Literature Review #4

Lawrence Kahn

Citation: 

 Kahn, Lawrence M. "Markets: Cartel Behavior And Amateurism In College Sports." Journal Of Economic Perspectives 21.1 (2007): 209-226. Business Source Premier. Web. 10 Mar. 2015.

Summary:

This article discusses the idea that the NCAA operates like a cartel. According to Kahn, the many restrictions that the NCAA imposes on players and schools act to repress these people and fix costs, as a cartel does. They have enacted restrictions which include player compensation and recruiting expenses and have defeated any potential rival groups. Restricting player compensation is the main way the NCAA can restrict competition and control players. The article continues to say that the NCAA attempts to put limits output by limiting the amount of games that can be televised before the schools sued them to get the rights to televised games.

About the Author:

Lawrence M. Kahn is the Braunstein Family Professor and Professor of Economics. He was Chair of the Labor Economics Department at Cornell during 1998-99 and 2000-2005, is Editor of the Industrial & Labor Relations Review, is on the editorial board of the Journal of Sports Economics, served as Associate Editor of the Industrial & Labor Relations Review and Specialized Co-Editor (for Sports Economics) of Economic Inquiry and was on the Board of Editors of Industrial Relations. As an economics professor, he can give unique insight into the practices of the NCAA and help determine if the practices they employ are fair from an economic standpoint. 

Key Terms:

Cartel: an association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.

Regulation: a rule or directive made and maintained by an authority.

Quotes:

"According to proponents of the cartel theory of the NCAA, the organization has enforced collusive restrictions on payments for factors of production, including player compensation, recruiting expenses, and assistant coaches’ salaries; it has restricted output; and it has defeated potential rival groups." Page 211

"Today, restrictions on payments to players are probably the most important way in which the NCAA acts to restrict competition. But historically, the NCAA has sought other ways to reduce input payments and to restrict output." Page 211

"...from a redistributionist point of view, for at least some college athletes who make it to the National Football League (NFL) or NBA and likely generate a disproportionate share of the revenues in college sports, lifetime permanent income may be high. Thus, the redistribution caused by monopsony over these athletes may in fact be progressive. On the other hand, college athletes rarely make it to the professional ranks: only 1.3 percent of NCAA football players and 1.7 percent of NCAA basketball players make it to the pros..."

Value:

This article is valuable because it gives economic insight into the issues which players face when playing for the NCAA. It describes the many ways which players are exploited and controlled by the NCAA be it through controlling wages or using sanctions and penalties to restrict the players from using their likeness to create revenue. This article gives me an economic prospective where before only legal perspectives were available.

Research Blog #5: Bibliography

Branch, Taylor. "The Shame of College Sports." The Atlantic. Atlantic Media Company, 07 Sept. 2011. Web. 02 Mar. 2015.

Cronk, E. “UNLAWFUL ENCROACHMENT: WHY THE NCAA MUST COMPENSATE STUDENT-ATHLETES FOR THE USE OF THEIR NAMES, IMAGES, AND LIKENESSES.” University of La Verne Law Review. 34, 2, 135, June 2013. ISSN: 1944382X.

Hruby, Patrick. "The End of Amateurism Is Not the End of Competitive College Sports." The Atlantic. Atlantic Media Company, 28 Aug. 2014. Web. 03 Mar. 2015.

Kahn, Lawrence M. "Markets: Cartel Behavior And Amateurism In College Sports." Journal Of Economic Perspectives 21.1 (2007): 209-226. Business Source Premier. Web. 10 Mar. 2015.

Miller, Anthony. "NCAA Division I Athletics: Amateurism and Exploitation." The Sport Journal. The Sport Journal, 3 Jan. 2012. Web. 03 Mar. 2015.

Murphy, Steve, and Jonathan Pace. "A Plan For Compensating Student-Athletes." Brigham Young University Education & Law Journal 1 (1994): 167. Academic Search Premier. Web. 24 Feb. 2015.

