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College basketball's big payout
March madness for money

By Stuart Easterling | March 26, 2004 | Page 9

EVERY MARCH, the nation's 64 best college basketball teams gather for "March Madness"--the basketball tournament organized by the National Collegiate Athletic Association (NCAA). The NCAA organizes athletic competition for 1,200 colleges and universities in the U.S., and its basketball tournament is the second most-watched sporting event on TV after the Super Bowl.

Not surprisingly, there's lots of money involved. In 1999, the NCAA signed a $6 billion contract with CBS allowing it to televise the tournament through 2013. Coca-Cola recently coughed up $500 million to be the NCAA's official soft drink.

NCAA President Myles Brand may call college athletics "a valued contribution to the higher education experience," but for many universities, they're basically a cash cow. Former University of Michigan President James Duderstadt rightly notes that college sports exist "for the entertainment of the American public, the financial benefit of coaches, athletic directors, conference commissioners, and NCAA executives and the profit of television networks, sponsors and sports apparel manufacturers."

Along with the big payouts from national TV contracts for events like March Madness, colleges also benefit from TV contracts negotiated with their specific athletic conferences. The Southeastern Conference, for example, recently distributed $101.9 million to its 12 member schools in just one year.

Universities that do better on the basketball court or football field also see bigger financial payoffs. After winning the 2003 national title in football, Ohio State saw its merchandise royalties double to $5 million. With public colleges getting less and less money from federal or state governments, this sort of income helps take up some of the slack.

So a lot more is at stake at events like the "March Madness" tournament than bragging rights. To win, you have to attract the best high school basketball players, and a big-name coach helps. But these coaches cost money.

In California, for example, the highest paid state employee is not the Governator, Arnold Schwarzenegger--it's the coach of the University of California-Los Angeles basketball team, who makes nearly $1 million per year. The success and high salaries of these coaches depend on squeezing as much performance as possible out of the student-athletes they supervise. After all, their careers are judged on wins and losses.

And so the pressure to win is huge, even if it undermines the "higher education experience" for the athletes themselves. University of Miami football coach Jimmy Johnson used to tell his players, "You came to the University of Miami to play football. If you wanted an education, you should have gone to Harvard."

Most college athletes come from working-class and poor families, and the opportunity for an athletic scholarship to a four-year college is a dream come true. But after spending as much as 30-40 hours per week on their sport, the vast majority don't become wealthy professional athletes. In fact, 46 percent of football players and 56 percent of basketball players drop out of college.

Meanwhile, while the universities rake in the big bucks, the student-athletes see little of it. Many people argue that college athletes shouldn't get "paid"--it would undermine the integrity and amateur spirit of college athletics. But there's a financial aspect to this as well.

As NCAA chief Myles Brand notes, "If we paid every student-athlete $100 a month, the CBS contract would be billions of dollars short. So practically, it doesn't make any sense." This means that the NCAA bars universities from even providing athletes with a stipend--similar to what graduate students receive.

Moreover, until recently, the NCAA didn't even allow athletes to work during the academic year to earn their own money. Those from poor families often find themselves under tremendous pressure to accept what the NCAA calls "improper payments." such as cash handouts from wealthy alumni. But even a free cup of coffee can get a player suspended by the NCAA.

Another avenue for quick money is gambling--March Madness is also second to the Super Bowl in the amount of money spent betting on the event. A recent study by the University of Michigan found that more than 5 percent of male college athletes "provided inside information for gambling purposes, bet on a game in which they participated, or accepted money for performing poorly in a game."

This means that on any given campus a half-dozen or so members of the football and basketball teams are likely involved in a dangerous game with professional gamblers. However you look at it, March Madness and college sports are about universities and their sponsors cashing in--and the athletes getting left out.

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