A union for college football players?

Here's the story from ESPN a little while ago:

For the first time in the history of college sports, athletes are asking to be represented by a labor union, taking formal steps on Tuesday to begin the process of being recognized as employees.

More from ESPN.com

Lester Munson writes that the Northwestern football players' attempt at unionization is likely to fail, but the impact could still be far-reaching. Story

Ramogi Huma, president of the National College Players Association, filed a petition in Chicago on behalf of football players at Northwestern University, submitting the form at the regional office of the National Labor Relations Board.

Backed by the United Steelworkers union, Huma also filed union cards signed by an undisclosed number of Northwestern players with the NLRB -- the federal statutory body that recognizes groups that seek collective bargaining rights.
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And here's the CBS coverage: Road ahead for college football players union isn't an easy one

The obstacles members of the Northwestern University Wildcats football team face on the road to forming a union are formidable.

First,  there are a myriad of legal questions that need to be answered, such as is there an employer/employee relationship that exists between the players and the Evanston, Ill. school that meets the criteria set by the National Labor Relations Board (NLRB).

Northwestern, not surprisingly, argues that such a relationship doesn't exist. Whether the players can make such a claim against the NCAA, which seems to be the focus of their wrath and also is opposed to their efforts, also is unclear. The players, though, do have the backing of the NFL Players Association, the union that represents their counterparts in the pros.

"Most of the grievances cited by the players concern the NCAA as a monopolistic cartel that wields unbalanced and unreasonable labor market power against the players in terms of compensation and scholarship limitations among other issues," writes Vanderbilt University Economist John Vrooman, a former college football player who studies the economics of sports, in an email. "The issue here is that the NCAA is clearly a cartel but it is not necessarily the employer."

The other obstacle facing the players affiliated with the National College Football Players Association is a practical one. Since members of the team graduate, creating a cohesive bargaining unit will be difficult if have to frequently recruit new members. That's one of the reasons why efforts to unionize teaching assistants on college campuses have faltered.
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Here's a report from the first days of hearings:

March 3, 2014

Are College Athletes Employees? Former Labor-Board Chairman Says Yes

Here's an earlier, related post:

College football is big business (who knew?)

College football and the BCS as a political football

The WSJ reports today: U.S. May Examine College Footbal Bowl System
"Sen. Orrin Hatch (R.-Utah) said he received a letter from the Justice Department, in which it "outlined the inequities" of the BCS system and said that it is considering whether to investigate the BCS under the antitrust laws. The letter also said that the administration is exploring other options to address college football's postseason, including encouraging the NCAA to take control and asking the Federal Trade Commission to examine the BCS's legality under consumer-proteciton laws.
Shortly after he was elected in November 2008, Barack Obama said he would "throw my weight around a little bit" regarding college football's lack of playoff system. Currently, the BCS stages a national title game between the two teams that finish atop a compilation of polls, while other arguably deserving teams often get excluded. Mr. Hatch, whose home-state Utah Utes were left out following the 2008 season despite a perfect record, has been advocating for changes, too, writing a letter to the president in October asking for an antitrust investigation."

The article goes on to quote the BCS director as saying we've seen this before: ""There is much less to this letter than meets the eye," Mr. Hancock said. "The White House knows that with all the serious issues facing the country, the last thing they should do is increase the deficit by spending money to investigate how the college football playoffs are played. With all due respect to Sen. Hatch, he is overstating the importance of the letter he received from the Office of Legislative Affairs." "

Here are my previous posts on the BCS and the serious business of college football.

The market for college football

The NY Times brings us up to date on the business which is college football:

What Made College Football More Like the Pros? $7.3 Billion, for a Start
By MARC TRACY and TIM ROHAN

"The story of college football’s gold rush can be told through television contracts. Under the championship playoff format that began this season, ESPN is paying $7.3 billion over 12 years to telecast seven games a year — four major bowl games, two semifinal bowl games and the national championship game. (In the first semifinal on Thursday, Oregon will play Florida State in the Rose Bowl; the title game is on Jan. 12.)

