That’s why they pay them the little bucks.

Those of you who don’t appreciate the nuance of the argument some of us make in favor of letting student-athletes’ compensation be reached in the context of an open market ought to give this article a peek.  In it, the author posits what such compensation might look like at college football’s twenty most profitable programs if revenues were shared in a manner similar to how they’re distributed in the NFL.

We calculated the Fair Market Value of college football players at the 20 most profitable programs using data provided by the Department of Education. Using the NFL’s most recent collective bargaining agreement in which the players receive a minimum of 47% of all revenue, each school’s football revenue was split between the school and the athletes with the players’ share divided evenly among the 85 scholarship players.

Using this method, we can estimate that the average college football player at the University of Texas is worth $671,173 per year (up from $622,104 last year) based on the program’s $121.4 million in annual football revenue. That is more than $130,000 ahead of any other school, with the University of Alabama second, at $536,485 per year. Overall, the average Football Bowl Subdivision (Division I-A) player is worth $163,869 per year (up from $149,569 a year ago) with the average football team taking in more than $29 million in revenue each year.

At $479,506 per player, Georgia is sixth on the list.  It would be kind of amusing to watch Greg McGarity’s hand shake as he signed those checks, no?

I’m not pointing this out to advocate that Georgia should be showing its kids that kind of money.  It does, however, provide some contextual rebutting to the argument that paying tuition, room and board and a COA stipend is more than fair treatment.  At least some of you should better understand why some student-athletes say what they do about the money rolling in to the big programs.

One other thing worth mentioning is something Johnny Manziel brought up a few years ago.  Isn’t there a point on the financial scale where student-athlete compensation hits a sweet spot such that players’ incentive to leave school early for the NFL for the promise of a real paycheck is significantly reduced?  Wouldn’t that be a good thing if you’re a college football fan?

33 Comments

Filed under It's Just Bidness

33 responses to “That’s why they pay them the little bucks.

  1. The NCAA, conferences, and university presidents are whores.

    The NFL has a developmental league that they don’t have to invest in.

    It all going to collapse under the weight of greed one day.

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  2. rpcpisme

    Day-um, thats a lot of money. I remember getting my balance of aid check of $1200 and feeling like I was hot shit.

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  3. DawgPhan

    man that is a lot of scratch.

    I can definitely see the late round guys staying. I can also see after 4 years a lot of guys saying no thanks to the NFL. I have $2million and a degree. I will go start my own business, or get a job in the community or things like that. No need to go kill myself in the NFL for a chance at slightly more money.

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    • paul

      Unfortunately, they’re kids. They would likely spend it as fast or faster than they would make it. All the while believing there’s more where that came from. Even today, far more players believe they can play at the next level than actually do. And then there are the guys that are world beaters in college and struggle to stay on the practice team in the NFL. Think those guys are going to save and invest while they’re still in college? Most people that DO play on Sunday are broke within a few years of retirement, if not sooner. Athletic skill is no guarantee of fiscal responsibility.

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  4. I wouldn’t click off my ad blocker, so I wasn’t allowed to read the article. However, there are enough code words and phrases in your post to pick out how this one is going. “Revenues were shared…we calculated the Fair Market Value…revenue was split between the school and the athletes.”

    Additional compensation for student-athletes aside, the concept of revenue sharing among college football teams is asinine, just as it is wherever else it’s practiced.

    Beyond that, be careful with your wishes. Let’s say revenue sharing is introduced. What then? Yep, your college football experience just got a lot more expensive because prices will go up on you the person who foots the bill anyways.. But that’s ok, you can comfort yourself by knowing you are helping 19 of your rivals.

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    • BD, again, not my point. Just pointing out that context matters when you argue that the big schools are already plenty generous with CFB players.

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      • My bad. I’m not good with points.🙂

        Let me try again…

        “Those of you who don’t appreciate the nuance of the argument some of us make in favor of letting student-athletes’ compensation be reached in the context of an open market ought to give this article a peek.”

        If one were to let student-athlete compensation be decided in the context of an open market, then I think the open market should decide and I don’t agree with a revenue sharing approach.

        That being said, Brer Rabbit has successfully gotten us to toss him into the briar patch if we agree to this line of discussion…
        🙂

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    • CB

      Believe it or not, supply and demand still exists in college football (see ticket sales for this year’s WLOCP). The costs wouldn’t be passed on to us unless we allowed them to bc we can sit at home and watch the game or simply scalp tickets. However, you would likely see much less opulent football facilities, and coaching/AD salaries either reduced or at least halted. It’s a simple case of deferred spending.

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  5. Jason

    Why are we pointing to an “Unfair” situation… NFL / Monopoly / Not Fair Market.. and trying to assign a Fair Market Value price for a service?

    Lets add 10 more NFL teams and see if they can maintain those huge stadiums and those high salaries.

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  6. AusDawg85

    I believe their methodology is flawed. Football programs are required, by law, to subsidize non-revenue generating programs under Title IX. To do the calculations correctly, you would need to subtract those expenses before looking at the net operating revenue of the football program to determine the 47% FMV players share. In many cases, that number would be $0 for smaller schools.

