Protecting College Athletes Ought To Be A Slam Dunk

When University of Louisville sophomore Kevin Ware stepped onto the court for the NCAA men’s college basketball “Elite Eight” game against Duke University, a lot of money was at stake.

A victory could increase the already-hefty $40 million Louisville brings in from its basketball program annually, and it certainly wouldn’t hurt the earning power of Louisville coach Pick Pitino, whose current $5 million salary makes him the second highest paid coach in college basketball.

One payday that wasn’t in play, however, was Ware’s. Win or lose, Ware would earn nothing from that night’s game. But he was set for an even bigger loss, as he suffered a severely broken leg that could permanently derail his basketball career.

March Madness is over – with Ware’s team taking the ultimate tournament win without him – but Ware is just beginning a long process of recuperation. I hope his broken leg will at least serve to focus attention to an equally broken system of so-called amateur college sports.

Though they work long hours and put their own safety and future careers on the line in the service of an extremely profitable industry, college athletes still lack the basic protections granted to other workers.

The New York Times, MSNBC, and The Daily Show were among the many outlets that addressed this issue in the aftermath of Ware’s injury. The NCAA, which keeps individual college athletic programs on tight regulatory reins, claims that players must be protected from the corrupting influences of commercialism. To do this, it holds on to all the commercial benefits of their work.

As I have written before, the NCAA does not have a problem with student athletes’ hard-earned reputations being used for profit. To the contrary, the organization brings in billions of dollars each year, largely through media agreements, including a 14-year, $10.8 billion agreement with CBS. But the NCAA does not pay athletes, does not allow colleges to pay athletes beyond providing scholarships, and even prevents athletes from receiving money from outside endorsements.

The NCAA and its supporters claim that college athletes receive something far more valuable that any media endorsement: a college education. Yet according to a recent study from Drexel University’s Sport Management Department and the National College Players Association, even top players often still pay part of their tuition out of pocket. The study estimated that, in a free market, men’s basketball players in the six BCS conferences would on average earn $715,000 more in their college careers than what they actually receive in scholarships.

It is possible to argue, as many do, that those lost potential earnings are simply the price college players willingly pay to enter an arena where they can attract the attention of professional scouts. But as Ware’s gruesome injury highlights, college sports can put an end to some athletes’ prospects, rather than bolstering them. In those cases, students walk, or limp, away from their experiences with nothing to show but broken limbs – and lingering medical and tuition bills.

Louisville provides insurance for varsity athletes, which will supplement the Ware family’s private coverage so that he will not have any out-of-pocket expenses for his immediate medical care. The NCAA also has a catastrophic policy to pay for costs over $90,000. However, neither Louisville nor the NCAA covers former college athletes. If complications from Ware’s injury last longer than his college basketball career, he will be on his own.

Perhaps the biggest problem with that lapse is that, in many cases, an injury is what puts an end to a student’s athletic career. That was what happened to Kyle Hardrick, a former basketball player at the University of Oklahoma, whose mother testified before a Congressional panel on college athletics in 2011. After Hardrick injured his knee on the court, he lost his scholarship, and his family had to pay $10,000 out-of-pocket for an MRI. Most student athletes receive renewable one-year scholarships, which give schools the opportunity to dump them if their skills deteriorate, even if the cause is an injury sustained while bringing in money for the school.

A recent California law takes on this problem, requiring schools that generate more than $10 million in annual media revenues from athletics to continue the scholarships of injured athletes. The law also requires these schools to cover deductibles for all injuries that occur during practice or games. This is a good start, but other states have been slow to follow suit.

The NCAA’s claim that college athletes are just regular students who happen to play sports for the joy of competition is, in the case of the big-money sports at least, a pure fiction that makes possible the most blatant exploitation. Since college athletes do not have employee status, they cannot file for workers’ compensation, take out disability insurance or negotiate for better terms.

Ware is expected to be able to play again, though it is anyone’s guess whether he will ever perform at the level he might have reached had it not been for his nationally televised injury.

Here’s hoping that through his misfortune, Ware will at least score some points against college athletes’ true opponent: the NCAA.

About Larry M. Elkin 564 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

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