UT’s Athletic Director on Paying Student-Athletes: ‘It Would Hurt the Wrong Folks’

By Tim Taliaferro in 40 Acres, Sports on July 18, 2014 at 8:15 am | 3 Comments

Are student-athletes employees, and should they be paid? It’s a debate that’s still heating up: Northwestern University football players are attempting to unionize, and a group of NCAA athletes recetly won $20 million in a lawsuit alleging that they deserved a cut of the profits from video games bearing their likenesses. Next month, UT athletic director Steve Patterson will speak on the issue at a “Forum on the Future of College Athletics” held by the Big 12 Conference in New York City. In an interview with Alcalde editor-in-chief Tim Taliaferro, he spoke about why he believes student-athletes aren’t employees and shouldn’t be treated as such.

Tim Taliaferro: You’ve said that paying athletes could lead to a loss of non-revenue sports, particularly women’s sports. Why?

Steve Patterson: I think if you are going to reclassify student athletes—or a certain percentage of them—as employees, you may see compensation grow for that group of student-athletes whom certain schools want to compete over. What they’ll do is put additional economic pressure on athletic department budgets, so [they’ll] start paying football players some number. Right now you look across the country, there’s only about a handful of athletic departments that operate at break-even or in the black; you’ve basically got 345 that operate in the red. So if their costs are going to go up dramatically, you’ve got one of two choices: You either have to dramatically raise revenues—which everybody’s already trying to do and working as hard as they can on—or you have to decrease costs.

How do you decrease costs?

Well, what most universities have chosen to do over time is reduce the number of sports they sponsor, thereby reducing the number of scholarships, reducing the number of coaches, reducing the number of opportunities. And you have to consider in an environment where if you’re going to pay football players—as those at Northwestern seek—you’ve got Title IX which is going to require you to pay some number of women’s athletes. So it’s not a one-dollar jump, it’s a two-dollar-for-every-dollar jump. So you’re going to have an exacerbated financial crisis for many, many schools with their sports teams …

The college model has been one where between the revenue-generating sports and the euphemistically called ‘Olympic’ sports—those that run in the red—you sort of try to balance the books as best you can. So if you have dramatically increased costs in basketball and football, I think what you’d see is reduced roster size in football—I think it’s hard to reduce the roster size much in basketball—and then you probably have to make tough decisions about all of the non-revenue Olympic sports, so you reduce your costs there so that you have a comparable number of student-athletes on the women’s side, so maybe you keep something like rowing because there’s a lot of student-athletes, you keep womens’ basketball, and maybe you get … I don’t know, pick a team. Tennis, golf, something that’s not that expensive, and you wipe everything else out. And that’s a bad thing for colleges and that’s a bad thing for students and student-athletes, particularly when you consider that next to the GI bill the next-largest source of college scholarships in America are student-athlete athletic scholarships. And when you consider the changes that the GI bill has brought in this country over the last 60 years, it’s getting pretty dramatic. In many, many cases, student-athletes are first-generation college students, so—

So it would be hurting the wrong people.

You’re hurting the wrong folks. And most first-time college attendees struggle to graduate because they don’t come from an environment that has been as rich in academics, but first-time college attendees who are student-athletes graduate at a much, much higher rate. First-time college attendees—generally the number you see quoted—graduate at about a 15 percent rate, whereas college student-athletes as a whole graduate at a 75-85 percent rate, largely because of the student services provided by the universities to make sure that they graduate.

It sounds like this is chiefly a business-type problem, right? I mean, these are cold, hard realities, numbers …

When you’re getting challenged by somebody who’s basically a bunch of labor and antitrust lawyers who are looking to make a fee and be involved in a process as agents on a go-forth basis, they’ll try to wrap themselves in the flag of all kinds of student rights. But you look at the claims; at the University of Texas, we actually address every single one of the claims but one, and that’s the right of a student-athlete to monetize their likeness. We don’t allow them to do that because the NCAA doesn’t allow that; the reason that’s not allowed is the competitive advantage or disadvantage it could provide for any particular school where if you had particularly wealthy boosters they could just pay to acquire the student services at a particular game at a particular university to play the particular game. It also puts you in competition with the university and would negatively impact the revenues that the school generates to try to support all of the college’s athletics and all the services.