Research Blog #4: Research Proposal

Brian McAlister
Research in Disciplines: College!
Professor Goeller
March 3, 2015
Working Title: The Exploitation of the Collegiate Athlete

Topic
This paper will explore the legality of the NCAA and the various ways it and universities use the terms “student-athlete” and “amateur” to exploit athletes for financial gain. The paper will attempt to link the NCAA and universities to the idea that college sports has become a money making business and that the athletes rights are being encroached upon for profit. It will focus on Division 1 sports, in particular large football and basketball programs as they generate the most money.

Research Question
Has collegiate athletics become a for profit enterprise which unlawfully exploits collegiate athletes for economic gains?

Theoretical Frame
        The legality of the NCAA has been questioned many times and the practices that it uses to keep players from being compensated can be considered illegal. According to “UNLAWFUL ENCROACHMENT: WHY THE NCAA MUST COMPENSATE STUDENT-ATHLETES FOR THE USE OF THEIR NAMES, IMAGES, AND LIKENESSES” by Erin Cronk, the right of publicity, which states the right of privacy includes “appropriation, for the defendant's advantage, of the plaintiffs name or likeness”, is being broken by the NCAA when they appropriate names and likeness for profit. It is argued that the NCAA forces the athlete to sign over this right as they must if they want to play, which is exploitation. The NCAA principle of amateurism is used keep colligate athletes from profiting off of their image and likeness in order to preserve some kind of fairness. There are many instances where the athletes’ likenesses and names are appropriated for huge profits such as selling jerseys with the numbers of star players. This principle raises a question, is this provision still fair in a world where so many profit from the hard work of unpaid collegiate athletes? College athletics makes so much money and it seems rather unfair that collegiate athletes do not get fair compensation for the risk and effort they put in.
        Another issue is that the NCAA fits the description of a cartel, which is illegal. According to Lawrence Kahn in his work “Markets: Cartel Behavior And Amateurism In College Sports”, the NCAA “…has enforced collusive restrictions on payments for factors of production, including player compensation, recruiting expenses, and assistant coaches’ salaries; it has restricted output; and it has defeated potential rival groups” and he states that “…restrictions on payments to players are probably the most important way in which the NCAA acts to restrict competition.” When the NCAA is allowed to operate in this manner, students are being exploited as top athletes are made to accept compensation in the form of scholarships which is well below the amount of money they generate for the NCAA and schools. By controlling prices and putting harsh restrictions and penalties in place for violating for breaking these rules, the NCAA generates massive profits which the athletes never see. Athletes get exploited when there is a restriction on the amount of compensation an athlete can receive.

Case
O’Bannon v. NCAA and EA Sports is a case which deals with the appropriation of collegiate athletes’ likenesses in both video games and the lack of licensing for media broadcasts. This is important because the NCAA and outside companies are profiting off the likeness of collegiate athletes giving absolutely no compensation to players. Collegiate athletes in this case are being exploited and there is nothing they can do as these athletes are forced to sign over their likeness. This, according to Erin Cronk, is a violation of the right of publicity.
        There are a few lawsuits that have come about due to the practices the NCAA uses to control collegiate sports that are consistent with that of a cartel. The first is a lawsuit fairly recently in March of 2014 which seeks to change the rule that universities cannot negotiate or give some form of compensation players and that price-fixation is a restraint of trade. Another case is NCAA v. Board of Regents of the University of Oklahoma which sought to take control of television rights from the NCAA and give them to universities. This case was successful in taking power away from the NCAA and also stopped revenue sharing from these broadcasts (Branch). The issue that was challenged in this case, NCAA control of televised games, has many similarities to other issues that students currently face. The ruling found that restricting television appearances of schools was a restraint of trade and thus universities were given control. The universities faced restraint of trade from the price fixing which the defendants of the law suit mentioned in the previous case argue they are facing as well.

Literature Review #3

Citation:

Miller, Anthony. "NCAA Division I Athletics: Amateurism and Exploitation." The Sport Journal. The Sport Journal, 3 Jan. 2012. Web. 09 Mar. 2015.

