The Ethical Issue Surrounding Not Paying NCAA Athletes

In the United States, there are over 420,000 NCAA student-athletes at over 1,000 member institutions. Across all sports in all divisions, the yearly revenue for the NCAA is $10.6 billion. The average Football and Men’s Basketball profit at a Division 1 school is $15.8 million and $10.1 million, respectively. The student-athletes at these schools do not see one dime of these revenues go into their pocket. When it comes to debating whether college athletes should be paid, the two most often used terms are amateurism and exploitation. Simply put, collegiate amateurism refers to the fact the athletes do not receive remuneration for their athletic services, and exploitation insinuates someone being taken advantage of in an unfair manner.

The face of intercollegiate athletics has changed drastically in the last two centuries. What started as nothing more than student-organized competitions has turned into what has been described as a sports entertainment enterprise. Students who once went to school only for an education and participated in these kinds of competitions in their free time now often attend these same universities solely for the purpose of participating in sports. In most situations, they end up devoting hundreds of hours to sports-related activities and end up becoming athletes first and students second. The end result is a system that uses students to generate large amounts of dollars for both the NCAA and its universities. NCAA student-athletes need to be compensated due to their direct involvement in revenue production and time-commitments for the NCAA.

Money is rolling into the NCAA, and none of the money is going to the stars of the show, the players. Recently, the NCAA reached a $10.8 billion agreement with CBS/Turner Sports just for the rights to broadcast NCAA men’s basketball tournament until 2024. The players on the court will receive nothing more than a t-shirt. While in contrast, in the NBA the players receive 51 percent of all basketball-related revenue. Similarly, the NCAA just sold their television rights to their Bowl Championship Series games in football for 4 years /$500 million to ESPN.

In the NFL, players would make 47 percent of that revenue. Money from merchandise sales, and even pictures and videos of players go directly to the NCAA and the schools represented. Even if the player has since graduated and become a professional, the NCAA still owns the rights to all footage and images and collects all the revenue. The NCAA is also a nonprofit and is exempt from federal income tax under the 501(c)(3) section of the federal tax code. Most major universities are nonprofits as well, giving them the same tax exemption. This means that not only is the NCAA and the schools making money off of the athletes(based off those numbers), they get to keep double what a professional sports organization would get to keep. (Media Spectrum)

The Video Game industry has grown to over $10 billion dollars as late as 2009, in which the NCAA had over 1 million copies of its games sold ( Clearly, the NCAA and its member institutions receive significant revenue from multimedia form, which even with their large amounts only accounts for a portion of their revenues from collegiate sporting events. Success in championship playoffs add another additional source of revenue, not seen in the dayto-day revenues.

The March Madness Tournament held for the Men’s College Basketball playoffs every year has received $5.2 Billion in ad revenue from 275 different sponsors over the last 10 years. CBS and Turner Networks paid a whopping $680 Million to the NCAA and its member schools for the 2013 tournament alone. There has been an 1,877% increase in NCAA tournament TV rights over the last 30 years, and ranked 2nd only behind NFL playoffs for Total Revenue, Cost per 30 Second Ad, and Total Viewership, ahead of MLB, NBA, and NHL Playoffs. These incredible statistics show the immense popularity, and profitability, of a major college sporting event, which again pads the pockets of schools and administration instead of the students. While some schools have the luxury of making this tournament and receiving these benefits every year, other smaller schools do not, which makes them actually reaching the postseason that much more of a deal for their school. Case in point, 2013 Cinderella team Florida Gulf Coast University.

The small school’s run to the 3rd round of the tournament, saw immediate financial benefits for the school, and the Atlantic Sun Conference. The school guaranteed the conference, the Atlantic Sun, three NCAA tournament units because they will have played at least three games. At $245,500 per unit, that is $736,500 per year for each of the next six years for the conference from the NCAA. Continuing, by the Monday after their 2nd round win, sales for the month of March compared to the same time last year, were up 521 % to $34,034 for women’s apparel and hats, and 686 % to $114,870 for men’s apparel and hats. By that Wednesday, still not even a week since their last win, $223,810 was made on the sale of men’s apparel and hats, which topped the same time period in 2012 by 1,240 percent.

