Literature Review #4

Markets: Cartel Behavior and Amateurism in College Sports

Lawrence M. Kahn

MLA Citation:



Kahn, Lawrence M. "Markets: Cartel Behavior and Amateurism in College Sports."Latest TOC RSS. American Economic Association, Winter 2007. Web. 13 Oct. 2013.


Summary:


This scholarly study examines the business habits of the NCAA and cross-analyzes it with the behavior and theory of cartels. In the economic analysis, author Lawrence M. Kahn discusses the decisions made by the NCAA and how those decisions effect overall revenue. He concludes that restricting payment to the players while preserving amateurism and generating revenue is evidence of cartel behavior. He also discusses the racial disparity in regards to where the money is going. In other words, the average athlete who is predominantly African-American is not getting paid while the predominantly white NCAA executive is taking in large revenues.


About the Author:


Lawrence M. Kahn is a Professor of Labor Economics and Collective Bargaining at Cornell University. He is also a Specialized Co-Editor of Economic Inquiry in the field of sports economics.


Key Terms:


Under-the-Table Payment- refers to the compensation many college athletes receive secretly and illegally from perspective talent agents.


Monopsony- a market situation in which there is only one buyer


Quotations:


"Evidence that the best college athletes are paid below a competitive level of compensation is based in part on estimates of the marginal revenue product of these players" (Kahn 211).


"Of course, going to college may have smaller benefits for those who don’t graduate, and low graduation rates in big-time athletic programs have received considerable publicity" (Kahn 213).


"Football and men’s basketball are by far the most lucrative sports, raising $12.97 million and $4.25 million, respectively, in revenue per Division I-A school in 2003, or about 59 percent of total revenues" (Fulks, 2005a, pp. 30, 48).


Value:


This is the first economic review I have looked at. It provides a supplement to the conclusions of the author in the form of economic analysis and numbers. This comes in handy because the motivations behind the behavior of the NCAA are largely because of the economic value of their decisions. This article is in support of student athlete compensation, and could be used in the counterargument against amateurism.

Literature Review #3

College Athletes Studies Guided Toward 'Major in Eligibility'

Jill Lieber Steeg

MLA Citation:

Steeg, Jill L., Jodi Upton, Patrick Bohn, and Steve Berkowitz. "College Athletes Studies Guided Toward 'Major in Eligibility'" USA Today (2008): n. pag. Web.

Summary:

This article provides an insight into the life of a college athlete that shows the darker side of college sports. It discusses how schools are urging their student-athletes to take up easier majors, and promoting an overall sense of "athletics first, academics second." While it maybe a mechanism for students to cope with the demands of being a student-athlete, picking an easier major is debatably making the idea of "amateurism" obsolete. The authors argue that the schools influence on the student-athletes borders grounds for academic fraud.

About the Author:

Jill Lieber Steeg is the owner and co-founder of Steeg Sports Management and Media Consulting. She is also a former senior write for both USA Today and Sports Illustrated. She has been nominated for the Pulitzer Prize twice and is an award-winning sports journalist.

Key Terms:

Clustering: the tendency of athletes to pick similar, less-challenging minors.

Social Sciences: the main degree many student-athletes at Kansas State University were "clustering" in.

Quotations:

"Cline says he found not-so-demanding courses that helped him have success in the classroom and on the field but did little for his dream of becoming a veterinarian" (Steeg).

"Some athletes say they have pursued — or have been steered to — degree programs that helped keep them eligible for sports but didn't prepare them for post-sports careers" (Steeg).

"Education specialists say such clustering raises a range of potential problems, including academic fraud; certain majors and classes having dubious academic requirements; and coaches and athletics academic advisers inappropriately influencing students' decisions on majors and classes" (Steeg).

Value:

This article presents possibly the best example of how privatization is effecting college sports. It shows an interesting trend that schools are starting to show. That is, pushing student-athletes more toward athletics and less toward academics. This definitely takes away from the idea of amateurism, and exposes the seemingly corrupt side of the NCAA and its constituents.

"

"

Th

Literature Review #2

NCAA Division I Athletics: Amateurism and Exploitation

Anthony W. Miller

MLA Citation:

Miller, Anthony W. "United States Sports Academy - "America's Sports University"" NCAA Division I Athletics: Amateurism and Exploitation. N.p., n.d. Web. 05 Oct. 2013.

Summary:

This article is interesting because author Anthony W. Miller walks the line between multiple arguments regarding whether college athletics is considered amateurism or exploitation. He discusses three main arguments, two of which are cited to a man named Wertheimer. Both of Wertheimer's arguments support the general idea that student-athletes are being exploited because they are making the schools a revenue that they see no part of. The other argument is one of "mutual exploitation" which references the idea that colleges and student-athletes are mutually exploiting each other. This brings an interesting view of the debate because it is neither pro-athlete or anti-athlete.

About the Author:

Anthony W. Miller is the United States Deputy Secretary of Education under President Barrack Obama. He graduated from Purdue University with bachelor's degree in industrial engineering and received an M.B.A. from Stanford Graduate School of Business.