The reality is the market probably has value for 1/2 of 1 percent for all of the student-athletes that are out there. I was at ASU and now at Texas, two of the most storied [college baseball] programs in America. Both of them had about 100 athletes go on and even have a cup of coffee in the pros. You’re talking about a tiny, tiny fraction of the half of a million student-athletes a year that are competing, and you’re going to try to destroy the system for that half of a percent of student-athletes, when the reality is their claim, their beef, isn’t with the university or the NCAA system. If they want to be employees, go to the NBA, go to the NFL, go to the NHL, go to Major League Baseball. We have student-athletes; they have employees.

I think the universities as a whole, the conferences and the NCAA, have done a lousy job of telling the story of what college athletics is really about. On our campus, we have 500 student-athletes. But for their athletic scholarship they wouldn’t be able to come to a place like this, they wouldn’t be able to get an education like this, they wouldn’t be able to change their life like this. And every day we see former student-athletes come back and say, ‘This was the greatest experience; this changed my life; if it weren’t for going to a particular university I wouldn’t be where I am in life today.’ That’s what we’re about. We’re not about the one-half of one percent that might have a chance to play in the pros for an average of four years.

There’s a persistent line of reasoning that UT has all this money, they could stand to do more for these students. Is that a fair charge?

We have been a supporter of full cost of attendance for years, and I think most of the schools in the big five conferences are supportive of that. The difficulty will be for the sort of mid-majors at the smaller schools, and how they deal with that. But that whole discussion is fraught with a level of detail that it is a story that is hard to discuss without getting so far into the weeds that people’s eyes just glaze over.

There’s another broad conception that college athletics is this huge moneymaker for schools. As you said earlier, only a handful end up coming out ahead or breaking even. Why is there this perception that there’s all this money in college sports?

When a school or a commissioner makes a great deal in order to toot their own horn and advance their own careers, they’ll talk about the size of a media deal, for instance, or a sponsorship deal. But those stories really only reflect the top-line gross revenues of a deal and don’t really talk about the associated costs. So the perception that is created—and I’m not blaming the media, I’m blaming the purveyors of the message—those media messages are easy to misinterpret that on a net basis you’re doing well, when all they’re really talking about is gross revenues.

Where does the NCAA stand on this?”

Well, I think the big five conferences have been in favor of more autonomy to be able to make their own rules to provide the best level of service for their student-athletes that they can afford. Like any legislative body of 351 entities, you’re going to have differences of opinion over how it ought to be run. The five conferences are not the majority, and so it’s been a difficult legislative process, and it’s been going on for a number of years. It appears, at once optimistic, that we may be headed to a negotiated system that would grant some level of autonomy for the larger schools to address issues such as full cost of attendance.

What is UT doing on this issue?

Well, we are going to continue to be part of the discussion. We’re changing lots of rules. I’ve been very out front in talking about these issues, both publicly and privately, and with other ADs. I think we need to do a better job of telling our story of the vast majority of 500+ student-athletes that we have here, and how we provide services for those student-athletes, so that they can have successful outcomes and wind up leaving here better than when they came and having better opportunities than when they came. And I think that’s what we’re doing.

Editor’s Note: The first of the Big 12 forums will be August 6, at 4 p.m. ET, in the Trianon Ballroom at the New York Hilton Midtown Hotel, a broad-based panel from college athletics and the sports media, including Patterson, will sit down to discuss the current state of intercollegiate athletics and its place within the context of higher education.

Photo courtesy UT Athletics.

Tags: athletic director, paying athletes, Steve Patterson, student-athletes, texas sports