Each of the five major conferences — the Southeastern, the Atlantic Coast, the Pacific-12, the Big 12 and the Big Ten — will see its base revenue increase to about $50 million, from about $28 million under last season’s system. The base revenue will nearly triple for the five conferences that make up the next tier of college football."

Senate Judiciary Committee and College Football Playoffs

The United States Senate Committee on the Judiciary had the following item on its home page yesterday:
"Did You Know? The Senate Judiciary Committee conducted 104 hearings and business meetings in the 110th Congress, more than any other Senate Committee"

There is only one meeting so far on next week's calendar:
Tuesday 7/7/2009
Subcommittee on Antitrust, Competition Policy and Consumer Rights
"The Bowl Championship Series: Is it Fair and In Compliance with Antitrust Law? "

Here's the AP story: Senate to Hold Hearing on College Football's BCS
"The Senate plans to hold a hearing next week looking into antitrust issues surrounding the Bowl Championship Series. It's the second time this year that Congress is shining a light on the polarizing system college football uses to crown its national champion."
...
"Sen. Orrin Hatch of Utah, the subcommittee's top Republican and the lawmaker who sought the hearing, did not return telephone and e-mail messages left at his office Tuesday.
In an essay for Sports Illustrated being released Wednesday, Hatch wrote that the Sherman Antitrust Act prohibits contracts, combinations or conspiracies designed to reduce competition.
''I don't think a more accurate description of what the BCS does exists,'' Hatch wrote. He noted that six conferences get automatic bids to participate in series, while others do not. The system, he argued, ''intentionally and explicitly favors certain participants.''
...
Football fans in Hatch's state were furious that Utah was bypassed for the national championship despite going undefeated in the regular season. Hatch noted that President Barack Obama and others have called for the BCS to be replaced with a playoff system."
...
"David Frohnmayer, president of the University of Oregon and chairman of the BCS Presidential Oversight Committee, expressed a preference Tuesday for the current system, saying the proposals for a playoff system ''disrespect our academic calendars, and they utterly lack a business plan.'' "

College football bowls used to be an unravelled market, and, whatever its other flaws, the BCS system has largely eliminated that problem. While I'm rooting for the Judiciary Committee in their own competition to hold the most hearings, I hope that their efforts will not do too much harm to one of the main reasons we have colleges.

College football teams are hard to rank

At least that's the conclusion of a recent NY Times article, Who’s No. 1?, written before the Thanksgiving weekend games were played.  It begins by noting

"This is the 13th year of the Bowl Championship Series, the byzantine and unpopular system that is supposed to guarantee that the college-football season ends with a championship game between the sport’s two best teams. Comparing teams that usually do not play one another — there are 120 major college-football programs, and each one competes in just 12 games each season — was never going to be easy. Like three egg rolls served to a party of four at a Chinese restaurant, the portions never seem to divide up quite as neatly as they should. This year, for instance, four programs — Oregon, Auburn, Boise State and Texas Christian — have spent much of the season in contention for the two positions in the championship."
...
"In addition to the championship game, the B.C.S. involves four beauty-contest games: the Fiesta, Orange, Rose and Sugar bowls. In the last four years, the teams ranked lower than their opponents by the B.C.S. formula have won 12 of the 20 games established by the system. The putative underdog has also won 6 of the last 8 title games: last year’s championship, in which the higher-rated Alabama defeated Texas, was something of a novelty. If the No. 2 team routinely beats the No. 1 team, it’s worth asking whether the B.C.S. rankings are valid.
...
"Without high-quality out-of-conference games, every major conference is in essence an island unto itself. We can identify the best team in the Pac 10, or the best team in the S.E.C. But we don’t have any good way of comparing the Pac 10 against the S.E.C., or against any other conference. It doesn’t matter how smart your computer rankings are, or how wizened the participants in your poll: there simply isn’t enough worthwhile data to work with."


I've written earlier posts about college football bowls, and how the present system arose in part out of an effort to roll back the unraveling of dates at which teams and bowls were matched...

College football and the BCS National Championship Game

Number 1 ranked Oklahoma will play number 2 ranked Florida Thursday evening in the Bowl Championship Series' National Championship Game, which this year will be played at the Orange Bowl. The championship game is the culmination of a sequence of "bowl" games that the BCS organizes, in which the most successful college teams each season play a final post-season game.