Key Terms:

Amateurism: reference to the fact that college athletes do not receive compensation for athletic services.

Exploitation: an individual gaining something by taking an unfair advantage of another individual.

Quotations:

"Although the NCAA and the schools reserve the right to use a player’s images and names for commercial purposes, no athlete may be endorsed by or receive any payment from businesses or corporations" (Suggs, 2009; Murphy & Pace, 1994).


"In other examples, athletes have been known to become student-athletes for the sole purpose of receiving expert instruction, media exposure, and training. As a result of those benefits, their future earning power increased" (Kahn, 2007).


"Deciding how to compensate student-athletes more fairly could potentially result in completely restructuring intercollegiate athletics. If the NCAA and its member schools truly desires to protect their student-athletes 'from exploitation by professional and commercial enterprises,' then they will be forced to reexamine their own practices" (2010-2011 NCAA Manual, 2010, p. 4).


Value:

This article references the arguments of Wertheimer that are in support of compensation, but also analyzes the argument that the exploitation may be mutual. Although the conclusion of the piece seems to be on the fence, it is more than likely that the author is in support of Wertheimer's arguments. The real value to my research, however, comes in the form of the aforementioned third argument pertaining to mutual exploitation. This is one of the "outside the box" arguments that I am interested in.

Research Blog #5: Bibliography with Five Scholarly Sources

Working Bibliography

Brill, John. "Should College Athletes Be Paid?" The Shirley Povich Center for Sports Journalism RSS. N.p., 30 Apr. 2013. Web. 05 Oct. 2013. 

Burton, Richard. "Athletes Are Already Paid With Their Education." US News. U.S.News & World Report, 02 Apr. 2013. Web. 07 Oct. 2013.

Kahn, Lawrence M. "Markets: Cartel Behavior and Amateurism in College Sports."Latest TOC RSS. American Economic Association, Winter 2007. Web. 13 Oct. 2013.

Miller, Anthony W. "United States Sports Academy - "America's Sports University"" NCAA Division I Athletics: Amateurism and Exploitation. N.p., n.d. Web. 05 Oct. 2013.

Sack, Allen. "Should College Athletes Be Paid?" Www.newhaven.edu. N.p., 07 Mar. 2008. Web. 06 Oct. 2013. 

Zimbalist, A. S. Unpaid Professionals: Commercialism and Conflict in Big-Time College Sports. Princeton, N.J: Princeton University Press, 2001. Print.

Research Blog #4: Research Proposal

Working Title: College Athletics and Compensation

Topic

        I look to analyze the ongoing debate of whether or not Division I college athletes deserve monetary compensation for their contributions to their perspective sport. There will be analysis from both sides of the argument as well as a glance at the world of college sports in general. It is purely an analytic approach, meaning there will be no opinionated statements made.

Research Question

        Do Division I college athletes deserve monetary compensation for their contributions to a school’s athletic program?

Theoretical Frame

        In general, there are two different major theories regarding the debate of college athletic compensation. In the scholarly article, “Should college athletes be paid?” author Allen Sack describes one of those theories as the “amateur model.” In a nutshell, he supports keeping college athletes uncompensated because they are viewed as amateurs in their sport. This opinion is part of the larger theory that college athletes are attending college for an education first, while playing sports as an extracurricular. In a different article also called “Should College Athletes be Paid?” author John Brill also acknowledges the model of amateurism. He states, “A key point as to why the NCAA would not want to pay athletes is to maintain the amateur status of its reputation.” However, the article also goes into detail about why this may be wrong. Brill continues to discuss the use of the model of amateurism as a “guise used by the NCAA to take advantage of gifted athletes…” This is where the second theory is argued and the larger picture unveiled. The second theory basically states that the athletes are cash cows for the universities and are entitled to some of that compensation. Brill cites the granting of sports scholarships or easier admission (due to playing a sport) as flaws in the amateur model.

        Any way one looks at it, this debate has its fair share of angles and makes for a great analytical piece. I intend to guide this research paper around the two major theories while also covering the less-obvious arguments. This has been a debate for a long time now, and there is no lack of information in regards to this topic. I believe this is a very interesting topic that also happens to be practical, seeing as many of us are or have friends that are student athletes.

Research and Plan

        There has really not been a definitive study done to sway people in either direction when it comes to college athlete compensation. This is merely because college athletes have never been paid and it is against the rules of universities to do so at the current time. However, the article “NCAA Division I Athletics: Amateurism and Exploitation” gives a simpler outlook on the debate by defining the words outlined in the title- amateurism and exploitation (Miller). This article discusses the history of college sports and how the term “student athlete” was born. It also theorizes the rationalization the NCAA takes for its views and actions while discussing the arguments of the pro-compensation supporters. This proves to be a good resource because it is somewhat less opinionated and more “on the fence” when it comes to the debate. This could take some of the author bias out of the argument.

