Run Like a Business

For years, I have heard my colleagues alternately either yearn for the university to be run like a business or bemoan the fact that it already was.   And although the administrators at Enema U frequently claimed they “were going to run the university on sound business principles”, such claims were always just noise from people who had no idea how a business is run.

There are actually very few people in the university who have run businesses.  This is understandable when you remember that a state university is, despite claims to the contrary, a government agency run by bureaucrats who have little or no experience in the real world.  There are many ways to become a top bureaucrat, but few of them involve competency.

One portion of the university, however, is about to become part of the “business world”, and it appears that no one is noticing.  One element of college football and basketball are about to become semi-capitalist and this is going to drastically change the nature of college athletics:  Male college athletes are going to be paid, and that is going to change everything.

At this point, I’m sure that some readers are yelling, “No, they aren’t going to be paid, they can only profit by selling their likenesses to advertise products.”  True enough, but if you think that will not effectively mean the same thing as regular paychecks, you don’t understand the way college athletics work.  The NCAA already has a slew of rules to make sure that colleges can’t unfairly give benefits to players, and athletic programs have ignored and bypassed those regulations for years.  

Thirty-five years ago, the House of Representatives passed limits on how much a congressman could be paid to deliver a speech, ending a long system of legal bribery whereby a lobbying group could pay the congressman a small fortune to stand up at a rubber chicken dinner and publicly announce, “Thank you.”  Jim Wright, the Speaker of the House promptly wrote a very short book containing a few of his speeches, some attempts at prose, and a little corn-pone humor.  At only 117 pages—many of which contained only one word—it was more of a pamphlet than a book.  Nevertheless, lobbying groups and unions immediately bought the bribe…I mean, book, by the case. 

Booster clubs and donors could easily do the same thing with players, perhaps paying a large sum for the right to use the players' images on goods they never intend to produce in quantity.  Several universities (including Enema U) already have private foundations that quietly subsidize coaching salaries, never, ever releasing that information to the public.  Here in New Mexico, various groups have been fighting for decades to have these ‘secret' foundations open their books for public scrutiny, with little success.  Lawyers representing the players will work out many ways to twist the system into what will effectively be salaries.

Currently, the key to having a winning collegiate football team is to have a great coach.  Since the NCAA does not regulate coaching salaries, a handful of schools can offer million dollar contracts to the dozen or so top coaches capable of all but guaranteeing a winning season.  For every team like Texas A&M, Tennessee, Alabama, or Iowa, there were dozens of schools that couldn’t afford to bid on winning one of a dozen or so top coaches available.  The rules, however, have changed:  There are far more good players available than there were coaches, and there are many combinations of good players that can make up a winning team.

The race to recruit players based on salary will benefit those schools with deep pocket donors.  Top athletes, represented by agents, may well demand salaries competitive with players on NFL teams.  And under the new NCAA rules, students will be able to open negotiations with schools three separate times during four years of eligibility.  After a school spends a small fortune to attract a star player, you can imagine the pressure some faculty members may find themselves subjected to if that amazing quarterback reads at the third grade level.

While there are several public colleges that have the funds to allow them to spend a few million dollars to hire the best coaches, there are far fewer with the kind of uber-rich donors to enable a team to pay the top dollars necessary to build that winning team.  This will create a wider division between the top schools and those schools with more financially modest donors.

While no one knows exactly how and how much this change will shake up college football, there are two obvious questions.  First, how will colleges reconcile the new money spent on male players with Title IX, which mandates equal spending between sports for men and women?  There are no sports for women that can generate the type of high-dollar donations to pay an equivalent amount to female players, meaning that their ‘salaries’ will be much lower.  I’m not exactly sure what the basis of the lawsuits will be, but I’m confident that lawyers will be able to come up with something.

The second question is what to do about a donor who has unlimited resources.  What if a billionaire (say one of those new crypto currency gazillionaires) decides to build an unbeatable team at his alma mater?  We have recently seen just such a person spend billions on what appears to be a whim, so why not build a winning football program for far less money?  The NCAA allows each university 85 full ride scholarships, so if you spent a $1 million apiece to recruit the top players, throw in another $10 million for a coaching staff, you should be able to have an unbeatable team for about a quarter of what a new yacht would cost.

NFL teams recognized this problem years ago, instituting a cap on wages and locking players into multiyear contracts with strict collective bargaining agreements.  College athletics has no such protections, at least not yet.  I’m not sure what all the changes coming to college football will be, but we can be certain that athletic programs are going to spend more money than ever before…and be no more transparent about it than now.