Arnold Ventures is a philanthropic foundation dedicated to tackling some of the most pressing problems in the United States with one overarching goal: to maximize opportunity and minimize injustice. Through this biweekly series of white papers with leading thinkers, Arnold Ventures examines the challenges facing college athletics and raise critical questions about the future of college sports. We are grateful to partner with AthleticDirectorU to continue this conversation. Learn more here.
Part I explains the mythology that has grown up around American college athletics and how the NCAA has maintained it. It also explains the reality of college sports shrouded by the NCAA’s story. Part II proposes a new model to make college sports transparent, efficient, and run for the benefit of athletes and universities alike.
Throughout its nearly 120-year history, the National Collegiate Athletic Association has been very good at articulating its values. In the association’s early years, its founders drew on the rhetoric of the Olympic movement to codify the notion of unpaid amateur athletics on college campuses, “maintained on an ethical plan in keeping and high purpose of education.” This would ensure that athletes gain “that wholesomeness of mind… found in clean, honest and manly sport.”
In January 2023, the NCAA’s Division I Transformation Committee came out with its latest redefinition of these values:
- Elevating Support for Student-Athletes’ Mental, Physical and Academic Well-Being
- Enhancing the Division I Championships Experience for Student-Athletes
- Building a faster, fairer, and more equitable Division I
These values are the story the NCAA tells itself, its members and its athletes. That athletes are on campus to pursue an education and enjoy sports as one facet of their academic careers. But this story leaves out a key fact: this facet is an industry that generates somewhere north of $13 billion a year for colleges, conferences, and the NCAA itself. The work these athletes put into enjoying their sport is recognized in value that accrues mostly to the coaches, administrators and institutions surrounding them.
When an organization seeks to manage itself based on a story instead of its reality, inefficiencies arise. In this case, while espousing the value of amateur athletes, stakeholders in college sports have built the institution into an engine of revenue in Division I football and men’s basketball and a source of institutional branding and marketing at all institutions.
This creates two problems. First, the story that college sports is organized for amateurs playing for the love of their sport creates a number of perverse incentives. The one most in debate today is the fact that athletes in the revenue-producing sports of football and men’s basketball are prevented from accessing the value they create, which is directed instead into salaries, facilities, and the operation of sports that do not generate revenue. This effectively marginalizes female athletes despite federal laws mandating gender equity and transfers economic benefits from a group of primarily Black athletes to a group of mostly white athletes, coaches and administrators.
Second, this story places college sports in a tenuous legal position, albeit one that has survived nearly 120 years. The NCAA has developed a bureaucracy around the concept of amateurism that takes attention away from the business of college sports. But business is governed by laws, and over the past four decades, especially the last decade, courts and legislatures have gutted the NCAA’s ability to define and defend amateurism. The legal system has recognized that athletes have rights in the marketplace and are entitled to some portion of the value they create. Most recently, the U.S. Supreme Court has laid out a road map to dismantle some or potentially all barriers to paying players.
This is a moment in which existential questions about college sports are being raised. The NCAA’s laundry list of new benefits for student athletes falls far short of answering those questions. As college leaders face an uncertain era of declining enrollment, state budget cuts, and public skepticism about the value of higher education, they and their campuses would be well-served to consider a new paradigm of college sports. Such a framework would prioritize transparency and efficiency in an effort to benefit athletes, universities and the community that loves college sports.
The Story of College Sports
The story told by the NCAA is built on a set of stories about what college sports is and how it operates. Having a story is part of being a modern organization: firms, schools, governmental agencies, and other groups of people tell stories about their history and purpose in strategic plans, government filings, “About Us” web pages, and marketing material. Such stories are not merely advertising: They help shape the organization’s structure, hiring decisions, and strategy.
The NCAA is the hero of its own story. It is the steward whose job it is to protect athletes from the dangers of sport. At the entrance to the association’s “Hall of Champions,” a statue depicts football players from the early twentieth century arrayed in the “flying wedge” formation. The NCAA credits Theodore Roosevelt with its founding, after the president called college leaders to Washington to implore them to save football players from dangerous plays like the wedge.
