If you hated what I wrote about player compensation yesterday…, part one.

A sample comment from yesterday’s post thread:

Senator you can’t compare professional athletes with the collegiate system. There is a lack of talent to fill major league rosters. Therefore the market value dictates a players salary, and the television (especially for the NFL) dictates a lot of the national revenue. But Mike Trout playing for the Angels can affect the revenue by a much larger % than Todd Gurley for UGA. UGA fills the stadium regardless of an individual athlete. Plus the NFL owner keeps all the revenue in colleges it goes back into non revenue sports and improved opportunities for student athletes. Its not even close to a valid comparison.

To which, reality responds.

Rising administrative and support staff pay is one of the biggest reasons otherwise profitable or self-sufficient athletic departments run deficits, according to a Washington Post review of thousands of pages of financial records from athletic departments at 48 schools in the five wealthiest conferences in college sports. In a decade, the non-coaching payrolls at the schools, combined, rose from $454 million to $767 million, a 69 percent jump.

College sports officials long have cited rising costs both to justify mandatory student fees supporting athletics and to argue against paying college athletes. One of the fastest-increasing athletic costs at many of America’s largest public universities, however, is the amount of money flowing into the paychecks of the people running those athletic departments.

From 2004 to 2014, UCLA Athletic Director Dan Guerrero’s salary increased from $299,000 to $920,000 to do the same job, and his administration grew from 97 to 141 employees, boosting UCLA’s non-coaching payroll from $9.1 million to $16 million. (All 2004 figures in this story have been adjusted for inflation.)

In 2004, University of Michigan Athletic Director William Martin made $361,000, and 15 of his administrative employees made $100,000 or more. Ten years later, Michigan Athletic Director Dave Brandon made $900,000, and the number of his administrative staffers making $100,000 or more had risen to 34.

In 2004, 12 football teams in the “Power Five” conferences — the ACC, Southeastern Conference, Big Ten, Big 12 and Pacific-12 — spent more than $1 million on staffers who were not coaches. A decade later, 34 football teams had seven-figure support staff payrolls. At Clemson University, the football coach’s chief of staff — his official title is “associate athletic director of football administration” — makes $252,000, a salary that exceeds what some athletic directors at big colleges made a decade ago.

The money’s coming in and it’s not going to the labor force.  As Ramogi Huma puts it, “The money has to go somewhere.”

Please, read the whole thing and let me know why you really think there’s nothing wrong with big time college football’s financial status quo.

10 Comments

Filed under College Football, It's Just Bidness

10 responses to “If you hated what I wrote about player compensation yesterday…, part one.

  1. Jared S.

    I wasn’t sure about the numbers in this story – all the comparison of 2004 to 2014 – until I read “All 2004 figures in this story have been adjusted for inflation.” Holy Shit.

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  2. GaskillDawg

    I do not know how to assign an economic value to Nick Chubb to UGA, and I certainly do not know how to assign an economic value to a second string right guard. There is value to a the players as a group, because without players there would be no games to televise or sell tickets to.

    I do know that the NBA and the NFL used the oldest method in the book to determine the value to each league of the players as a whole; they engaged in bargaining. The leagues in which the players and owners negotiated the value of having players both assign approximately 50% of revenues to the players for players compensation.

    If Alabama’s football team generates $95.3 million in revenues, according to NBCSports.com, then using the metric based upon free market bargaining, the football players at Alabama would be worth in the aggregate over $47 million to be spread out over the 105 players.

    I do not suggest any particular percentage of revenues as a measure of the player’s values, but even if it is a paltry 10% fit would result in a per player value much in excess of the cost of attending Alabama, plus the value of coaching plus the value of the Nike gear (which Alabama gets paid for the players to wear, by the way.) My view is that the players are worth more than 10% of the revenues, but that is just me. The players as a group are worth more than some of the suits in the B-M building whose annual pay exceeds the value of the scholarship, as far as I am concerned.

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    • As an aside, pro leagues are increasingly engaging in advanced statistics to help value players. Jason Heyward got the contract he did because he was a 6 win guy last year (and generated quite a few wins the preceeding seasons), and that’s a bout market average for wins (well, it’s a little short, but his contract was high enough to run into plenty of other considerations. Nobody was ready to pay him more than Trout, and he should not make more than Trout).

      Remember, there are avenues for players to make money that don’t come at the expense of anyone else. Sure, UGA should be splitting some of the official jersey sales (at least while the player attends school). Allowing kids to seek alternate opportunity to profit on their own images/autographs/memorabilia/etc would be a big start though. It wouldn’t clear up all the problems, but it would be a gigantic step.

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  3. Atticus

    I still stand by what I said. But I agree with you here, the coaches salaries are getting out of control as is the license wear deals. Still doesn’t make a valid case for sharing a much higher % the revenue (beyond a few hundred thousand dollars they currently receive in benefits) with the labor market the way some propose. There is inequity no doubt. Just like there is no way Jason Heyward will bring back $23 million in revenue to the Cubs, or some big exec at Apple making $5 million. Both have systems set up in the past, systems that created the platform to create a product the public will purchase. And the TV money from the playoff and the conference networks is primarily driving that. But the answer in my opinion is not paying each player a market driven salary based upon the % of revenue. It just won’t work.

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    • GaskillDawg

      It will “work” to pay the players a percentage of revenue, just as it will “work” to pay them nothing. The SEC will field teams in any event.
      The big issue, as I see it, is whether the anti-trust laws allow the NCAA to set a player compensation at the value of the cost of attending the university. The 10th circuit court of appeals upheld the finding that the players and schools are buyers and sellers in the relevant markets and the ant-trust laws govern those markets. In my simple opinion the greater the disparity between the revenues the players generate and the cap the NCAA places on the players’ monetary return for their efforts the greater the likelihood that the courts will fashion a remedy involving the players getting a share of the revenue.

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      • DawgPhan

        I doubt that the NCAA could legally set a cap. Each league probably could set a cap. More likely the player organize and collectively bargain.

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        • Gaskilldawg

          I read the O’Bannon district court opinion to be 100% consistent with your post. It implied that the SEC teams could set their own scholarship limits, the ACC could, and so on, but the conferences could not collude with each other to limit the terms of a scholarship.

          Your second sentence is spot on, too. When the Northwestern players sought to certify their group folks on this board acted as if they were asking the NLRB to authorize them to drink Dawg Fans’ liquor and sleep with their wives, but the NFL owners and NBA owners want players associations for the very reason that a collective bargaining allows the players in the market to solve the issues themselves.

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      • Atticus

        Oh I agree it will happen. I just disagree it will work in that collegiate athletics will be adversely affected. The SEC may still fields teams, no doubt, but believe me, the sport will not be the same. Maybe that’s the point, its too late. COA vs % of revenue is a joke, they already receive hundreds of thousand of dollars in benefits. Dumpster fire is coming, especially when you involve the courts. Next thing we will see is high schoolers at these big schools wanting to get paid…little league baseball players wanting a % of the revenue from the World Series. Its a freaking joke honestly.

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        • Gaskilldawg

          To each his own. I will enjoy watching Eason play in exchange for a monthly check in addition to his scholarship just as much as I enjoyed in my youth watching the players who got under the table money. I guess having “pay to the order of …” Instead of cash in an envelope ruins the experience.

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    • peacedogattack

      Jason Heyward was worth more money than that last year. It’s not merely in the “generation of revenue” that he justifies the contract.

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