Our own Dave Berri was featured prominently on a story at CBS News about paying college athletes. It’s definitely worth checking out – March Madness? NCAA fights full-court press on player pay. Dave Berri is featured right next to Ed O’Bannon (former UCLA star and currently fighting a major lawsuit for the right to use player likeness) and NCPA president Ramogi Huma. It gives a great look into the situation if collegiate sport with some troubling figures. I will also note it is shockingly done by CBS, who is actually a big player in March Madness TV rights. Kudos to CBS!
Dave’s contribution is suggesting that we have a free market for NCAA players. In essence, there is nothing particular novel or shocking about paying people for work or letting people haggle over salaries. The most simple example Dave gives? He pays someone to help grade his exams. If he didn’t, he’d have to fend off the local Arby’s for labor! Here’s compilation of Dave’s clips. And if for those more down with reading, I’ve transcribed the quotes below!
The NCAA in economics terms is a cartel, which means that they control the entire industry. There’s no competition between the firms — they act collectively. As a cartel they negotiate with their workers. Their workers in this case are athletes. The deal they have made with their athletes is that they don’t pay them. And that has been the deal in place for about a hundred years. And they have made a great deal of money off of these athletes because the athletes do not bargain collectively themselves.
I would advocate it should be a market system. So, what I would say is — If you want to pay them in scholarships — and I think most universities would still probably do it that way — then that’s fine. Then pay them in scholarships. If that’s what gets them onto campus, then that’s fine. If there are athletes that you cannot get on campus with just a scholarship then you should be free to pay them more if you like. If you wants to set up a system where if [the athlete] stop producing [you] release [the athlete] from [their] scholarship or [you] stop paying [the athlete], that’s perfectly permissible also. That’s what we do when people don’t produce in this economy, then they go get jobs someplace else. Everybody does that! That’s considered OK too.
I think if the Ed O’Bannon case is ruled in favor of Ed O’Bannon and the other people involved then yes there would be a fundamental [shift]. Because, it does say that people that generate revenue have to be compensated. I think the NCAA is eventually going to have to do this. They’re going to have to pay their players. They’re generating a tremendous amount of revenue off these people. They’re going to have to pay them at some point. And the NCAA should stop fighting this and sit down and ask themselves what kind of system they think they can get away with. That’s what they should do. Just holding onto the current system is not going to work. They’ve already made steps. They’ve already said ‘Look, we can pay the players three hundred dollars.’ — they have some stipend of three hundred dollars or something like that. I don’t if that’s a month or a week — probably should be a day! They’ve already agreed to pay them. So, now the question is ‘How much?’ And I would argue whatever the market says you should pay them. I think they should stop investigating….I think they’re wasting a lot of resources investigating this stuff. They should stop doing that! Let the universities pay them whatever they think they should pay them. And if you decide to overpay your players? That’s your business.
Every student that we hire to do things on campus we pay. I have a grader. She grades my exams for me. We pay her. We pay her enough so that she will not go work at Arby’s. That is what you do. In a market economy when people do things for you and they generate revenue for you, you pay them. Everybody does this. Everybody who is arguing the players should not be paid, have a job where they are being paid by somebody else. And if you told those people ‘We have a rule that says cannot get paid. Those are the rules.’, they would sue. That is not a rule that would stand up in court. Or at least, it should not stand up in court in this country.
Additional notes (from Dave Berri):
Dave had a few comments he wanted to end this post with. Take it away Dave!
Just wanted to add a few comments (beyond everything Andres Alvarez did above). First, this interview was filmed at SUTV (our television studio on the Southern Utah University campus) last week. Brian Montopoli – of CBS News – conducted the interview. As with most interviews I do, the questions are asked and my answers are immediately recorded. In other words, this was very much like an exam, in the sense I do not know exactly the questions beforehand. Unlike an exam (or at least, unlike any exam my students takes), my answers have to start right after the question is asked and these answers are recorded for everyone to see.
Given the nature of the exercise, more needs to be said. I do plan on spelling out more of my thoughts on this issue in an upcoming post for Freakonomics and/or Huffington Post. I would agree with everyone in this story, the college athletes who generate revenue should be compensated for their efforts. Hopefully this story helps more people move in that direction.
And finally, thanks to everyone involved in the story. This wouldn’t have been possible without the amazing work from the people at the SUTV studio and Brian Montopoli at CBS News.
-Dave and Dre