The NCAA as steward
But the NCAA and its members saw a mission beyond merely making the game safer. Over the years, they created a model of sports designed to serve what they saw as the model of a collegiate athlete: a young man right out of high school for whom sports was an avocation, not a vocation. They designed a basket of eligibility rules that barred part-time students, older students returning to college, and those whose grades and test scores did not indicate a likelihood of graduating from college.
In the NCAA’s paradigm, students picked colleges because of academic programs or other opportunities that interested them, so coaches and athletic departments had to abide by increasingly byzantine rules intended to ensure that athletes were treated comparably when they visited campuses. Where it could, the NCAA tried to ensure that teams competed against each other on a level playing field not just in games, but in battles for recruits.
For athletes, the NCAA— the membership, not the staff at the home office in Kansas City and later Indianapolis— designed an amateur model of sports closely resembling the nascent Olympic movement crossing a broad range of (all-male) sport, conducted among the elite cadre of students who entered college as full-time students right out of high school. Other rules were intended to make sports participation align with the traditional bachelor’s degree path, mandating four seasons of eligibility to be completed generally within five years. The NCAA added minimum grade-point averages and SAT/ACT scores for high school athletes to achieve to be eligible for competition, and further standards to meet as college students to remain eligible.
Amateurism and rules
Over the course of the twentieth century, these rules evolved and multiplied, creating jobs for hundreds at NCAA headquarters and thousands in compliance offices at institutions across the country. Sports themselves evolved, with teams becoming racially integrated at faster and slower rates and colleges adding women’s teams in the decades following the passage of Title IX in 1972. After initially opposing the law’s application to athletics, the NCAA began to embrace women’s sport in the 1990s, creating a Woman of the Year award, pressuring colleges to designate a “senior woman administrator” and opening NCAA national committee assignment to people holding the title, and incentivizing schools to add teams in “emerging” sports such as rowing, equestrian, rugby, and bowling.
Through it all, the NCAA continued to tell the story of amateur athletes competing for the love of the game while completing their education. Paying athletes would turn college sports into a “cheap minor league,” in the words of the late former NCAA president Myles Brand. In his memoir, former director Walter Byers described the invention of the term “student-athlete” in the 1950s so that athletes would not be declared employees and thus subject to workplace rules and workmen’s-compensation claims. The ideal of amateurism went largely unchallenged over the decades, with even the Supreme Court mentioning casually in a 1984 opinion that the NCAA had the right to set rules governing competition, academic standards, and amateurism.
Dispelling the Myths
The NCAA’s amateurism story inspired an entire culture in which thousands of students thrived, this author included. College-aged athletes could compete against peers and gain valuable lessons in goal-setting, teamwork, and perseverance. But college athletics have never been organized around helping students grow and develop. Doing so is celebrated, but coaches are rarely evaluated or rewarded based on the personal growth of the athletes in their charge. Instead, particularly in Division I, they are incentivized to win and fired if they lose.
Why? What makes winning in sports so important for institutions of higher education? Because universities win when their teams win. This is not about the pursuit of profit per se; colleges that compete in the NCAA, of course, are state agencies or not-for-profit organizations. Instead, as the economist Howard Bowen put it, colleges raise all the money they can and spend all the money they make in the pursuit of prestige.
The NCAA’s story of amateur sports ignores this pursuit completely. And because the NCAA’s rules and principles are predicated on the story, they fail to address institutions’ motives and incentives when it comes to sports, and they have failed to address changes in the law and culture that impact sports and higher education. As a result, the NCAA is in an extremely precarious place in 2023 as it enters a new reality.
The myth of NCAA control
What was left out of the NCAA’s story? What was the reality it papered over? To start with, college sports was already a major cultural spectacle by the time the NCAA came to be in 1906. That gave schools more of an incentive to grab talent than to pay homage to amateurism. As authors such as Mark Bernstein, Ronald Smith and John Watterson have established, players were being paid to come to campuses in the earliest days of the twentieth century. At most institutions, sports never fell within the purview of the faculty, but were run by alumni groups and university administrators who hired full-time coaches who were paid to win and make teams competitive with their peers.
Over the years, schemes to recruit players grew ever more complicated. But in the early 2000s, the NCAA began losing its credibility both with the public and with its members when it failed to punish the University of North Carolina at Chapel Hill for allowing athletes to take fraudulent classes, and subsequently let coaches off the hook even with taped evidence of bribing recruits and their families.
