Deep Contractions
at the NCAA
By Andrew Zimbalist
Andrew Zimbalist is Robert A. Woods Professor of Economics at Smith and in 1998 was named Village Voice Sports Journalist of the Year. This essay is adapted from the introduction to his latest book, Unpaid Professionals: Commercialism and Conflict in Big-Time College Sports, recently published by Princeton University Press and chosen as one of the Top 10 Sports Books of 1999 by Booklist, the magazine of the American Library Association.

What is the basic purpose of the National Collegiate Athletic Association? The first page of its 1997-98 manual claims that the NCAA exists "to maintain intercollegiate athletics as an integral part of the educational program and the athlete as an integral part of the student body and, by doing so, retain a clear line of demarcation between intercollegiate athletics and professional sports."

The facts strongly suggest otherwise.

In December 1996, Notre Dame was playing its final regular-season football game against the University of Southern California. The Notre Dame placekicker
missed an extra point at the end of the fourth quarter. The Fighting Irish went on to lose, 27-21, in overtime-thereby forfeiting a shot at an Alliance Bowl game that would have garnered Notre Dame a cool $8 million. The placekicker blew an $8 million extra point!

Notre Dame has a $45 million contract with NBC to televise its regular-season football games. The major conferences have a $700 million contract with ABC to televise the bowl championship series. The NCAA has a $1.725 billion contract with CBS to broadcast its annual men's basketball tournament.

Like the professional leagues, the NCAA and its leading colleges promote their own lines of licensed clothing. Like the National Basketball Association and the National Football League, the NCAA has its own traveling tent show, NCAA Hoop City. The association has its own marketing division. Its corporate sponsorships increased roughly sevenfold during the '90s, with guaranteed income of $75 million between 1997 and 2002. It has its own real estate subsidiary and even its own Learjet. In 1997 the city of Indianapolis offered to build the NCAA a new headquarters and to provide an estimated $50 million in subsidies-whereupon the association vacated Kansas City, leaving behind 300 employees and 45 years of its history.

The NCAA's total budget, which surpassed $270 million in 1997-98, has grown at an annual rate of 15.0 percent since 1982. The association's executive director, Cedric Dempsey, has done even better: as part of a new five-year deal, in fiscal 1997 his salary and benefits package grew 30.2 percent, to $647,000. (Dempsey had replaced Dick Schultz in 1993, when the latter ran into ethical problems. As punishment, the association gave Schultz a golden parachute worth at least $700,000.)

Dempsey also gets treated well when he attends the Final Four of the annual basketball tournament. The Kansas City Star reported that "the manual for cities holding Final Fours requires a series of gifts to be delivered every night to the hotel rooms of NCAA officials. These mementos cost Indianapolis an estimated $25,000 [in March 1997]. At a minimum, gifts for each official included a Samsonite suit bag, a Final Four ticket embedded in Lucite, a Limoges porcelain basketball and Steuben glass." And to maximize revenue at the Final Four, the NCAA has spurned basketball's traditional smaller venues for cavernous arenas such as the New Orleans Superdome, the San Antonio Alamodome, the St. Louis Trans World Dome, the Indianapolis RCA Dome and the Georgia Dome, all of which seat more than 40,000.

Many NCAA schools find the big bucks dangling before their eyes too alluring to be sacrificed to respect for the rules. Schools cheat-by arranging to help their prospective athletes pass standardized tests, by providing illegal payments to their recruits, by setting up special rinky-dink curricula so their athletes can stay qualified. And when one school cheats, others feel compelled to follow. The NCAA responds by passing new rules to curtail the cheating. Sometimes they're enforced, sometimes not, but rarely do the penalties draw blood. The association seems to think that the solution to all this lies in having more rules: its manual grew from 161 6x8-inch pages in 1970-71 to 579 8x11-inch pages in 1996-97. In 1998-99 it ballooned to three volumes (in the larger size, of course) with a total of 1,268 pages.

What is "the clear line of demarcation between intercollegiate athletics and professional sports"? It certainly isn't the presence or absence of commercialism and corporate interests. Rather, two differences stand out. First, unlike their handsomely remunerated coaches and athletic directors (ADs), college athletes don't get paid. Second, the NCAA and its member schools, construed as amateur organizations promoting an educational mission, do not pay taxes on their millions from TV deals, sponsorships, licensing or Final Four tickets.

The tension between professional and amateur in college sports creates myriad contradictions. And as the NCAA can well attest, in today's America contradictions mean litigation.

Consider the legal toll on the NCAA in 1997-98. A long-standing dispute with basketball coach Jerry Tarkanian over due process was settled for a hefty $2.5 million in the coach's favor. The association was told by the 3rd Circuit Court of Appeals in Philadelphia that since NCAA schools receive federal funds, the association itself is subject to Title IX (federal gender-equity rules); among other things, this ruling called into question the legality of NCAA regulations about scholarships for athletes. And, potentially most significant, the association was hit with a $67 million court judgment over one of its rules that restricts the earnings of certain coaches. This ruling, if it stands, might be used to challenge a panoply of NCAA restrictions on the operation of markets, including prohibitions on paying athletes, restrictions on how much athletes can earn outside their sport, and limitations on the number of games played or the number of players on a team. The ruling might ultimately challenge the association's whole modus operandi.

In the end, college athletics leads a schizophrenic existence, encompassing both amateur and professional elements. The courts, the IRS and sometimes the universities themselves cannot seem to decide whether to treat intercollegiate athletics as part of the educational process or as a business. The NCAA claims that it manages college sports in a way that promotes both the goals of higher education and the financial condition of the university. Critics say it does neither.

The NCAA wants it both ways. When confronted by the challenges of Title IX and gender equity, the association and its member schools want to be treated as businesses. ADs argue that it is justifiable to put more resources into men's than women's sports, because men's sports generate more revenue. But when the IRS knocks on its door, the NCAA and its member schools want their special tax exemptions as part of the nonprofit educational establishment, and claim special amateur status to avoid paying their athletes. We need to determine where these contradictions came from, how they evolved and what can be done about them.


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