July 28, 2008

AJC asks should athletes get paid?


The AJC looked at the idea of paying college athletes. They wrote pro and a con piece in Sunday's paper. Senator Blutarsky has also written a piece on this topic called "Chasing the Almighty Dollar." I suggest reading all three for a balanced view of the issue.

Here's my take on the issue:
Proponents of paying student-athletes generally ignore or belittle the investment in them currently. Without a full appreciation for that investment and the future benefit derived from those resources, you can't judge what an appropriate level of compensation really is.

In the 2004-2005 academic year (source: NCAA Financial Reports Database), UGA's football related expenses were $12.5 million. Even if you remove coaching salaries from the equation, we still spent $8.7 million on our football program that year.

Split across 85 scholarship athletes
that's over $103,000 per player.


That money goes towards:
  • Educating football players
  • Tutoring them
  • Mentoring them.
  • Feeding them
  • Housing them
  • Transporting them
  • Training them
  • Clothing and equipment for them
  • Repairing / healing / treating them
  • Recruiting more of them so the current ones will keep winning
  • Paying other teams to come play them
That doesn't include the additional cost to:
  • Marketing and promoting them (they DO benefit from this via future endorsements or professional networking / visibility opportunities for non-pros)
  • Giving them world class facilities from which to be pampered. Facilities well beyond the normal eating, sleeping, studying or non-standard learning facilities available to other students.
Over a 4 year career, Georgia invests $400,000 per player into its football program (not including the coaching salaries needed to make them champions).

Yes. Georgia does make a profit from football. That same academic year the net football related profit was $38 million. But it's UGA that is assuming the bulk of the risk in recruiting the player.

Obviously, the player risks injury. Obviously, the player is required to work extremely hard; however, the risk in having that player "pan out" is enormous. The University recruits about 100 players over a 4 year period. Only a fraction of those players will ever be starters. As Paul Hewitt pointed out, only 1-2 players per year will actually move the needle on merchandising or attendance more than the player backing him up.

So beyond the $400k per career that we're investing. How much more should we really look at spending? Particularly when MOST athletic departments operate at a loss, most sports operate at an even bigger loss and most athletes don't pan out in a way that generates revenue for their school.

I respect all of the effort that student-athletes put into becoming champions and entertaining us as fans. However, paying them would wreck collegiate sports, and more importantly it would belittle the current investment already made in them.

Am I way off base?

PWD


(BTW -- If you're wondering. The metric is roughly the same for men's basketball. About $130k per year spent per athlete NOT including coaches salaries on the program)

20 comments:

Anonymous said...

What your saying is that for every dollar a schollie player cost the university, they generate over 4 dollars in profit. Not income, but profit. No other industry has such a low pay scale when comparing compensation with profit produced.

Pete said...

Yes, you're way off base.

You're talking about the dollar amount spent on the player, not the amount of benefit they receive. They're not the same and they're only tangentially related.

Look at it this way, if you buy me a $300 chocolate bar, but I don't really think it's that much better than a $1 chocolate bar from the gas station, you might have spent $300, but I've only gotten $1 of benefit.

The discussion isn't about "cost" it should be about "value".

James said...

No, you aren't way off base. As you said, if a critic doesn't understand or fully appreciate the value of what the player is getting in opporunity (from just an education point of view) then I doubt you'll come to much agreement anyway. They are getting opportunities that most of us pre-HOPE had to scrounge around and pay for.

Yeah, I know, we're supposed to be just some sort of football factory. But the opportunity at a high quality and free education means something whether it's taken advantage of or not.

The amounts of money being spent on athletics right now is unbelievable. Actually having to pay athletes would open up a pandora's box of how much to pay and which ones get what. Because as you were pointing out they are not all at equal level of contributions. Can you imagine the nightmare of sorting that out alone?

Paul Westerdawg said...

But Pete, my future earning potential as a student-athlete....even if I never start....is dramatically elevated because of my association with the university's football team.

My ability to generate elevated income in sales later in life is higher.

Don't you think that should factor into the value I receive?

Anonymous said...

As a rule, I have been in favor of something for players. Pay would be good, I thought, or even letting them get jobs like any other student could. The NCAA has as a goal to normalize the experience for the student-athlete and have him or her enjoy the college experience, and well, to be like other students. So now we don't have athletic dorms, for one example. Trouble is, there are so many things that normal students can do that athletes can not: can't work outside jobs, can't skip class if they want to, if they have a family emergency and have no car or gas money, it's an NCAA violation to help them if you are a coach/faculty member/booster. Just so many things make them different in ways that you don't think about until they happen that a little compensation to make up for it seems fair to me.

