On the heels of WatersDemos's excellent diary and the Bobby Knight Board discussion, I got to thinking that it might be worth while having a collaborative debate about the issue of payment to college football players. I would be especially interested in hearing from some MGoEconomists on this issue, given that there are some particularities of the labor market for football services that invite economic thinking.

The Problem

The problem (if it is a problem) with the NCAA rule against players' selling their swag is that it seems to violate principles of personal property rights. So, the logical alternative is to allow players to sell their swag to whomever they choose. This creates an incentive structure in which recruits can be told by coaches that University X has a super rich booster who will give them $100,000 for a couple of signed jerseys. Lesser recruits might only be able to command, say, $50,000 over four years at a lesser school. At this point, college football becomes no different than minor league baseball or hockey, with the prearranged "jersey sales" being tantamount to signing bonuses.

But, this is only a problem if it is defined as a problem; that is, if our sepia-toned memories of what college football used to be like make us unwilling to accept that college football could be a farm system. On the other hand, humans use things like nostalgia and emotion to drive decision-making from time to time—it’s called “culture.”

Solution 1

So, one solution would seem to be a flat wage for all football players, outside of tuition, books, and whatever they currently get for pocket money. So, all players would be paid, say, $2,000 per month for 12 months, essentially a fairly lucrative campus job. That wage could even rise as they progress through college, so that by the time the NFL draft rolls around, the vast majority of players who don’t get selected might have a little money in their pockets to go to grad school, start a business, etc.

Two obvious problems with this:

1. Other NCAA athletes don’t have access to this. It would only be football players; and
2. Although the flat wage would prevent an above-board bidding war for recruits (since there would be no benefit to choosing University X over Y, unlike the return on choosing the Yankees over the Royals), it only creates a new level playing field on which rich boosters would compete under the table. In that sense, it doesn’t really solve any problems. That is, even if (and perhaps because) Terrelle Pryor would earn as much as Drew Dileo, there would still be incentives for back room payments.

Solution 2

Another solution is to create a farm system for the NFL, and force high school players to choose between college and the farm team. It stands to reason that if two of the three other major sports have farm systems, and the NBA has a sort of hybrid (the NBDL would be a true farm system if the players were allowed to sign directly from high school), there would be pressure for the NFL to follow suit.

It seems to me like the crux of the problem is that college football players (like baseball, hockey, and basketball players, and unlike college gymnasts or water polo players) possess a set of skills that, at their highest level, are highly in demand in the professional labor market. This creates all sorts of incentives for players to want to cash in on those skills.

This is what I want some economists’ take on: is it coincidence or causal that the two college sports where recruiting is dirty like dirt in a dirt sandwich are football and basketball, the two major revenue-generating pro sports that don’t have a fully-developed farm system, a la hockey and baseball? My working hypothesis is that having a well-developed farm system—which allows star players to get paid for their services prior to making it to the big show—that reduces the dirt in college baseball or hockey recruiting.

So, if we are truly concerned about such dirt, the solution would be to make the NBDL a true farm system, and to create a NFL farm system. The case of Brandon Jennings is instructive in this respect—recall that because he couldn’t go into either the NBA or NDBL right after high school, he went to Europe to play. I wouldn’t be surprised if this happens more in the future. In this sense, the Euro leagues are like the NBA farm system (see also: Ricky Rubio), but just a really inefficient one as of now.

Anyway, if the NFL did adopt a farm system, it would have to be done like the other farm systems, that is, in conjunction with the NFL. So, no competitive USFL or XFL or even Arena league nonsense. I actually think this could work, by the way. There are plenty of places where (1) football is beloved, (2) there is no local NFL team, and (3) plenty of rooting interest in a nearby NFL team. Or, more nationally, I’m sure the Dallas Cowboys’ farm team—even if it was located in, say, Louisville, KY—would generate plenty of suppport.

The Questions

So I guess the three questions are:

1. Is selling swag under the current system a problem?
2. Would paying players more help the problem?
3. Would an NFL (and true NBA) farm system be (a) economically viable, and (b) solve the problem of dirty practices in college football and basketball?

I'll hang up and listen.