College football doesn't host playoffs. The "championship" game matches the two highest ranked teams at the end of the regular season, based on a more than usually uncertain ranking system (since some of the highly ranked teams will not have played each other). Sports Illustrated just published a story, before the championship game, saying that some of the early bowl games had low Nielsen ratings (which measure television viewership): Ratings are proof the addition of fifth BCS game officially a failure. The article notes
"By removing the top two teams from the existing BCS bowls (Rose, Fiesta, Sugar and Orange), the remaining lineup gets unavoidably watered-down. "

Utku Unver and Guillaume Frechette and I wrote a paper which showed that (under earlier versions of the BCS system) the championship games drew enough extra television viewers to make up for the lower viewership in other bowl games that (consequently) had neither the top nor second ranked team playing in them. (See also this interview about the origin of the BCS system (to which I devoted an earlier post).)

So, while the most exciting thing for some people Thursday evening will be the final score, I'll be waiting to hear the final Nielsen ratings.


(Our European colleagues are always bemused by the large role that college plays in the life of American football players, not to mention the role that football plays in the life of American colleges. While some professional sports have minor leagues or the equivalent, colleges serve that role for football. But that's a story for another time.)

10 PM update: here's a Washington Post story on the more than usual uncertainty in this year's rankings, which may lead to a lack of consensus that the winner of the championship game is the best college team. (The president elect for one is on record as thinking that a playoff system would be more rewarding...)

Unraveling of college football recruiting

Two articles on unraveling in college football recruiting:
Timing is everything with offers: How programs wrestle between getting evals while also making prospects feel wanted

"While coaches like Dooley face challenges to offer early in a prospect's junior year, other coaches have to ramp it up even further. Georgia coach Mark Richt said not offering an in-state prospect can put the Bulldogs in a permanent trail position for a prospect.
"Our biggest problem at Georgia is trying to make those evaluations properly and making those offers," Richt said. "It does put pressure on us sometimes to offer a guy a bit sooner than you'd like to. I think everybody across the board has to project a little more. You have to hope that we've made the right projection.
"If you get your class nailed down a year in advance and all of a sudden some of those guys didn't keep progressing like you thought and some other guys came up, [you say] 'Man, I wish I had waited and offered that kid because I like this guy better than I like that guy.' Some people find a way to dump that guy and take that [other] guy. At Georgia, if we offer and he commits to us, we're not dumping him."

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Iowa recruit not old enough to drive (HT: David Backus)
"Football programs are increasingly entering the territory of basketball scholarship offerings. John Allen was told twice last week Iowa was on the verge of offering his son Brian a football scholarship. John Allen didn't believe it either time. Brian Allen was after all only a high school freshman and had never played varsity football. But on Monday, John Allen called Iowa coach Kirk Ferentz as he was advised, and Ferentz confirmed that he would like to extend a scholarship offer to Brian Allen. "We're all kind of amazed by it," John Allen said. "I don't think it's sunk in yet. He's 15 years old. He can't drive a car yet, etc."
***********

One impetus behind the unraveling of markets is that people make early offers to avoid being left behind as others make even earlier offers. As Yogi Berra said (in a different context), "it gets late early out there."

The NCAA cartel

The March 2018 issue of the Review of Industrial Organization is devoted to a Symposium: The NCAA Cartel

In the Introduction, Roger Blair begins by noting
"Becker (1987) once characterized the National Collegiate Athletic Association (NCAA) as a “cartel in Sheepskin clothing,” which seems to be an apt description. Under the organizing umbrella of the NCAA, the member institutions collusively exploit both monopolistic and monopsonistic power. "

Here's the table of contents

1. Symposium: The NCAA Cartel—Introduction

   Roger D. BlairPages 179-183
   
2. 

   OriginalPaper

   The National Collegiate Athletic Association Cartel: Why it Exists, How it Works, and What it Does

   Allen R. Sanderson, John J. SiegfriedPages 185-209
   
3. 