However, I read Myles Brand article and realized that to some degree, many of us think with football in mind, and he thinks with all sports in mind. In other words football makes money (for some schools) and basketball makes money (for some schools), but track and field, swimming, tennis, equestrian, volleyball, golf, baseball, softball, gymnastics (UGA and a couple of others aside) fencing, wrestling, etc., etc. do not make money. The NCAA needs a policy that can be useful across the board, and paying football players but not other athletes is going to cause problems, quite likely legal problems. So, now I am a person who thinks some compensation would be fair, but I really don't know how to make it happen.

dean said...

Another thing to consider is how much would you have to pay each student-athlete? There's no way to pay just the football team or the football and basketball teams or the mens programs. You'd have to pay every single student-athlete. This would be opening the proverbial Pandora's box. Because then if you do pay the student-athletes do you pay starters more than back-ups? Do you pay football players more than basketball players.

A small fraction of these student-athletes will have the opportunity to make millions in the professional ranks while the others get an education at the university's expense (to some degree). Already sounds like a win-win situation to me.

Hunkering Hank said...

How 'bout a need-based arrangement? In other words, if you're a lineman (or volleyball player) from Marist and you get a scholarship to Georgia and your dad makes $200K+ per year, you get nothing and like it. But if you're some poor kid from a trailer park in middle-of-nowhere Georgia and your Grandma, your twelve cousins, and you get by on her social security check then you get a larger amount of walking around money.

Maybe this type of need-based aid is already available to student-athletes, I don't know.

skidawg1985 said...

My thought was: "This argument AGAIN".

Stale.

I am all for recycling, but not in these instances!

Anonymous said...

Hunkering Hank...

they already have that, its called the Pell Grant, and a ton of athletes get them.

Now, if they NCAA would just take the cap off and let them get the maximum, things would be even better.

Atlchris said...

No, you are absolutely right PWD. I am attending college now. Any idea how much tuition is? Then when you combine tuition with housing, then meals the price skyrockets. So basically, student-athletes are getting food, housing, an education, and automatic resume' credentials just for playing collegiate sports... I use to beleive in paying student athletes but, but after having to work and pay for school myself, I no longer beleive that. These young men are basically investing in something(their job futures using their education) without using their own money; not including the extra perks (Housing, food, travel, tutoring, and etc.). Several student athletes go on to make great careers using the education they recieved that they did not pay a penny for, and I beleive it's an equal trade-off for what the student does for the university.

Anonymous said...

Essentially with the 3 year rule in the NFL players must arbitrarily wait to get that big pay day until after their redshirt sophmore year or their junior year. Moreno is a prime example. Barring this rediculous 3 year rule in effect, he could have went pro: the net result being a multi-million dollar payday. Compare that with your figure of roughly $100,000 and you see a huge descrepancy. Who am I to begrudge a young man of fame and fortune in his profession? I understand the NFL 3 year rule is not an NCAA rule, but the NCAA sure benefits from keeping the kids around ($$$$). Some sort of compensation should be allowed for these kids who represent their respective universities well and generate income which can go toward a multitude of university improvements and programs. How is it that we are mortified at the prospect of a young Asian kid sewing a stitching together a soccer ball for a couple of bucks when Nike turns around and sells said ball for $50, but when we see this exploitation of college athletes we choose to look the other way? It's drastic analogy, but its a perfect example of a cost-benefit descrepancy. Surely UGA could spare our kids a couple bucks to get a pizza and take a girl on a date. Sorry so long winded...

Anonymous said...

Except that every Asian kid at Nike produces balls.

Not every recruit plays at UGA. About half crack the two deep.

So...should only guys getting playing time get paid? Or should everyone get a little and Stafford and Moreno get A LOT.

How exactly does it work so that it's fair?

Logically, Sturdivant would be the 3rd highest paid player on the team. Elite Left Tackles in the NFL are the 2nd highest paid player on the team.

How much should we play Sturdy? He's doing the blocking. If he goes down, Moreno's yards will go down.

What's fair?

James said...

I don't really know what's "fair". However, I do know that the current system is terribly unfair. Imagine being a star pianist, a prodigy at age 18, just graduated from high school. A nightclub would offer you $125,000 per year for your services currently. But, unfirtunately for you, a rule exists which prohibits pianists from performing for pay until they are three years removed from their high school class. In the meantime you flip burgers for $7 an hour, and their's nothing wrong with that, except that you are vastly underpaid. The major problem with the NFL rule is that the NFL serves as the only legitimate cash cow for these young men (I intentially exclude CFL and AFL). Essentially the NFL, exercising its monopoly power over the marketplace for professional football players, has limited the workplace to a certain fraction of players i.e. the 3 year rule. That is unfair. I don't know what the best solution would be. Why couldn't we offer a base of $5,000 a semester per ecruit on scholarship with incentives to increase pay up to $7,500 a semester if certain incentives are met. I am just throwing numbers out, but these numbers would certainly be within the realm of the University to handle financially given their vast profit margins. Roughly 100 scholarships at any given time times a potential of $15,000 a year per kid on scholarship would result in a payout of $1.5 million, which would hardly break the bank. I understand the argument that this would weaken the ability of small schools to compete with the big boys. I disagree. The small schools aren't competing now. Hawaii, Boise State, Utah, etc. are exceptions to the rule, they are not the rule. It's no coincidence that the big bowls all have the usual suspects i.e. Ohio State, USC, Florida, LSU, Georgia, Oklahoma, Texas, etc. Just a thought...

