Affluent White student-athletes are profiting from the labor of their poor Black peers, study says

A new study of the economics of college sports found that affluent White students are profiting off the labor of poor Black students.

The study from the National Bureau of Economic Research, published August 31, analyzed revenue data for all 65 athletic departments in the Power Five conferences, home to the NCAA’s top Division I men’s football and basketball programs, from 2006 to 2019. The researchers also collected data from student rosters across all sports in those departments in 2018, including data on the players’ ethnicity and hometowns.

The report found that the money generated by football and basketball programs — whose majority of players are Black — pays for the salaries of coaches and administrators, is used to upgrade facilities the teams use, and finances non-revenue sports played mostly by affluent White student athletes.

The findings come at a time when the years long debate continues to rage over whether college athletes should be paid to play in addition to the scholarships they get that fund their education.

Craig Garthwaite, lead author of the study, told CNN the amount of money in sports has increased exponentially, in some cases nearly doubling over the past 10 years.

“In any other setting, your key input as a business would receive wages that look like the benefit that they provide to the business,” he said. “But here the players are artificially constrained from being able to do that.”

The NCAA did not respond to CNN’s request for comment.

On one hand, critics say by some measures student-athletes overall receive more in benefits than the average American makes in a year in income. While others say paying student-athletes is a fair way to marry the interests of the athletes with the interest of the institutions that are profiting from them, in some cases, many years long after their collegiate career is over.

Huge jump in salaries for football coaches

The data collected produced some key findings: disparities between Black and White student-athletes, socioeconomic status, spending on coaches salaries and spending on collegiate facilities.

“We took every player, in every sport, not just the revenue sports, and tracked them back to their high school and calculated the average family income for students that went to that high school,” Garthwaite said. “So we can actually show that it’s not just the sports that lose money and that survive because football and basketball provide them with extra funds, it’s not just that the students are more likely to be White, but they tend to come from richer families, they’ve gone to high schools where the average family income is higher.”

The average salaries of Power 5 football coaching staffs at public schools grew from $4.8 to $9.8 million from 2008 to 2018, nearly doubling over the past 10 years, according to the data. And football coaches, aren’t the only coaches who saw exponential salary increases, the study shows. Coaches for all other sports at Power 5 schools have also seen an increase from $7.3 to $12.5 million — roughly a 70 percent increase over the past 10 years.

Schools are competing for the best facilities title, spending money on indoor mini golf and slides, and lazy rivers, to attract future potential student athletes.

“Because they can’t pay them, they’re going to pay them in these ridiculous facilities but that seems like a very inefficient way of rewarding players,” Garthwaite said. “What if instead we put that money in a trust fund for the future and health and economic needs of players who don’t end up playing professional football. That might seem like a better use of that money.”

Less than 7 percent of generated revenue goes to football and basketball players in the form of academic scholarships that cover the cost of attendance and a stipend for living expenses, according to Garthwaite and the data.

Based on IRS tax filings, the combined revenue of Power 5 conferences increased by nearly 260 percent from 2008 to 2018, the data shows. Over the same time period, revenues for the NFL and NBA grew by approximately 90 and 110 percent, respectively.

For NCAA, new rules are ‘a challenge’

The NCAA has long said student-athletes could not profit from their collegiate career, but in October 2019 the NCAA reversed its stance following a California law set to take effect in 2023, if it survives its expected court challenges, that allows college athletes to profit from their name, image and likeness.

College athletes in California would also be able to hire an agent licensed by the state to represent them in any deals. Other states are looking at similar possible legislation.

The NCAA has not revealed any details yet for how athletes will “benefit,” saying only in its statement that rules changes should be done on or before January 2021.

“Figuring out all the details of it, it’s going to be a challenge,” NCAA President Mark Emmert told CNN last year. “It’s a much more complex issue than most people see it as. I think schools are going to be able to work through this process and come up with rules that makes great sense for the student athletes and allow universities to continue their collegiate model of athletics.”

And though student-athletes in theory, would profit from their name, image and likeness, the NCAA said the new rules should continue to make compensation for play impermissible and that athletes are not employees of the universities.