The real money to be made, however, is in increased awareness of the university that leads to more applications. From March 21 to March 25, unique visitors to the admissions page on FGCU’s website leaped from 2,280 to 42,793. Overall visits to the school’s website topped out that same Monday at 230,985, not counting the 117,113 who went directly to the athletics page. In the month leading up to FGCU’s advancing to the Sweet 16, visitors to the website had seen a daily count as low as 18,863. Similar to Cinderella team Butler, who received a publicity value of $1.2 Billion during the 2010 and 2011 Tournaments, as well as an applications increase of 52% in that time p, FGCU can expect to see more of the same based on these numbers. The kicker is increasing out of state applicants, who are much more profitable for most colleges and universities. Economists and brothers Devin and Jaren Pope have studied the impact sports can have on university admissions.

Their study titled “Understanding College Application Decisions: Why College Sports Success Matters,” concluded by saying, “-While a sports victory for a given school may not change the awareness of in-state students regarding its existence, the sports victory may present a significant shock in attention/awareness for out-of-state students.” (Pope 1). This instant success for a school is sometimes short lived, yet when capitalized correctly by top administration, there is the potential for a particular group of students to have a sustained influence on their schools revenue streams.

A great recent example of players on a college sports team having a direct impact on a school’s revenue is from the ESPN 30 for 30 Documentary, “The Fab Five”. Five freshman played on the University of Michigan’s basketball team in the year of 1990 and saw immediate success on the court, and on the national stage. The very next season, “[…] they instantly became cash cows for their universities. Sales of University of Michigan merchandise went from $1.5 million per year to over $10 million per year shortly after their first season (completed]” (Watkins 1).

These were the numbers after the Wolverines only national title in 1989, compared to when the Fab Five was there. How can a jump like that in revenue, never seen before in U of M’s history, be explained by none other than the athletes’ success on the court? In the documentary, Jalen Rose, one of the members of the Fab Five, mentioned seeing that Nike had released a sneaker named after the group without their permission or consent. They also found themselves being regularly interrupted with trips and appearances around the world to promote a brand that was making everyone rich except for their own families. Baggy Shorts, T-shirts,

Trading Cards, and much more were branded with the Fab Five name. Whatever Nike wanted to sell, they threw on Fab Five, including something as inconspicuous as special black socks. The players feeling of resentment and exploitation was so strong, before a game vs. Illinois in their sophomore years, they wore plain blue shirts for warm-ups as silent protest against the corporate branding. These kids were clearly being exploited from the fact that they were doing all the work on the court, and not seeing any compensation for performance, which is supposed to be the foundation of our capitalistic society.

The Capitalism that helped found our country is based on the ability to make private profit within a competitive market. Individuals with a good or service coveted by others, are rewarded with a price driven by what the market offers. As mentioned before, college admissions officials have noted that a successful postseason in football and men’s basketball can bring a school more than just athletic glory, it can also bring a larger pool of applicants the following fall. This has been solidified in reference by being called the “Flutie Effect”, after a quarterback who led his Boston College team to unprecedented success.

Another individual quarterback who so greatly impacted the finances of his University was Tim Tebow (U of Florida, 2006-2009). In four years at the school, Tebow won 2 National Championships, 1 Heisman Trophy, and was taken in the 1st Round of the NFL Draft. Florida was 47-7 the years Tebow was there, including 3 BCS Bowl Wins and 3 SEC championships. In four years, Tebow has never played in front of anything less than a home sellout, a 4 year total of 2,401,532 people visited “The Swamp” to see him play in his college career. In his sophomore and junior seasons Florida football revenues totaled $132 million, and it might not be inaccurate to suggest that the buzz Tebow brings to the college game played at least a bit part in landing new 15-year TV contracts for the Southeastern Conference. This $2.25 billion contract with ESPN and another $825 million deal with CBS were executed right before Tebow’s junior season.

During the Tebow Years, the salaries of the head football coach and the athletic director doubled. Head Coach Urban Meyer’s salary spiked from an original $2 million deal to $4 million a year. Jeremy Foley was earning about $500,000 when Tebow first set foot on campus, he makes nearly $1.3 million by time he left. Times were so good, in fact, that the Florida basketball and football programs generated enough revenue last year to fund a full slate of vibrant nonrevenue sports, contributing $6 million to the university to help out with academic endeavors in those 4 years.

In just 2008 alone, Tebow’s junior season, the school received $77,000 in No.15 Jersey Sales, added into a 4 year total of nearly half a million dollars just on Tebow jerseys. While all this was happening around him, Tim Tebow continued to receive only his $13,000 per year scholarship to attend the University of Florida. Had revenue sharing in NCAA athletics at this time even slightly mirrored some of the professional leagues, experts estimate Tebow’s yearly value to be upwards of $2.5 Million. While he certainly was not the sole reason the school was so successful during this time, it is extremely hard to ignore the correlation and see the potential personal gains he missed out on

College athletes have been unfairly stripped of individual rights and should be allowed to benefit from the sale of their jerseys as well as profit from autograph signings. If their stardom affords the opportunity, they should be able to appear in commercials and sign endorsement deals. “Not only do they make revenues off them in the institutional form, they prevent the athlete from gaining compensation for his individual rights,” uber-sports-agent Scott Boras contends. “They say you can’t make money with your notoriety, which is an absolute joke.

