People that want to preserve amateur athletics often say that student-athletes are compensated, contrary to appearances, because just about everyone on a top tier sports team is getting an education on an athletic scholarship (even the kids at Harvard, these days). If they get a free ride, isn't that enough? Not quite.
On the Freakonomics blog, Dave Berri writes that he's been working on a valuation for a basketball win for a given program. He isn't there yet, but $100,000 strikes him as a conservative estimate. (It seems safe to assume that there are diminishing returns, where a lone win isn't significantly more valuable than zero wins, but we aren't talking about teams at risk of winning zero games.) If that's at least close, and we break down teams into wins added by individuals as Berri did in a handy chart, the average Indiana University Hoosier was worth $186,537.75 to the school this year. An IU scholarship is valued at $30,000. At 7.37 wins added, Victor Oladipo was worth $737,129 by himself. That doesn't include the postseason.
Berri has an idea:
What I would propose is stop with the rule writing. Simply allow each team to compensate its players in whatever fashion necessary to get the athlete to come to campus. I would suspect that for most athletes, the current system would continue. In other words, most athletes (across most sports) would simply receive a scholarship to play sports and attend school.
For a few players, though, the situation would be different. A player like Oladipo generates far more revenue for a college program than his scholarship is worth. Consequently, in a free market some school would be willing to pay more for Oladipo’s services.
This system would be something of a shock to player's like IU's freshman center Peter Jurkin, who, by wins added, played himself $2,879 into debt this season. (Not really, he'd still get a scholarship, he's 7 feet tall). But it's tough to imagine why it wouldn't work, were it not for the NCAA's vested interest in holding down salaries.
It wouldn't be too tough for these schools to find the money; Berri notes that the defense that they aren't profitable is misleading when their not-for-profit status incentivizes spending any money that comes in, and he points to the (hugely inflated) salaries of college coaches as an example of where that money could come from. For those worried about competitive balance, it would be tough to tip that balance any further, especially in recruiting, where a few schools reign supreme. It's also not obvious that allowing players to be paid would change that situation for the worse; players choose Kentucky because John Callipari is an expert at ensuring pay days when the draft rolls around, and as Berri writes, one highly-rated recruit often follows another, because exposure is the best way to guarantee some sort of future payoff.
So it all seems logical, and therefore definitely won't happen with the NCAA involved. There would have to be a lot more of—and more militant versions—this, and in 2013, that still qualifies as outspokenly subversive.
How About A Free Market For College Basketball? [Dave Berri]