NCAA college basketball finds itself under a dark cloud. Four assistant coaches have been arrested in the wake of what looks like an ever-widening FBI investigation. The gist is that several elite basketball programs used money from sportswear companies and others to lure top-flight recruits to specific colleges, financial advisors, and sports agents. Rick Pitino, the highest paid college basketball coach in the nation, is on an unpaid administrative leave — a procedural step towards firing him — as it comes to light that 98 percent of the money in a deal between Adidas and the University of Louisville found its way into Pitino’s pocket.

Among the FBI’s findings: Adidas employees Jim Gatto and Merl Code agreed to give $100,000 to the family of star recruit Brian Bowen in exchange for Bowen enrolling at the University of Louisville. The criminal complaints say this was part of a larger deal. Once Bowen turned pro, he’d sign with Adidas and work with sports management company recruiter Christian Dawkins and financial advisor Munish Sood.

Growing up I remember Michael Jordan making more money off the court than he did from the Chicago Bulls. But in college ball, a complicated set of NCAA restrictions limits all player compensation. These restrictions create a black market that nobody really wants to talk about. Until the FBI makes them.  

Why Does the NCAA Restrict Player Compensation?

As the NCAA’s website puts it, “Amateur competition is a bedrock principle of college athletics and the NCAA. Maintaining amateurism is crucial to preserving an academic environment in which acquiring a quality education is the first priority.” If you’re a good athlete, a school can give you a scholarship that covers your tuition, fees, and your reasonable living expenses. But that’s it. You can’t get paid anything extra. In fact, you can’t use your athletic skill to make anything extra from anyone. You can’t do marketing deals or appear in commercials. If your college sells your name on a jersey, you don’t get a cut. You can’t have an agent or even agree to be represented by an agent in the future.

The idea is simple: You’re supposed to be a college student first. You need to attend class, do your homework, and keep a certain GPA. The sport is supposed to be secondary.

Not allowing players to collect money was also intended to level the playing field. The concern was that if schools had paid players, their teams would only be as good as their payrolls. There’d be a few winners but mostly losers. Also, would paying players in cash-generating sports mean that non-cash-generating sports would die? After all, when’s the last time you watched college wrestling or cross-country running on TV? Would it raise Title IX issues, since women’s sports don’t generate the same kind of money as the men’s game?  

Is Basketball Uniquely Affected?

The highest money-making sports in college are basketball and football. Here’s the big difference between the two: The value of a single player is much higher in basketball. Remember that with basketball, there are only five guys on the floor at one time. And they’re all playing both offense and defense. In football, you have 11 players on the field. And you’ve got separate groups of players for offense, defense, and specialists like punters and kickers. You also need to field a team large enough to deal with the likelihood of injuries.

So college basketball teams are much smaller than college football teams. And the ability of one or two players to make a huge difference is greater in basketball. We see the same thing at the pro level. Why did the Cleveland Cavaliers and the Golden State Warriors just face off in the NBA championship for the 3rd year in a row? Because they have the same handful of dominating players.

So I suspect the shadow world of under-the-table recruiting practices is greater in basketball than in football.

A Better Way

The NCAA rules are well-intended, but they’re naïve and outdated. The broadcast rights to March Madness are now worth over a billion dollars each year. Schools spend top dollar on facilities, athletic directors, and coaches, because there’s so much money to be made if you compete well. Just ask Butler University, the smallest school to get to the NCAA men’s basketball finals in the history of the modern tournament. Butler lost the championship game in both 2010 and 2011, but reaped at least a billion dollars in TV exposure and media mentions according to experts.

Do the current rules level the playing field? Not really. Yes, you have your small schools like Butler that occasionally break through. But in both basketball and football you have a few powerhouse schools that tend to dominate.

Let’s be honest: The race to the top in college sports is motivated by return on investment. As capitalists, we should not object. But as Christians, we should observe the injustice of a system that enriches everyone except the people that create the product — the players themselves. Why are they not allowed to receive a dime above their academic scholarship? Think about it: Will Tim Tebow, as an athlete, ever make the kind of money that he could have made in a free market while competing as a Heisman-trophy winning quarterback for the University of Florida? It’s highly unlikely.

In fact, most of the college basketball and football players you see on TV will have even less success at the pro level than Tebow had. Their four seasons of eligibility are when they have their highest market value. Their universities will make serious money off their success. But the players themselves will mostly graduate and fade into obscurity. They’ll probably achieving a middle class lifestyle, but won’t make anywhere close to what their market value was as players.

As David French puts it, “In college sports we see the old collision — between the socialist Utopianism of the central planner and the entrepreneurial will of the individual.” What’s French’s solution? Replace the NCAA rule book with one line: “NCAA student-athletes must be enrolled at the school and in good academic standing when practicing with an NCAA-sanctioned team or playing in an NCAA-sanctioned event.” In other words, treat student-athletes like everyone else — as adults with a right to be compensated for their skills. Let schools and advertisers pay them if they so choose. And let the athletes retain agents if they so choose.

It’s a cause that should have support from free-market conservatives and champion-of-the-little guy liberals. If nothing else, it would get rid of the shadow economy now being exposed by the FBI. And it would level the playing field for the players, ending their many years of exploitation.

Dr. Alex Chediak (Ph.D., U.C. Berkeley) is a professor and the author of Thriving at College (Tyndale House, 2011), a roadmap for how students can best navigate the challenges of their college years. His latest book is Beating the College Debt Trap. Learn more about him at www.alexchediak.com or follow him on Twitter (@chediak).