Summary:

This article discusses how the NCAA might be exploiting the athletes, in particular those in division one athletics. It describes what amateurism is and how in modern sports it is no longer ethical to not compensate the players. The article describes the NCAA as a cartel as it does things such as regulate the means of acquiring athletes and puts a fixed value on them. It describes how a player who can not afford college becomes a victim of exploitation as they must play to stay in school. The article shows how the NCAA and universities exploit athletes for gain. 

About the author:

Anthony Miller is a doctoral candidate at the United States Sports Academy as of 2011. Going to a university which specializes in sports gives the author good insight into the NCAA and any exploitation that may be going on.

Key Terms:

Athletic Scholarship: An athletic scholarship is a form of scholarship to attend a college or university or a private high school awarded to an individual based predominantly on his or her ability to play in a sport.

Exploitation: the action or fact of treating someone unfairly in order to benefit from their work.

Quotes:

"The best schools are not available to everyone. Some athletes are only recruited by schools with poor academic records. Although players are not forced to attend one of those schools, some are financially unable to attend college without the help of an athletic scholarship. A student-athlete under such circumstances would be considered a victim of exploitation."

"Researchers and economists who have studied intercollegiate athletics have described today’s NCAA as a cartel. A cartel is defined as a joint group of members who create policies in order to promote the mutual interests of the members."

"The current NCAA Division I intercollegiate sports program has evolved into a multi-billion dollar industry where many of the schools’ annual revenues reach above $260 million."

"But a teenager with no prior experience who receives the equivalent of $120,000 a year is uncommon in other professions. When asked about fair compensation for college athletes, Butler University men's Basketball player Matt Howard replied, 'Forty thousand dollars plus a year to play, that's pretty good salary for an 18-year old who has no college education.'"

Value:

There is a lot of value in this article as it describes different ways that athletes can be exploited. It also gives the reasons for which the NCAA can be considered a cartel which backs the idea that the athletes are treated unfairly. It also does a good job giving the counter-argument that the money generated from high profit sports like basketball and football are used to support sports which make very little money such as lacrosse and swimming. It also points out that athletes receive a lot of different services which value over $100,000.  

Literature Review #2

Taylor Branch

Citation:

Branch, Taylor. "The Shame of College Sports." The Atlantic. Atlantic Media Company, 07 Sept. 2011. Web. 02 Mar. 2015.

    

Summary:

The article details  the many ways through which the NCAA uses the "student-athlete" label to protect itself, deny payment to athletes and, above all else, make lots of money. The article shows how they NCAA treats athletes differently, such as Cam Newton being reinstated to Auburn even though he had broken payment rules. It also shows how the NCAA denies players with injuries workers compensation saying they are not paid and therefore are not eligible. The article shows how the NCAA does what ever is best to make money at the expense of the "student-athletes" that it claims to protect.

About the author:

Branch is a well known historian and writer who has written many books about presidents and historical figures such as Martin Luther King, Jr. He is an investigative writer who has written about civil rights and can provide insight into the argument and help decide the fairness of the way the NCAA treats student-athletes.

Key Terms:

NCAA v. Board of Regents of the University of Oklahoma: A decision that stripped the NCAA of its control over televised games and the revenue they generate, giving the power to the individual schools. This stopped revenue sharing as well.

NCAA v. Tarkanian:  A decision which exempted the NCAA from any due-process obligations because it was not a government organization.

Quotes:

"Last year, CBS Sports and Turner Broadcasting paid $771 million to the NCAA for television rights to the 2011 men’s basketball tournament alone. That’s three-quarters of a billion dollars built on the backs of amateurs—on unpaid labor. The whole edifice depends on the players’ willingness to perform what is effectively volunteer work." Page 4

"Cognizant of its precarious financial base, the NCAA has in recent years begun to pursue new sources of revenue. Taking its cue from member schools such as Ohio State (which in 2009 bundled all its promotional rights—souvenirs, stadium ads, shoe deals—and outsourced them to the international sports marketer IMG College for a guaranteed $11 million a year), the NCAA began to exploit its vault of college sports on film. For $29.99 apiece, NCAA On Demand offers DVDs of more than 200 memorable contests in men’s ice hockey alone. Video-game technology also allows nostalgic fans to relive and even participate in classic moments of NCAA Basketball. NCAA Football, licensed by the NCAA through IMG College to Electronic Arts, one of the world’s largest video-game manufacturers, reportedly sold 2.5 million copies in 2008." Page 4

