Are College Athletes Economically Exploited?

Abstract

This article examines evidence regarding whether student-athletes are economically exploited by their colleges. In particular, it compares an athlete’s cost to the college — including the cost of providing an athletic scholarship — and the revenue that the athlete generates for the college. In addition, it compares an athletic scholarship’s true value to a student and the net revenue (i.e., revenue minus costs) that the athlete generates for the college. The article concludes that the NCAA’s restrictions on student-athlete compensation result in many football and men’s basketball players receiving much less compensation from their colleges than they would in an unrestricted market for their athletic services. Although colleges often use these savings to fund other athletic programs, this practice raises fairness concerns and causes minority student-athletes to subsidize white student-athletes.

Keywords: Athletes, Sports, Colleges, NCAA, Student-Athletes, Race

JEL Classification: I29, J40, L83