        In the first article I mentioned, “Should college athletes be paid?” there is an adequate control group presented for a potential experiment regarding this debate. While discussing amateurism, Sack describes the Ivy League and Division III colleges as more effective at promoting amateurism because those schools do not grant benefits such as athletic scholarships to athletes. Examining these schools and comparing them to the larger Division I schools could provide a great pseudo-case study in regards to the debate. I am looking further into this, although the literature on amateurism in Division III athletics is much more scarce than that of Division I.
Amongst the mountains of remaining literature, I am also looking at “Athletes Are Already Paid With Their Education” by Richard Burton and Unpaid Professionals by Andrew Zimbalist. In his article, Burton points the finger at the athletes themselves as the reason for lack of compensation. He concludes that the students have shown a great deal of satisfaction in regards to the non-financial benefits of being a student athlete, pushing the possibility of compensation further and further out of reach. This sparks the possibility of potential interviews with student athletes to get their take on this idea and see if that theory really holds up amongst the athletes at Rutgers. Zimbalist’s book goes into much greater detail, ranging from the history of college sports to the modern implications of compensation of student athletes.

Literature Review #1

College Athletes Are Already Paid With Their Education

Richard Burton

MLA Citation:

Burton, Richard. "Athletes Are Already Paid With Their Education." US News. U.S.News & World Report, 02 Apr. 2013. Web. 07 Oct. 2013.

Summary:

In this article, Burton provides a short but very concise argument against the the payment of college athletes. Rather than citing explanations as to why athletes do not deserve pay (like most anti-compensation enthusiasts), he tries to expand the idea that college athletes have given up their right to pay because they have displayed a certain sense of satisfaction with non-financial benefits of being a student athlete. He believes that the education the players receive is payment enough, but also eludes to the fact that many student athletes do not attend class and fraudulently breeze through the academic side of college. The blame is pushed more onto the student athlete rather than the institutions.

About the Author:

Richard Burton is the David B. Falk Professor of Sport Management at Syracuse University. He also formerly served as the CMO of the U.S. Olympic Committee. He has a long history in the sports and entertainment fields, having worked for the National Football League, Nike, and Universal Studios, amongst others.

Key Terms:

Educational Asset: the mental enhancement student athletes gain from attending a university.

"First Law of Capitalism": simplistic explanation for why the NCAA does not pay its athletes.

Quotations:

"However, since you can't trade knowledge (i.e., mental enhancement) for an immediate financial asset, higher education is often (and falsely) assumed to have no value for athletes" (Burton).

"...the NCAA, major BCS conferences, big-time universities and well-paid coaches are all expert at practicing the first law of capitalism … which is to capitalize on inefficient suppliers" (Burton).

"But I predict, someday, in the not too distant future, college athletes will learn they are leaving money on the training table and they will grasp that the whole NCAA pyramid crumbles unless they perform" (Burton).

Value:

This article shows a unique argument in the debate for college athlete compensation. It really does not take a side, but rather puts the blame on the athletes. This creates a very interesting discussion point for analysis because it is not necessarily bias toward either of the two theories in the debate.

Research Blog #3: How Might Privatization Connect to your Topic?

The debate as to whether or not college athletes are entitled to some form of compensation relates to privatization because it is literally a result of privatization. Just as the word suggests, the reason schools have the choice not pay their athletes is because they are just that, private. Don't get me wrong. Rutgers does not pay its athletes, and it is not a private school. However, when we look at the broader definition of privatization, we realize that most schools are in it for the money (even if they are technically not-for-profit). Therefore, it is simply not a sound business decision for schools to pay athletes if they do not have to. As more and more schools choose to privatize, they have more and more control over their fate and less authority to answer to. Student athlete compensation has never been allowed since the birth of the NCAA and will likely never happen if the trend of privatization increases.

Research Blog #2: Scouting the Territory

After some thought, I decided that my original topic of whether college athletes should be paid or not is plenty sufficient to research. However, I have narrowed it down, with the assistance of Professor Goeller, to less of an opinion piece and more of analytic display of the the general views of college sports.

Upon an initial google search, there is plenty of material to base my analysis on. Many of the first hits are scholarly articles which will be a big help as they are the most credible of the sources. The first one that I looked at was this:

http://www.newhaven.edu/20719.pdf
This short article takes a negative stance against the payment of college athletes, particularly for those playing college basketball.

There were also these articles:

http://povichcenter.org/should-college-athletes-be-paid-should-there-be-an-age-restriction-for-pros/
At a glance, this article dives deeper into the attitudes many have toward college sports. Overall, the author is supporting payment for players.

http://books.google.com/books?hl=en&lr=&id=Lp6TxXFZ7xEC&oi=fnd&pg=PA1&dq=should+college+athletes+be+paid&ots=RMrY2bRWFS&sig=4jbWgLkfopkaTK6ylPeNOGOaiM8#v=onepage&q=should%20college%20athletes%20be%20paid&f=false
While skimming the available content of this book, I realized it takes a negative view on the NCAA and looks toward the moral obligations of the schools.

These were just three readings that provide a huge insight into my research topic. The best part about researching this debate is that it is so complex. There are many angles and arguments to each side and it is interesting to see how the different sides view college sports and what that says about privatization in general.