    That’s not defending anything, but articles like this distort the truth just as much as the administrators distort the finances.

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    • Noonan

      Sorry to repeat your argument below, I must have been typing while you posted. You are exactly right. It’s a junk article with no significance. Their methodology is not flawed, they are just lazy and trolling for page views, which they got from us.

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    • CB

      Title IX has never been subjected to effecting actual earning potential so it’s a new frontier in that respect, and as such it’s application is unpredictable. Does CKS make the same as the women’s basketball coach? Does football have more scholarship money than any sport at every school? There is already a precedent for spending a discrepancy. The Title IX argument as a deal breaker for the whole notion of revenue sport compensation is short sighted and way oversimplified IMO.

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  7. Noonan

    Food for thought: they are only considering football revenue. In 2014-15, The University of Michigan Athletic Department had $152,477,026 in revenue, and $151,144,964 in expenses, for a net profit of $1,332,062. Why are the expenses so high? Football supports all of the non-revenue sports, including most women’s sports. If you pay football players on the NFL model, non-revenue sports will go away. It’s a can of worms with lots of potential unintended consequences.

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  8. WarD Eagle

    I’ll stand by my argument. If we’d rather give those kids a check and let them join the regular student population, paying for their room, board, meals, tutoring, supplies, etc., etc. that might be a place for discussion.

    However, they’re going to have to pony up to support all the other athletic programs and ultimately drive the costs of college up even more. Guess who ends up holding the bag?

    There will be performance incentives. What if there’s an injury? Why should the program pay for Dr. Andrews time? Let the kid pony up again.

    Not everything is intended to be the NFL. And, doing it “for the kids” isn’t always in the best interest of the kids. It may seem nice to help out a kid now, but what uncloseable doors are we opening?

    If you want the NFL, it’s right their waiting for you. They’re having enough viewership problems as it is, I’m sure they’ll cut you a deal on season tickets. Not that I can tell the difference in price any more.

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    • Were you an Alabama fan growing up?

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    • CB

      “Oh you want me to pay for my own medical expenses at UGA? That’s cool Nick Saban says he’ll cover it plus my salary.” And that squashes the entire premise of this argument.

      These kids would almost certainly have a PA representing them in the event that they actually get compensated. Like it or hate it, they wouldn’t just have terms dictated to them. It doesn’t work like that when you have bargaining power, which they do.

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  9. Senator,

    Have you ever considered revenue sharing related to your blog?

    In all fairness, it’s not easy to type without the remote slipping into the crack of the easy chair and flicking the channel from Maury to one of those judge shows. It might help a brother out to get a little cash back from you. I don’t post much and I’m not a Dawg fan, but that shouldn’t even really matter when you think about it.

    Just food for thought.

    BD🙂

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  10. CB

    I say slap a hard NFL-like (or soft NBA) cap on it so Texas isn’t just outspending everyone and you’ve got yourself a fair and reasonable system.

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  11. CB

    I would also add that salary negotiation for recruits would likely be necessary. I don’t foresee a situation where it would fly to pay a 2 star last minute signing day pick up the same as an incoming top ranked 5 star.

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  12. Macallanlover

    What a silly idea to feel this should be treated like a corporation with profit sharing. If they don’t like this terrible life on the horrific plantation, go form a developmental league and return the game to where it was before big TV money, and little minds corrupted the system to the point it might collapse on itself. It was competitive and most of us fell in love with it as it was. I can live without all the drama and whining.

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    • CB

      Yes, these HS kids, many of whom have been getting through school largely based on athletic ability, should go form a developmental league. That’s a feasible option that they could easily pull off. Makes total sense, why hasn’t anyone suggested this sooner?

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      • Macallanlover

        I think you realize this has been looked at, and studied before, don’t you? Mark Cuban was the most recent I believe. I mean it isn’t like there is a model for this, and the money to make it happen. You either want to be a student athlete, or you need to stay off campus and pursue your career objectives like every other person in this country. Tearing down the game isn’t a very smart direction to take, and incredibility selfish.

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        • CB

          Looked at and studied by Mark Cuban? Well, call off the dogs.

          Selfish for who? How would paying these kids tear down the game? How does that effect your life at all? If minor league baseball teams stopped paying their players would attendance would increase? No, because there isn’t a correlation between athlete compensation and fan interest. It’s a myth created by the NCAA when it dreamed up the term student athlete in order to avoid paying workers comp to injured players. The NLRB has already classified them as employees.

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  13. 92 grad

    I think I would just force all the revenue from tv and tv networks to go to the university. Apply all those millions to the total university budgets rather than just the athletic dept.

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  14. I was absorbing the thoughts/ideas until you said Manziel was for it(ie letting the market set compensation rates)…now I’m against it. Life can be simple if you let it. Really, do we let Texas and Auburn pay players 30 K a year and the Tulane’s of the D-1 world pay what they can afford($0 ) Clearly that won’t add anything to the competitive imbalance problems that already exist. Where is my sarcasm key again. Quite often,as we see on daily basis, the solution is worse than the problem.

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  15. waterloodawg

    That’s a lot of blow.

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