   OriginalPaper

   Athlete Pay and Competitive Balance in College Athletics

   Brian Mills, Jason WinfreePages 211-229
   
4. 

   OriginalPaper

   Modeling Competitive Imbalance and Self-Regulation in College Sports

   Rodney FortPages 231-251
   
5. 

   OriginalPaper

   Rent Sharing and the Compensation of Head Coaches in Power Five College Football

   Michael A. Leeds, Eva Marikova Leeds, Aaron HarrisPages 253-267
   
6. 

   OriginalPaper

   State of Play: How Do College Football Programs Compete for Student Athletes?

   Jill S. HarrisPages 269-281
   
7. 

   OriginalPaper

   Strategic Interaction in a Repeated Game: Evidence from NCAA Football Recruiting

   Brad R. Humphreys, Jane E. RuseskiPages 283-303
   
8. 

   OriginalPaper

   The Role of Broadcasting in National Collegiate Athletic Association Sports

   Allen R. Sanderson, John J. SiegfriedPages 305-321
   
9. 

   OriginalPaper

   The NCAA and the Rule of Reason

   Herbert HovenkampPages 323-335
   
10. 

    OriginalPaper

    Whither the NCAA: Reforming the System

    Andrew ZimbalistPages 337-350
    
11. 

    OriginalPaper

    The NCAA Cartel and Antitrust Policy

    Roger D. Blair, Wenche WangPages 351-368
    

College football is big business (who knew?)

The Chronicle reports on just how big a business college football has become  With an Assist From Alabama, Southeastern Conference Breaks the $1-Billion Mark

"Thanks to a lucrative television contract and robust earnings generated by several highly ranked football teams, the 12 athletic programs in the league brought in $1,006,798,094 during the 2009-10 fiscal year, according to new data from the Education Department. That's about an 11-percent increase from the previous year and a nearly 77-percent bump from six years ago.
The league's biggest boost came from the University of Alabama, where revenues spiked by 24 percent in 2009-10, to $129.3-million. With its increase, Alabama leapfrogged Ohio State University and the University of Florida to reach No. 2 on the list of biggest revenue-producing programs in all of college sports. The University of Texas, which brought in $143.6-million, remains No. 1."
...
"Still, as revenues have grown, so have expenses: Even though each of the top 20 moneymakers in college sports pulled in more than $75-million last year—eight programs alone made more than $100-million—that doesn't mean all of them turned a profit. Of the 120 athletic programs in Division I-A, all but 14 operated with a deficit*. (For a list of the top 100 earners, see this LSU fan blog, which first reported on the conference's crossing the billion-dollar mark.)"

*"Institutions in Division I-A, which include some of the biggest and wealthiest athletics programs in the NCAA, allocated a median of $10.2-million to their athletic departments in the 2009 fiscal year, according to the NCAA’s annual analysis of Division I financial data. That allocation was an increase from the median of $8-million that universities provided to sports program during the previous year."

Is there an equivalence between (not) paying kidney donors and boxers or football players?

Kim Krawiecz makes a point, in several installments:

December 21, 2017
If You Oppose Paying Kidney Donors, You Should Oppose Paying Football Players And Boxers Too 
"Having concluded that simply advocating for compensated kidney donation was not sufficiently controversial, Phil Cook and I are now turning our sights on professional sports – specifically, professional football and boxing. In a piece just posted to SSRN, we contrast the compensation ban on organ donation with the legal treatment of football, boxing, and other violent sports in which both acute and chronic injuries to participants are common. While there is some debate about how best to regulate these sports in order to reduce the risks, there appears to be no serious debate about whether participants should be paid. Indeed, for the best adult football players, college scholarships and perhaps a professional contract worth multiple millions are possible."


December 22, 2017
Paying Kidney Donors, Football Players, And Boxers: Medical Risks
"the medical risks to a professional career in football, boxing, and other violent sports are much greater both in the near and long term than the risks of donating a kidney. Injuries in such sports are common, and retired players are very often disabled by the long-term effects of these injuries as well the cumulative effect of thousands of blows to the body."

