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Monday, March 30, 2015
The NCAA Business Enterprise: Crumbling Under its Own Success?

We just enjoyed perhaps the most exciting college sports weekend of the year: the Regional Finals of the NCAA's March Madness Tournament. Four men's basketball games are played, in sold out arenas (or domes), in front of a staggering number of television viewers. The demand for this event is so large that the broadcast rights of the March Madness tournament were contracted to CBS/Turner for $10.8 billion over 14 years. And therein lies the rub: is the NCAA about to crumble under its own success?

This weekend, three articles were published that addressed this very issue. First, Mark Alesia, an outstanding reporter for the Indianapolis Star, dug into the financials of the NCAA and wrote that the NCAA is "poised to top the eye-popping mark of $1 billion in annual revenue." As the NCAA's annual revenue has increased each year since 2001, legal claims have arisen on behalf of college athletes looking to share in this economic growth.

Our own Michael McCann spoke with Alesia for this article, and aptly stated "This is a transformative era for the NCAA, and at the end, the student-athlete will have a different role. There will be changes to amateurism." But what about defining this seemingly simple concept of 'amateurism?' Allen Sack, professor at the University of New Haven, states that "amateurism is whatever the NCAA arbitrarily decides to call it."

The second article over the weekend was an opinion piece written by Smith College economist Andrew Zimbalist titled "Paying College Athletes: Take Two." While everyone tries to frame the debate as 'should we pay college athletes?', Zimbalist accurately reminds us that "college athletes have been paid since the 19th century."

Perhaps the heart of his article can be summarized in the following quote:
"If we want to preserve the educational model of intercollegiate athletics, here's a more attractive option: Take the definition of amateurism away from its current arbitrary, hypocritical and morphing state imposed by the NCAA and follow the lead of the AAU and other amateur organizations. The working definition should be simple: an amateur athlete is one who is not paid a salary for playing his or her sport."
This definition, under Zimbalist's concept, would allows institutions the ability to: 1) provide full cost of attendance; 2) year-round health insurance; 3) lifetime health insurance for athletically related injuries; 4) disability insurance and; 5) due process. YES PLEASE!

The third article demanding your attention is the wonderfully written piece "A March Madness Underdog: Free Enterprise" by Allysia Finley in the Wall Street Journal. In her article, Finley interviews none other than noted NCAA critic Jay Bilas who explains why players should be paid, and how to overhaul the 'exploitive' NCAA.

Using eloquence and humor, Bilas argues for a system that allows college athletes to be paid what the market deems them to be worth. Note the term 'allows' as he states "I'm not advocating and never have that some athletes should be paid. It might be a distinction without a difference to some, but what I'm saying is that it shouldn't be disallowed."

Last month at the MIT Sloan Sports Analytics Conference, I was lucky enough to moderate a panel titled "Amateurs or Industry: NCAA Reform." Joining me on the panel was the NCAA's Oliver Luck, Northwestern AD Jim Phillips, the NBA's Rod Thorn, and some sports lawyer named Michael McCann. MIT has just released the conversation and, while I'm biased, I think it's well worth your time to watch.

As you get ready for this coming weekend's Final Four in Indianapolis (note: that's where the NCAA is headquartered) I encourage you to read these three articles and watch this video. Think. And then debate with others. What's right and where does college athletics go from here?


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