Big Ten to Start Paying More for Scholarships?

Not much of interest shuck out of the Big Ten meetings this week, besides from a possible expansion to nine games in 2017 that everyone already anticipated. But there was this little tidbit this afternoon:

An athletic scholarship pays for tuition, fees, room and board and books. But it doesn't cover such items as transportation, clothing and other living expenses -- the so-called full cost of attendance. Studies have suggested that there's a gap of about $3,000 per player between the scholarship allotment and the cost of attendance.  

There have been calls to close that gap. In 2003, former NCAA president Myles Brand publicly favored a proposal to use men's basketball tournament funds to give athletes more pay. Current NCAA boss Mark Emmert has come out in support of the same idea and brought the issue up at the NCAA's April board meeting. 

Big Ten commissioner Jim Delany said his league talked about such a model this week in Chicago.  

"Forty years ago, you had a scholarship plus $15 a month laundry money," Delany said. "Today, you have the same scholarship, but not with the $15 laundry money.  

"How do we get back more toward the collegiate model and a regulatory system that is based more on student-athlete welfare than it is on a level playing field, where everything is about a cost issue and whether or not everybody can afford to do everything everybody else can do?"

Two thoughts on this: first, this shouldn't hurt any Big Ten athletic departments all that badly. Assuming there are around 300 scholarship athletes total in each department, an extra $3000 per student comes out to less than a million dollars per sports department. With the unexpected success of the Big Ten Network and the recession-impervious sports contracts being doled out by television networks, $900,000 is peanuts.


Second, this is a warning to every mid-major football program in the FBS. You want a free market. A real free market? You want full competition? These teams can't break even with support from their universities and sometimes direct payments from the state fisc. An extra million dollars to athletes would be impossible at Eastern Michigan or Ball State; even Boise State will have a tough time of it. And that extra $3,000 per year could mean the difference between Indiana or Minnesota and, say, Central Michigan to the marginal recruits that turn down the Big Ten to become MAC superstars.

Mark Emmert Makes a Lot of Money and I Don't Care

Other, smarter people (Big Ten grads, no less) have waxed more eloquently on the problems with the NCAA’s eccentric definition of amateurism. The current system—scholarships are OK, training tables are fine, outside money not so much—is more an historical curiosity than a principled philosophy. I have my problems with the current system; I also think it works in several ways and that wholesale revolution is not necessary. Others disagree. These spats are what make life worth living, along with guitars tuned good and firm-feeling women.

What aggravates me, however, is the looseness in definitions (this is an ongoing jihad of mine, as readers will learn). So when PBS rallies against the inherent contradictions of a non-profit organization paying its officers too much money because “nonprofit” means wholesome, I look a wee bit more like Cal Ripken, Jr.

Nonprofit is not non-revenue. Every competently run organization seeks to increase its revenue--even non-profit organizations. Of course they do; there would be no reason to create the organization if it didn’t take in more money than it spent. A cancer research charity spends some money, hopes to solicit more, and we wish them the best, even though they are a non-profit getting “profits.” It is even OK for the charity to sell stuff, rather than just passing around a collection plate.

There are two disadvantages, and one huge advantage, to being a nonprofit organization. First, all the money raised has to be plowed into the purpose of your organization. Shareholders do not earn dividends (also, there are no shareholders). Second, state and federal governments impose many registration and audit requirements. In return for these restrictions, non-profit organizations are not taxed.

Very simple, no? Nonprofit does not mean that employees cannot be paid, or that officers’ salaries are limited. To be sure, non-profits are often rated on how much money goes towards the stated purpose; nobody wants a charity where three-quarters of the money goes towards the salaries of its officers. But when a museum director makes a cool $2.5 million, the status of the organization as a nonprofit is not put in danger. Of course, the donors might not be pleased, but that is a separate problem. And the donors might not be all that unhappy. If a nonprofit is worth doing, it’s worth doing well, with sound management. Sound management often costs money (though, of course, paying lots of money is not a guarantee of sound management).

With that out of the way: yes, NCAA President Mark Emmert probably makes a lot of money. Emmert may not deserve that much money. But if the NCAA’s purpose is worth doing, it’s worth paying a very successful manager a lot of money to do it well, if that is what it takes. That the purpose of the NCAA is amateurism makes that much money does not render the salary ironic. Good nonprofits often pay their officers well. Whether the NCAA is a good nonprofit is a different argument, but Emmert's salary is not a data point that points in either direction.