"The game, perhaps the most exciting of the season, was unbearably tense, with Auburn coming from way behind to win 28–27, all but assuring that it would go on to play for the national championship. Days later, Auburn suspended Newton after the NCAA found that a rules violation had occurred: his father was alleged to have marketed his son in a pay-for-play scheme; a day after that, the NCAA reinstated Newton’s eligibility because investigators had not found evidence that Newton or Auburn officials had known of his father’s actions. This left Newton conveniently eligible for the Southeastern Conference championship game and for the postseason BCS championship bowl. For the NCAA, prudence meant honoring public demand.

'Our championships,” NCAA President Mark Emmert has declared, “are one of the primary tools we have to enhance the student-athlete experience.'" Page 4

Value:

This article is incredibly valuable as it gives in depth descriptions of many of the scandals that have occurred in college sports and shows how the NCAA handled them. It gives many examples of the NCAA making rulings in order to keep profits or avoid paying for various expenses. It also reveals that Universities as well as the NCAA have moved to a money making approach and that the idea of calling the athletes "student-athletes" only serves to keep them unpaid and make more money. Universities, the NCAA, and various corporations have made lots of money off of unpaid labor.  

Literature Review #1

Erin Cronk

Citation:

CRONK, E. UNLAWFUL ENCROACHMENT: WHY THE NCAA MUST COMPENSATE STUDENT-ATHLETES FOR THE USE OF THEIR NAMES, IMAGES, AND LIKENESSES. University of La Verne Law Review. 34, 2, 135, June 2013. ISSN: 1944382X.

Summary:

This article covers the various ways through which the NCAA exploits athletes' likeness in order to turn a larger profit. This exploitation ranges from the sale of certain jersey numbers, such as A.J. McCarron's #10 jersey being displayed and sold for profit, to schools signing huge television deals for millions of dollars and using the players on the team as free advertising. The article also covers how the students right of publicity is being violated by the practices that universities and the NCAA use.

About the author:

Erin Cronk is a Junior Assistant at CGC Law and graduated from the University of La Verne in 2013. As a law graduate, she has good insight in the legality of the practices the NCAA uses when they use player likeness for promotions and profit.

Key Terms:

NCAA principle of amateurism: student-athletes shall be amateurs in an intercollegiate sport, and their participation should be motivated primarily by education and by the physical, mental and social benefits to be derived. Student participation in intercollegiate athletics is an avocation, and student-athletes should be protected from exploitation by professional commercial enterprises. 

Student-athlete: is a participant in an organized competitive sport sponsored by the educational institution in which he or she is enrolled. 

Quotes:

"The NCAA appropriates the student-athletes' identities in the merchandise market by selling jerseys with numbers that are affixed to the identity of the student athlete who wears that number. While the jerseys do not have the student-athletes' names sewn on to the back of them, the players' likenesses are still being appropriated." Page 145

"Using economic principles, Professor Roger Noll of Stanford, quantified the value of the use of student-athletes' identities in television broadcasts. His research found SEC football players would be entitled to $61.5 million dollars and PAC-10 basketball players would be entitled to $30.4 million dollars. Noll's calculations were 'based on a 50-50 split for telecasts and a one-third split for video games, based on recognized economic principles, examples from professional sports, and examples from music artists' licensing.'" Page 147

 "In addition to high-profile television deals, the NCAA uses the names, images, and likenesses of current student-athletes in many other products, including DVDs, video games, and online streaming content. The NCAA licenses DVDs that document anything from a team's football season, era, or playoff series and sell for approximately $29.99. The NCAA website also provides a variety of downloadable videos featuring the accolades of student-athletes including highlights and championship celebrations." Page 148

Value:

This document proved to be incredibly valuable as it has great explanations as to how athletes' likenesses are being exploited through various mediums be it film, television or video game. The exploitation of athletes is a major focus of the paper and this provides great insight into just what the NCAA and universities use player likeness for.