With the decision to allow college players to form labor unions, the debate continues about whether or not college athletes should be paid a salary for playing Football, Basketball, Soccer, or any other sport for their respective school, or if they should be content with the honor of representing their school playing the game they love. Some believe that as the players are in fact taking on a work ethic, like the student who works in the library or computer lab. Others believe that sports are inherently recreational, and that aside from athletic scholarships, financial rewards are inappropriate. One thing is for sure; that if it comes to where universities pay their college athletes a salary, the price may well be heavier than expected, and those least able to pay will carry the burden.
Dr. John Acquaviva warns that along with along with the initial and obvious cost of a student athlete’s salary, the school would have the extra fee of maintaining financial oversight by the National Collegiate Athletic Association (NCAA). He goes on to state that only a fraction of Division I football and men’s basketball programs return a profit. The rest of Division I football and basketball programs as well as sports such as softball, hockey, women’s basketball and almost all Division II sports not only fail to offer positive return, but in fact deplete their athletic budgets.
Writing for the Hartford Courant, Thomas Tompko stated that donations toward college athletic scholarships may no longer be tax-deductible to the donor. If the players unionize and become employees, a donation is no longer going to a not-for-profit entity. The Stanford Review, furthermore suggested that colleges in the United States might end up shelling out over $50 billion in taxes if the schools lose their not-for-profit status via paying athletes salaries.
To eliminate any confusion, though college athletes currently do not receive salaries, they may come up with money to pay taxes on the monetary assistance they receive from their school; however, his or her assistance may be considered tax-free if the student is actively pursuing a specified degree which the school is authorized to offer. Nonetheless the player will likely still owe taxes which would be based on the price of room and board.
The Wall Street Journal reported on Thursday that the regional director of the National Labor Relations Board ruled that scholarship football players for Northwestern Wildcats are school employees and have the right to unionize. An important issue relating to this case is that Northwestern University is a private school, and public schools’ athletic programs do not have unions at this time. The board declared that scholarship athletes are employees first, and students second; the ruling is in direct contrast to the university’s claim. Peter Ohr, who issued the ruling, pointed out that the football players spend more time focusing on their sport than on their respective studies. The ability to unionize and be considered employees may come at a hefty price to the student athletes. For example, if their entire scholarship was deemed taxable, the athletes may have to pay roughly 25 percent taxes on their scholarship. One anonymous athletic director believed that the value the players received from the training table, travel and even coaching could be taxed. The NCAA voiced agreement with the university.
Colleges and universities have long enjoyed a status as non-profit entities, and as such reaped the corresponding benefit of a lower price tag when taxes came due. If schools end up paying their college athletes a salary as a result of unionization, the new bill may become one with a balance too high for anyone.
Commentary by Ian Erickson