Sports Law • Risk Management

March 25, 2011: Nader Proposes To Do Away With Athletic Scholarships

If colleges were no longer permitted to offer athletic scholarships, how would the game change? The Seattle Times reported late last night that Ralph Nader is seeking to change the way the game of sports is played at the university level.

It is suggested that in collegiate sports, young athletes are being exploited for financial gain and big-time collegiate moneymaking sports programs like basketball and football are wrongfully protected under non-profit tax shelters. Ralph Nader thinks collegiate athletics emulate the model of professional sports and therefore should be subject to revision. Nader further suggests that running quasi-professional programs are not in alignment with the mission of higher education.

Because of Nader's concerns, he has proposed that athletic scholarships be replaced entirely with need-based financial aid. Alternatively, he suggests that should there be a desire to continue to run these sports programs more like professional programs, then athletic departments should function as a for-profit.

I am sure we will see resistance to Nader’s proposal from large Division I programs who greatly profit from this endeavor. It is difficult to imagine American culture without the carrot of athletic scholarships to attract talented athletes. Furthermore, several collegiate athletic programs fund athletic scholarships from ticket sales and private donations. Should universities be forced to put athletes back into the financial aid pool of other students diminishes what is available for the rest of the students on campus seeking funding for higher education. This would mean that some athletes would walk away from college owing large sums of student loans rather than leaving college with a degree and free of debt.

Another potential consequence of Nader's proposal is that some athletes may declare for the professional draft sooner instead of taking the college route. Additionally, organizations like the NFL may be forced to reconsider whether or not to allow high school seniors declare for the draft. While some colleges may be able tp change the tax status of its athletic programs, let us consider what would happen if the athletic programs were, however, run independent of a collegiate institution. For instance, athletes may have less incentive to both attend school and play in a private pre-professional sports program. The NCAA currently restricts the amount of time an athlete can be required to take part in a sport. Without keeping varsity athletics as part of the collegiate programs, athletes might be expected to give more of a commitment to their sport and be unable to also balance an academic workload.

Either of Nader’s proposed changes might discourage high school seniors from entering and/or finishing college. Although perhaps revisions can be made to promote amateurism of collegiate athletics, this does not sound like something that should be encouraged in its raw form.