The NCAA refuses to pay its players because it would lose its nonprofit status if it did.
The NCAA qualifies for the non-profit exemption because it claims to be "organized and operated exclusively for educational purposes." Which of course is totally ridiculous given the fact that in October the NCAA passed the $500 million mark in net assets. All of which was generated by its precious "student athletes". All of this money is tax free thanks to the fact that despite their financial gains, since the players are compensated in free education and not money. If they lost their nonprofit status they would have to pay approximately 200 million dollars in taxes. That's a pretty powerful incentive. Also, if the NCAA was not a nonprofit organization the players could unionize and get what they deserve. Ohio State's football program alone raked in $35,721,714 in the 2011-12 season. If you have an average CBA split of 50% to the school and 50% to the players, that's $210,128 per player per year. This is without the money they would make if the NCAA video games actually had to pay for their likenesses and the money they would make off endorsement deals. The NCAA uses players to make money for themselves and refuses to give them what they deserve.