Why it immoral for college athletes to get paid?

The NFL has a rule that players must have completed at least 3 years of college, before being eligible. That's a subsidy to college football. There's a Federal law that prohibits the NFL from playing games on Saturdays during college football season. That's another State subsidy of college football.

There's a new professional football league, the UFL. The UFL is attempting to compete with the NFL. They're preparing to compete during the anticipated NFL player lockout next year.

The UFL could arbitrage underpaid college athletes. They could offer a 3 year guaranteed contract for $1M-$5M, for players who aren't NFL-eligible yet. That would be tempting, even for a star player, because an injury may end his professional career.

It is ridiculous that a college football player's fair salary is $0, when he gets a $10M+ contract a year later after joining the NFL. The star players are clearly underpaid. The players with no realistic NFL prospects or potential NFL benchwarmers are probably fairly compensated in college.

A university athletic department is technically "non-profit". "Non-profit" is a code word for "Ridiculously profitable, but we cook our books to make it look like we're breaking even."

Consider the college athlete's tuition. That is charged to the athletic department's budget, and credited to the university's general fund. The actual cost of education is far less that the official price.

For example, I was a TA teaching calculus. I figured that the students (or State) were paying about $3k per student per class. (That was in 1999; tuition is higher now.) The class size was 32. That's approximately $100k in revenue per class, and I was getting paid much less than that. My class was ridiculously profitable for the university.

The rules say that college athletes must be unpaid. There's a lot of money at stake for colleges who win. This creates an incentive for under-the-table payments.

The mainstream media denounces players and coaches who arrange under-the-table payments. Instead, they should be praised for practicing counter-economics. These "dishonest" coaches are in fact making sure that their players are fairly paid for their services.

The real problem is that the NCAA rules are defective. Due to the State, prospective professional athletes are forced to work for free, while colleges make a ton of money off them. Instead of blaming the stupid rules, the State media cartel blames people who dodge the stupid rules.

Mainstream media coverage is, as usual, biased. They don't cover the story properly. The people who break the stupid rules are unfairly blamed. The stupid system is never blamed. The NCAA has an incentive to forbid player payment. They're a monopolistic cartel keeping down their costs.

I'd like to see Reggie Bush say "Hey! USC made a lot of money off me! Why are you idiots giving me a hard time, because they tried to pay me fairly for my labor?!" Unfortunately, Reggie Bush would be loudly denounced if he said that. He would be portrayed as greedy. He'd probably lose his endorsement deals.

A coach who breaks the NCAA rules is practicing counter-economics. He's making sure that his players are fairly paid for their services. Even when payment is forbidden, people find a way to pay the fair market value. A rule-breaking coach isn't a scumbag. He's a businessman arbitraging the unfair State rules.

1 comment:

Scott said...

Agreed. This also leads into how most state and private university systems are total scams in every possible way.

Not all of course.

Just 99.9%.

This Blog Has Moved!

My blog has moved. Check out my new blog at