Imagine that you could run a business that relied on volunteer labor, was so popular it was worth many millions of dollars, and was largely tax free.

Sounds illegal, but it's not. It's an accurate description of college football and college basketball programs.

I have a bit of a hard time with the NCAA rules, and today's sanctions against USC are a good  enough reason as any to post on this topic.

With colleges serving as the de-facto farm teams for pro-basketball and pro-football, anyone who wants to play in the pros pretty much has to go through them to make it big. These players are tightly controlled by the colleges. They can't, for example, get a paycheck from a local car dealership to be in a commercial, or sometimes even take a more legitimate job (file clerk, car washer, intern) at a local business, for fear they are getting a special deal from an alum. In a sport like football, where one injury can end your career, these players may never see a paycheck for their profession if an injury takes them out while they're still in school. But they are barred from making money in this way while they are there.

These same things don't apply to other students. "Student-athletes" are the only ones who can't take advantage of their talents. "Student-novelists" can sell their writing. "Student-singers" can release albums. "Student-programmers" can start profitable websites. But student-athletes … nothing.

The rationale is that it protects competition. Schools in theory shouldn't be able to dominate because they can't offer perks to recruit players. But of course, schools still do dominate. They spend millions on their coaches, facilities, etc, trying to lure athletes. The same schools who dominated a sport before the NCAA came into existence are generally still the powerhouses now.

A former NCAA president has a much harsher take than I do:

"Today the NCAA Presidents Commission is preoccupied with tightening a few loose bolts in a worn machine, firmly committed to the neo-plantation belief that the enormous proceeds from college games belong to the overseers (administrators) and supervisors (coaches). The plantation workers performing in the arena may only receive those benefits authorized by the overseers."

I'm not willing to go back to the slave plantation here, but I think it's interesting it came from a former NCAA President.

This isn't just about sports. Film festivals are another good example of the phenomenon, though on a much smaller scale. Volunteer filmmakers make a movie, the festival takes in huge box office receipts (I'm thinking of the really big-name festivals here), and doesn't pay tax on it. I can't find a film festival that pays it's filmmakers (though I might be missing one or two). All because the filmmaker hopes to sell their film or use the laurels from the festival to self-promote it (or to land a deal for another film). They probably have about the same odds of making it as the collegiate athlete, though fortunately not the risk of a career-ending injury.
All of it comes down to basic economics. There are so many people who want to be Hollywood filmmakers and NFL players that, according to the market, their labor is worth essentially zero until they've made it through a series of hoops.

But of course their labor is worth more than zero.

Some former college players have formed a player's association working to change the status-quo. Whatever competitive benefits result from the NCAA (and I'm not entirely sure there are any, but we'll leave that aside) could be preserved while still giving student athletes more.

The list of goals the Players Association has is well worth a read (click the link above). Even the smaller points, like preventing a college from ending a scholarship after a career-ending injury, would make a big difference.