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Sunday, August 21, 2011

"Dishonest" College Coaches Are Agorist Heroes

This story is interesting. There was a scandal at Miami, where "inappropriate" payments were made to players. This follows immediately after a scandal at Ohio State and several other top teams.

The NCAA has colluded to fix student athlete salaries. The only payment a player may receive is his scholarship. The actual value of a student athlete is much higher.

The schools make millions of dollars off football, but only return a pittance to the players.

A scholarship is worth around $20k, but a lot of that is funny money. The school is charging the athletic department $20k, and adding that money to the school's general fund. Most football players work almost full-time on football, and don't take serious classes. For example, a very low percentage of student athletes take advanced calculus or other advanced engineering or science classes.

Even if you assume the scholarship is worth the face amount, it's a ripoff. The NFL minimum salary is $375k. It is ridiculous to think that a player is worth only $20k/year as a college player, and then $375k/year as a pro. The high draft picks and star players get even more, although the new CBA restrained that a bit. (Not every college player gets to play in the NFL. However, many college players are probably worth more than their $20k/year tuition, even ones who don't qualify for the NFL.)

When I was in graduate school, I taught Math classes in exchange for tuition+stipend. In fact, I chose one school over another partially because it made me a better offer. Why not let players play football for tuition+stipend? Why not let schools compete with each other on salary offers?

The NCAA insiders are exploiting their monopoly position. The NFL, also having a monopoly, has no minor league system, with college functioning as the minor league system. The NFL won't accept a player until he's been in college for 3 years. This forces star players to work for a pittance in the NCAA, instead of turning pro.

The "dishonest" coaches realize that their players are way underpaid. They arrange for under-the-table payments, to make sure that players are fairly compensated.

The NCAA has created this problem, by capping player compensation at tuition. The only way to eliminate under-the-table payments is to declare that players can be paid their fair market value, with free market competition and no payment cap.

That would be an embarrassment, because the top players might earn $50k/year or more. However, it would be less embarrassing than under-the-table payment scandals. Also, schools would be forced to compete on salary, making football less of a lucrative gravy train for NCAA insiders. What's wrong with paying players $50k/year, when they're earning millions for the school?

If it's against NCAA rules to pay players their fair value, then honest coaches will find a workaround, by paying players under-the-table. The rule-breaking NCAA coaches aren't criminals. They are heroes, because they're making sure their players are fairly paid for their services. The real criminals are the NCAA and NFL, exploiting their monopoly to force players to work for artificially low salaries.


Anonymous said...

In one company my boss suggested I claim for a lot of expenses. I had a low salary at the time and I think he was feeling guilty.

I declined his offer as I was worried I could get into trouble later.

Now I'm older I can understand his reasoning. I was working in a small company and the effective tax rate was just over 40%.

I guess that is why some companies don't pay overtime. It is just nasty to have that cash all eaten up with taxes.

For non-managerial and workers on low or entry level salaries, I don't think overtime should be taxed. Software developers are sometimes paid low wages and asked to work long hours. It isn't fair when they get squished.

FSK said...

One neat benefit is employer-paid lunches. The cost is double, if I buy my lunch with after-tax money.

Another neat benefit is "transit checks", which let you buy your subway fare with pre-tax dollars.

Unfortunately, my current employer does neither of those.

Anonymous said...

After I left this company, I heard they had a pizza day at work.

Big deal! These people were raking in serious cash and when I was there myself and one other employee barely made enough to pay the sort of rents typical of a big city.

Quite shameful really. Millions of dollars were coming into a small company of just over 10 people and yet the wages were low.

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