These young men lose millions of dollars. They lose rights. They deny the athletes the basic right of representation.” If those kids can generate revenues, they deserve to have the money in their pockets, to be able to help their families and use at their discretion. The amount of revenue going into the NCAA and the cost of scholarships coming out is completely out of proportion. In any debate, there are two sides to the story, this one involving the point that these athletes are attending school for free on scholarship, gaining what is supposed to be an invaluable education and degree. However, many students are also attending school for free, based off academic scholarships.

Yet, our Saturdays through the fall and winter are not consumed by watching collegiate academic events on ESPN, CBS, NBC, CSN, and numerous other major television networks. Instead, we are glued to our television sets watching NCAA athletics, players becoming household names and extending their universities brand with zero reward. It seems questionable that these students who pay nothing for their education, yet get to sit home and watch these other students perform, get to enjoy the same benefits of the university without the performance. A national college athletes’ advocacy group and a sports management professor released in a report that the average NCAA Football player would is $121,000 per year, while the average basketball player at that same level would is $265,000. Athletes at the top-tier programs, such as Duke Basketball players, were said to have values over $1 million. Yet, these student athletes just like normal students, technically live below the poverty line at their respective universities.

Common argument number two is based off the premise that being a collegiate athlete is a personal choice. In some respects, this is true and in others, it is not. I, myself, am an NCAA Division III athlete. However, early in my collegiate career I experienced what life was like in the Division 1 world of athletics. Yes, scholarships are nice and having your education paid for is great. However, I have found a way to do almost the same thing at a Division III institution, and now I see little difference in the two levels. I saw kids being used on billboards, magazine covers, television ads, and playing on TV, while I do none of that and we are living the same college lifestyle. These kids are used as an extension of the college brand through their appearance and notoriety in our society.

Through the evolution of NCAA sports turning into big business, players are more treated like employees than students are. Regulations state players can only “officially practice” only so often and even these regulations liken playing a sport in college to having at least a part time job. The reality of the situation is that “optional workouts” are really mandatory ones, and with extra film study required by coaches as well as travel time and recovery, it is equivalent if not more taxing than having a full time, 40-hour a week job. Playing a sport in college is no longer a game, it is strictly a business, and many people in the industry are not afraid to acknowledge this. I am fine with this too, but it is time to treat all areas of the industry like a business, including its “employees”, and not just the ones that are convenient for the top dogs.

Ethically speaking this is a completely relative matter, as I realize that I am entrenched into the world of athletics much further than most people are. When making my decision on this issue it is important to step back and go through a decision-making process. Especially in this case there is a need to use practical reasoning rather than theoretical reasoning, which can focus more on what I believe to be right rather than the facts at hand. When presented with the facts I have been exposed to, it is difficult for me to ignore the issue.

Personally, my solution to the problem involves ethical thinking similar to that of Utilitarianism and Deontological ethics. I reason that any decision I suggest will create beneficial consequences for the disadvantaged parties (Utilitarianism), and that my decision reflects some of my moral principles of human rights (Deontological). While I am not privy to all the minute financial details that encompass compensating athletes, I feel the base of the solution needs to come from the idea of being compensated for performance. If that means on different levels for different players, then so be some may feel that compensating players different amounts is unfair, however, different amounts of compensation for players already exists in college sports. Athletes in sports that do not have enough scholarships designated to field a team have to receive partial scholarships, and some schools scholarships are worth more (i.e. Duke vs. Florida Gulf Coast University).

For example, in baseball each team is allowed 11.7 for a team of 30 players. These 11.7 scholarships are not divided evenly, some athletes may be receiving a full scholarship, while others may be getting one-quarter of a scholarship, while others may be paying their full tuition. It is fair because, despite the old adage that every player is of equal importance, a player who is a star on his or her team is more important to the team than a player who sits on the bench (i.e. Tim Tebow). In every professional sport, and in all fields of work, the stars make more money on their contracts from their employers and through sponsorship deals. It may be an extreme term, but these student-athletes are being exploited. Performance-based compensation is used everywhere else, and it should be used for NCAA athletes as well. Until a form of this performance-based compensation system is put in place, the NCAA is unethical for not paying their athletes.

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