Another key issue that the NCAA’s story ignores is the paucity of control the association exercises over its members. Although the organization can enforce common rules for games and championship qualifying, each institution sets its own rules for admissions, academic requirements, and other rules for students. Moreover, the NCAA can force colleges not to pay players, but it cannot regulate what they spend on athletic infrastructure or coaches’ salaries. As a result, in most of the country, each state’s highest-paid public employee is a football or men’s basketball coach at the flagship university.
On the face of it, it makes little sense for a national organization to weigh in on which students a college should or shouldn’t admit, whether a course is sufficiently rigorous to merit the credit hours it is worth, or how much an athletic department should pay a coach. But the net impact is that colleges are operating in vastly different environments, and some institutions have structural advantages that always give them an edge over competitors in winning games and attracting recruits.
The myth of the student athlete
Athletes and their families deal with a basic information asymmetry. The know far less about how to evaluate schools, athletic programs, and coaches than those institutions know about how to evaluate them. Scholars such as Caroline Hoxby have found that low-information students are much likely to attend the best institutions for which they are qualified. And many athletes, especially in high-profile sports, come from schools and socioeconomic backgrounds that provide them less information about colleges than more-affluent ones. Moreover, the NCAA’s recruiting calendar is such that athletes may choose an institution when a coach might leave before those athletes ever set foot on campus. Roughly 10 percent of colleges with FBS football teams fired their coaches or saw them resign after the 2021 season. So it is unsurprising that athletes have a difficult time finding the right “fit” in college right after high school.
Next, amateurism has distorted the priorities of players and families who dream of getting a scholarship and invest thousands of dollars into private clubs and coaching sessions to make players competitive in the scholarship market.
The athlete-student
When athletes get to campus, many are overwhelmed by the demands of their sports— even if those sports don’t result in measurable returns to institutions. A 2015 study by the Pacific-12 conference found athletes reporting 50-hour work weeks, leaving them too exhausted to study. Adding to the problem is the trend of games being scheduled to fill television times: Conferences sign deals with broadcasters such as ESPN and Fox Sports where the networks want the big audiences drawn by football and basketball, and fill out empty hours in the broadcast with soccer and gymnastics. (They also do not do enough to market sports with growing audiences, such as volleyball and softball.)
In many sports, schedules stretch athletes beyond what is reasonable for athletic development, much less personal and academic growth. Most sports have a “non-championship season” so that tennis players and golfers compete in fall, not just in spring, and baseball and softball teams can play more than 50 games during the regular season, not counting conference or NCAA championships. As a result, some courses and even entire academic programs are impossible for athletes to pursue. And athletes jeopardize grades and the quality of their academic experience by missing classes because of practices and traveling to competitions.
The elephant in the room
But the biggest issue left out of the NCAA’s story is the boatload of money spent on sports by Division I colleges and universities. According to the Knight Commission, spending on sports has grown faster than academic spending over the past two decades, making athletics a $13 billion industry annually. At the median, universities in Power Five conferences earned $77 million in 2021 in outside revenue— donations, ticket sales, media rights, and income from the NCAA men’s basketball tournament and football bowl games. However, they spent $104.1 million that year, with the balance largely being made up by institutional budget allocations and fees imposed on students.
Most of the revenue coming into college athletics stays with a few dozen traditional powerhouses, while the majority of universities, which cannot generate revenues at the scale of $100 million or more from stadiums, donors, and broadcast rights, depend on institutional subsidies.
What do colleges get from this investment? Prestige. Many observers have tried to quantify this prestige by looking at increases in student applications, the academic qualifications of students, donations, state legislative qualifications, and other objective outcomes that might be associated with athletic prestige. The evidence is limited. McEvoy (2005) found a positive relationship between football wins and applications in the subsequent year, but none such for basketball or volleyball. Humphreys (2006) found that colleges with Division I football teams had higher state appropriations than those without, but finishing in the top twenty at the end of the year and participating in bowl games had no effect. Donations by athletes and those to public institutions appear to rise with football success, but by small amounts. Smith (2009) found that the impact of football success on applications and other outcomes was dwarfed by other factors.