Paul Westerdawg said...

If the system is so unfair, then why don't elite players go to Canada?

You can enter the CFL Draft if you've complete one year of college OR you are 25 years old.

I couldn't find a stat with the "average CFL salary" quickly. However, the salary cap is around $4 million per team with 42 man rosters.

A good player could logically get $100,000 per year up there.

So why don't they go up and play there for 2 years before moving on to the NFL if they aren't getting a good deal in college?

BECAUSE --> The value of the marketing dollars invested in them, the coaching invested in them and the level of competition they play which betters them is worth more than $100,000 / year to them.

That's one way to look at it.

PWD

Pete said...

"Don't you think that should factor into the value I receive?"

Yes, so do that. How much you spend on them is not an adequate proxy for what the spending is worth. They don't really have anything to do with each other.

And, honestly, as someone who paid his way through undergrad and law school (and will be paying for quite some time) I understand the "Isn't the free education good enough?" argument... I just think it's a bad one.

If you're the key employee at the widget factory -- without you the company's revenue just dries up -- and you're getting paid the same amount as every other tom, dick, and harry... you're not going to be happy when the company throws in some complimentary widgets instead of upping your pay for being a vital member of the staff.

This is no different. These football players bring in HUGE dollars not only for the university but for the community, and they're getting chump change by comparison.

There are practical reasons that the athletes can't get paid, and I accept that, but the reason is not "because it's already perfectly fair."

If you need any more evidence about the fairness, consider this... if the NCAA one day lifted the ban on paying players, do you think the major programs would start? (Answer: Yes)

This is an indication that the players are worth more in the market than they're currently getting, but their value is being artificially deflated by the NCAA (the organization that's supposed to be "protecting" the student athletes) so that they, the Unis, and the conferences can put a little more in the bank.

But, hey, you had to pay for college, so these guys should just consider themselves lucky to be getting anything, right?

Anonymous said...

I don't think you're off base and agree that paying athletes before they fulfill their commitment would damage the major college sports.

I'm in favor of remuneration, but only if the STUDENT-athlete actually graduates. I'm sure the graduation rate varies from school to school, but an athlete with a full ride owes it to the school to finish what they started by earning a degree.

James said...

Paul, in response as to why players don't go to Canada, I think the answer is quite simple. It's marketability. College provides these players with the only legitimate place to showcase their talent. If the CFL had more television exposure, maybe kids would go there. Also, if more CFL players were getting into the NFL, that might sway a kid too. In any event, the kids still have to at least go to college for 1 year, preventing them from marketing their services to the highest bidder, the NFL. Look at the NBA. The influx of foreign talent i.e. Ginobli, Nowitzki, Tony Parker, etc. added credibility to Eoro leagues. Now you are seeing kids go to Europe instead of college to get some bucks, avoiding the NBA's one year removed from high school graduation requirement. Heck, even some NBA guys are going overseas i.e. ex Hawk Childress. Universities are exploiting these kids for huge profits. They should have to share those profits with the breadwinners- the athletes. Kids go to College for football not because it's a "great deal" but because there are no feasible alternatives. It is unfair to prevent a talented young man from maximizing his earning potential due to an arbitrary rule to stay in college for 3 years before you can get the bucks. That's crazy. And it's a bogus requirement to say it benefits the kids. Many come from poor backrounds. Try a tell a talented potential first round draft pick that he is better served by staying in College 3 years rather than making an immediate jump to get gaurenteed millions. I bet that kid would disagree. The kids do get something of value from College no doubt. But economically, it falls far short of an NFL payday.

Anonymous said...

How I see it Im in college right now I attend a Community college in Leesburg, I am benifiting from a full scholarship right now, but without the housing attached we travel and get movie to eat when we travel. But what I am getting at is the fact that I am not from a rich family and I take everything I get and thank god with everything I am given, I play softball and I have played since i was 4 years old, If you plan to pay football players on top of there scholarship no it would not be right unless they are finacially needing help.Besides the help if you plan to pay extra you need to pay all college athletes all around because they all work hard to recieve their scholarship!...

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Anonymous said...

Coaches get paid tons of money. Athletes likenesses ae used after they are finished with Sschool. Millions of dollars are generated. Of course they should get paid...even if payment is deffered.There is a great ABC article on the subject at
http://abcnews.go.com/Business/fair-play-ncaa-athletes-portion-millions-advertising-dollars/story?id=9812727

 
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