Well, not all of them. Cam Newton probably wasn’t, at least officially. Jared Sullinger probably isn’t. When you give all scholarship athletes the same compensation, at least a few will fall on either side of the line. Your best coworkers (maybe even you!) are probably underpaid; your worst coworkers are probably overpaid. This is not unique to college athletes, though the problem is perhaps more severe because everyone gets paid the same amount; imagine how underpaid you would be if you made the same amount as everyone else at your office.
Just so that we are all clear: the question is not “should college athletes be paid?” They already are. Even if we strip away all the other ancillary benefits of being an athlete at a major school (job training; attractive girls (probably NSFW); social status; training tables), scholarships are payment from both the perspective of the school and the player. Providing a player a $25,000 scholarship is exactly the same as paying him $25,000 and requiring him to attend the university. This isn’t controversial (nor, I don’t think, is it controversial that players should have to attend the university for which they play). What is a little controversial—but only a little—is whether a scholarship is a true cost to the university, or whether the school can just “write off” the costs. Universities, like just about every other non-profit organization, want to make money. If colleges run at full capacity—which they do, because it doesn’t make sense to leave money on the table for no reason—a spot for an athlete means one less spot for a paying student. If the university would be getting $25,000 from that student, and they are getting $0 from the athlete, that is a $25,000 cost.
So the question is not whether athletes should be paid (unless you’re Ralph Nader and you think the answer should be "no," full stop), but how much should they be paid. Too often, the issue is framed as a percentage of the revenue: the NCAA gets $700+ million from the men’s basketball tournament, and athletes get only a slice of that. We watch basketball to watch the athletes—the argument goes—so why don’t the athletes get most of the money?
There couldn’t be a tournament without players, but there could still be one without these players. In fact, that alternate-universe tournament would probably be wildly successful, even if the quality went down (the value of the NCAA tournament wasn’t hurt much, if at all, by high school players skipping to the NCAA, and it doesn’t seem to be hurt much by players skipping up to three seasons). This is unique to college sports. If the quality of the NFL dropped significantly because, say, its best players left for the USFL or Arena League, the value of the NFL would fall precipitously. Fan loyalty to college teams seems to be different. College football and college basketball are not the highest level of the sport available. In fact, college sports are often several grades below the highest professional version; most NBA developmental league teams would be favored over most college basketball teams, and most USFL teams would be favored over most college football teams. Yet almost no one cares about the USFL or NBA D-league, and 100,000 people freeze their butts off in Ann Arbor, Columbus, and State College seven Saturdays a year. The equity is in the team, not the players.
Colleges would still need players, of course, but there doesn’t seem to be any shortage of those. Most major college football teams have dozens of players willing to pay their own way to work their butts off and stand around on the sideline. Those walk-ons are still much better athletes than you or I; watching a game consisting entirely of walk-on players would be less entertaining than a current college game, but it would be a lot better than watching the local rec league game. DIII players, who understand they have almost no hope of ever playing professional football and are not well compensated through facilities or training tables, are not given scholarships. Club sport members pay thousands of dollars in addition to tuition to play their sport. It’s safe to say that some current scholarship players—no one knows how many, but I suspect a very large percentage—would be willing to play without scholarships, especially if need-based financial aid were available.
Still, this only tells us that the sport would still exist, and that it would still be popular; it does not tell us whether players are underpaid. In a perfectly free market for college football athletes, colleges would bid against one another for players, both through direct payments (wages) and ancillary benefits (facilities, nice campus, good weather, winning games, etc.). Because wages are limited to the amount the school requires for tuition, teams compete by pouring money into facilities and coaches to lure players. Presumably, many players would prefer to just have the cash, and in a free market, more money would be paid directly to the players than currently. This is, I think, what people mean when they say players are underpaid.
This assumes, however, that once money is freed for wages, everyone’s wages will go up. But scholarships are a floor as much as they are a ceiling. Jared Sullinger was one of the top recruits in the country, and just about every program would have been happy to reward him well. As in most other industries, the compensation of top college athletes would likely dwarf the compensation of everyone else (this happens in professional sports leagues as well, though minimum salaries prevent the lowest wages from falling below a certain level). I favor allowing players to accept endorsement money and use their own likeness, but even this is a solution likely to benefit the top athletes disproportionately.
I don’t think that most people who want college athletes to be paid (more) want a perfectly free market; what they want is scholarships, plus some extra spending money beyond the per diem players are getting currently, plus opportunities for outside compensation. These may be good ideas, but often the assumption behind them is that this is what athletes would likely be receiving anyway, if not for the NCAA. If I were the average football player at the average DI program, I would be awfully hesitant to test that assumption.
Bonus linkage! John Gasaway asks for an end to the self-flagellation here. The Big Ten Geeks point out that most of the proffered solutions to the problem are illegal (there's also the pesky legal issue that only male athletes would be paid, since women's teams are already a huge financial drain on athletic departments.) Antitrust law is not the friend of most of the crusaders. I still think the BTGs assume unnecessarily that players are undercompensated; I am obviously not so sure. Still, I think all our solutions are mostly the same, though I also think that some of the money that goes to coaches would end up going to players in a freer system. Teams pour money into coaching salaries because they need to spend it on something. If they could compete on players’ wages, coaching salaries would go down (or at least would not rise so quickly). No illegal collusion would be necessary. I just think that most of that money will end up in the hands of a few players.