December 24, 2017
Paying Kidney Donors, Football Players, And Boxers: Informed Consent And It’s Limits
"We believe that if NOTA were amended to allow payments to donors, potential kidney donors could be protected against being unduly tempted through the existing structure of screening, counseling, and delay, perhaps with some additional protections to prevent hasty decisions. On the other hand, it is not clear that NFL recruits have such protections in place.

"Whether and when sane, sober, well-informed, adults should be banned by government authority from choosing to engage in an activity that risks their own life and limb is an ancient point of contention. There are a variety of hazardous activities that are permitted with no legal bar to receiving compensation. Included on this list are such occupations as logging, roofing, commercial fishing, and military service. Also included are violent sports such as football, boxing, and mixed martial arts (MMA). These examples illustrate a broad endorsement of the principle that consenting adults should be allowed to exchange (in a probabilistic sense) their physical health and safety for financial compensation, even in some instances where the ultimate product is simply providing a public entertainment.
...
"In short, to the extent that the ban on compensated kidney donation is grounded in a concern that the lure of money may cause donors to disregard the risks of the procedure and subsequent long-term effects, that concern applies with even more force to participation in violent sport.

"This, of course, is just a taste of our analysis and evidence, so read the full paper* for more."

*If We Allow Football Players and Boxers to Be Paid for Entertaining the Public, Why Don't We Allow Kidney Donors to Be Paid for Saving Lives?
Law and Contemporary Problems, Vol. 81, No. 3, 2018
and by Philip J. Cook Kimberly D. Krawiec

December 25, 2017
Paying Kidney Donors, Football Players, And Boxers: Exploitation, Race, Class

"We believe that using words like “coercion” and “exploitation” to characterize the introduction of a new option by which poor people (and others) could earn a substantial amount of money provides more heat than light on this situation. The legitimate ethical concern is that so many Americans are poor, with inequality increasing over time. But that observation does not support a ban on compensation, which in fact limits the options available to the poor and thereby makes a bad situation (their lack of marketable assets) worse. But for anyone not persuaded by this argument, we note that these social-justice concerns apply with at least equal force to compensating boxers; most American professional boxers were raised in lower-income neighborhoods, and are either black or Hispanic.
...
"As more has become known about the dangers of the repeated head trauma, similar arguments regarding football have become more prominent. About 70% of NFL players are black, and Pacific Islanders are also overrepresented as compared to the American population. Accordingly, much attention has been paid to the concussion crisis as a race and class problem. As one observer recently noted, “What’s a little permanent brain damage when you’re facing a life of debilitating poverty?” In reality, NFL players are better educated themselves, and come from better educated homes, than is average for Americans, in part because the NFL typically recruits college students. Still, some NFL players, like some would-be kidney donors, come from poverty."


December 26, 2017
If You Oppose Paying Kidney Donors, You Should Oppose Paying Football Players And Boxers Too: Wrap-Up

"In this series of posts, I’ve discussed a new draft that Phil Cook and I are circulating, If We Allow Football Players and Boxers to Be Paid for Entertaining the Public, Why Don't We Allow Kidney Donors to Be Paid for Saving Lives?. Our claim, which I laid out in my first post, is that there is a stronger case for compensating kidney donors than for compensating participants in violent sports. If this proposition is accepted, one implication is that there are only three logically consistent positions: allow compensation for both kidney donation and for violent sports; allow compensation for kidney donation but not for violent sports; or allow compensation for neither. Our current law and practice is perverse in endorsing a fourth regime, allowing compensation for violent sports but not kidney donation.

A common argument in support of the ban on kidney donation is that if people were offered the temptation of substantial compensation, some would volunteer to donate against their own “true” best interests. This argument is often coupled with a social justice concern, namely that if kidney donors were paid, a large percentage of volunteers would be poor and financially stressed, and for them the offer of a substantial financial inducement would be coercive. In sum, a system of compensated donation would provide an undue temptation, and end up exploiting the poor.

To these arguments we offer both a direct response, and a response by analogy with violent sport. My posts have touched on a few key points. First, the medical risks to a professional career in football, boxing, and other violent sports are much greater both in the near and long term than the risks of donating a kidney. On the other hand, the consent and screening process in professional sports is not as developed as in kidney donation. The social justice concerns stem from the fact that most players are black and some come from impoverished backgrounds."

The post goes on to point out that the (life savings) benefits to kidney patients from kidney donation are huge, and it's hard to argue that they are less deserving or get less benefit than sports spectators. But you get the idea...

College athletes can be paid for endorsements in California: an end to an American repugnance?

College sports in the U.S. has long been an anomaly--our overseas colleagues must run colleges for reasons other than sports, but in the U.S. college sports are a big deal. And being a big-time college athlete leads to lucrative professional careers for some, but while in college the powers that be have long ruled that athletes can't be paid.  That may now be changing.

The NY Times has the story:

California Governor Signs Plan to Let N.C.A.A. Athletes Be Paid
Gov. Gavin Newsom signed a bill to allow college athletes to hire agents and make money from endorsements. The measure, the first of its kind, threatens the business model of college sports.

"The governor’s signature opened a new front of legal pressure against the amateurism model that has been foundational to college sports but has restricted generations of students from earning money while on athletic rosters.

"If the law survives any court challenges, the business of sports would change within a few years for public and private universities in California, including some of the most celebrated brands in American sports. So, too, would the financial opportunities for thousands of student-athletes, who have long been forbidden from trading on their renown to promote products and companies.

“Every single student in the university can market their name, image and likeness; they can go and get a YouTube channel, and they can monetize that,” Newsom said in an interview with The New York Times. “The only group that can’t are athletes. Why is that?
...
"In a statement on Monday, the N.C.A.A., which had warned that it considered the measure “unconstitutional,” said that it would “consider next steps in California” and that “a patchwork of different laws from different states will make unattainable the goal of providing a fair and level playing field.”

The state’s rebuke of a system that generates billions of dollars each year went against powerful universities, including California, Stanford and Southern California. The schools said the law would put their athletes in danger of being barred from routine competitions and showcase events like the College Football Playoff and the men’s and women’s N.C.A.A. basketball tournaments, made-for-TV moments that help some universities log more than $100 million each in annual athletic revenue."

Why can't college athletes be paid?

The NY Times Sunday Magazine on how anomalous it is that we regard paying college athletes as repugnant: Let's Start Paying College Athletes

"The hypocrisy that permeates big-money college sports takes your breath away. College football and men’s basketball have become such huge commercial enterprises that together they generate more than $6 billion in annual revenue, more than the National Basketball Association. A top college coach can make as much or more than a professional coach; Ohio State just agreed to pay Urban Meyer $24 million over six years. Powerful conferences like the S.E.C. and the Pac 12 have signed lucrative TV deals, while the Big 10 and the University of Texas have created their own sports networks. Companies like Coors and Chick-fil-A eagerly toss millions in marketing dollars at college sports. Last year, Turner Broadcasting and CBS signed a 14-year, $10.8 billion deal for the television rights to the N.C.A.A.’s men’s basketball national championship tournament (a k a “March Madness”). And what does the labor force that makes it possible for coaches to earn millions, and causes marketers to spend billions, get? Nothing. The workers are supposed to be content with a scholarship that does not even cover the full cost of attending college. Any student athlete who accepts an unapproved, free hamburger from a coach, or even a fan, is in violation of N.C.A.A. rules."

Football bowls: market design by Congress?

Sports fans will no doubt be relieved to learn that the Feds are on the case: Congress examining fairness, financing of BCS system .

"Tackling an issue sure to rouse sports fans, lawmakers pressed college football officials Friday on switching the Bowl Championship Series to a playoff, with one Texas Republican calling the current system as unworkable as communism and joking it should be labeled "BS," not "BCS."
John Swofford, the coordinator of the BCS, rejected the idea of switching to a playoff, arguing it would threaten the existence of celebrated bowl games. Sponsorships and TV revenue that now go to bowl games would instead be spent on playoff games, "meaning that it will be very difficult for any bowl, including the current BCS bowls, which are among the oldest and most established in the game's history, to survive," Swofford said.
Rep. Joe Barton of Texas, who has introduced legislation that would prevent the NCAA from labeling a game a national championship unless it's the outcome of a playoff system, said that efforts to tinker with the BCS were bound to fail.
"It's like communism," he said at the House Energy and Commerce Committee's commerce, trade and consumer protection subcommittee hearing. "You can't fix it." "

While the BCS system is already a kind of camel (i.e. a horse designed by a committee), it is a considerable improvement over the unraveled market that came before it, in which bowl matchups were frequently mis-matches arranged several weeks before the end of the regular season, see
Frechette, Guillaume, Alvin E. Roth, and M. Utku Unver, "Unraveling Yields Inefficient Matchings: Evidence from Post-Season College Football Bowls," Rand Journal of Economics, 38, 4, Winter 2007, 967-982, with an online appendix).

I'm skeptical that Congress will push this very far, but it is good to know that the country is in such good shape that some of our Congress persons can devote their efforts to this.

HT: Utku Unver

College football bowls

How Economics May Lead to Better Football Games, an interview based on the paper
Frechette, Guillaume, Alvin E. Roth, and M. Utku Unver, "Unraveling Yields Inefficient Matchings: Evidence from Post-Season College Football Bowls," Rand Journal of Economics, 38, 4, Winter 2007, 967-982, with an online appendix).

Paying college athletes before it was legal

 Yesterday I blogged about the new NCAA rules on allowing college athletes to be paid: The ban on paying college athletes is history

It will no doubt shock you to learn that payments were made long before they were legal.  

The Guardian has a book review about that:

Hot Dog Money: behind the bribery scandal that rocked college basketball. A new book looks back at the federal investigation that found bribery and corruption within a major industry, by Andrew Lawrence, Tue 4 Jun 2024

"On 26 September 2018, 10 prominent US college sports figures were arrested in connection with a federal investigation into fraud and corruption. Specifically, the government alleged that business managers and financial advisers had bribed basketball coaches to secure business with NBA-bound players, and that a senior executive with Adidas had further conspired with them to funnel payments to high school players and their families in exchange for their commitment to Adidas-sponsored college sports programs.

"The scandal – which ensnared the top NBA draft pick Deandre Ayton, hall of fame coach Rick Pitino and Kobie Baker, the associate athletic director at Alabama, one of the country’s premier talent factories – was a black eye for the NCAA, the keystone cops who style themselves as virtuous defenders of amateurism in college sports while reaping billions off the backs of student-athletes, the majority of them Black and quite economically disadvantaged. The extent of the scheme wasn’t fully understood until one of the schemers, a middle-aged moneyman named Marty Blazer, was turned into an FBI informant. 

...

"Lawson’s latest nonfiction book, Hot Dog Money, is Blazer’s Goodfellas story – one largely told from Lawson’s one-on-one interviews with Blazer

...

"He was a mid-level financial adviser making six figures trading stocks and bonds with a client roster that slowly grew to include select members of the NFL’s Pittsburgh Steelers. The story of William “Tank” Black, the powerful football agent indicted for running a Ponzi scheme fueled with Detroit coke money, sparked Blazer’s larger ambitions.

"Blazer teamed up with an agent and recruited football players from Pennsylvania colleges with the aim of attaching himself to future pros. That’s where the “hot dog money” came in. Blazer didn’t just pass cash-filled envelopes under the table. He sent money home to players’ struggling families, supplied them with luxury cars, paid for lavish trips to Miami and Las Vegas, and comped their inevitable strip club binges. Sometimes he’d arrange to have girls flown in for parties closer to campus. “The girls are being trafficked, the kids are being trafficked,” says Lawson. “Forget morality, how do you even describe the decency of it all? This is what the swirling of a flushing toilet looks like.”

"In a typical hot dog money scheme, a college player receives cash in the form of a forgivable loan with the understanding that the bagman’s aboveboard services will be retained once the player turns pro; depending on the player, the bagman can make his money back many times over in boring management fees. A proudly devoted husband and father of three, Blazer was more interested in helping his clients make the most out of a corrupt system and went the extra mile to look out for them, paying for information that could help clients avert potential disaster.