Transfer rule changes

[GooooMarquette]

This is patently false. You are lying.

Yeah, he forgot to mention that one of the criteria is that none of the payment represents wages for teaching or other services required as a condition for receiving the scholarship or fellowship grant. Then he argues that they're doing a job for compensation but it still wouldn't be taxable.  And he calls others obtuse....

https://www.irs.gov/taxtopics/tc421.html

Like I said, if the athletes push it, it could backfire....

[StillAWarrior]

This is patently false. You are lying.

Not my post you were referring to, but there may be a semantic issue here.  The portion of the scholarship covering education expenses is not income and not taxed.  The portion of the scholarship covering room and board is income and taxed.  Obviously, at many schools this can be a fairly significant portion of the scholarship.

I wouldn't call him a liar, but I believe his blanket statement is incorrect.

[Jay Bee]

I wouldn't call him a liar, but I believe his blanket statement is incorrect.

I agree that he/she may not be lying. He/she may just be an ignorant person talking authoritatively on a topic he/she knows little to nothing about in hopes that it bolsters his/her argument. Tsk, tsk.

[GooooMarquette]

Not my post you were referring to, but there may be a semantic issue here.  The portion of the scholarship covering education expenses is not income and not taxed.  The portion of the scholarship covering room and board is income and taxed.  Obviously, at many schools this can be a fairly significant portion of the scholarship.

I wouldn't call him a liar, but I believe his blanket statement is incorrect.

I'll try to give him the benefit of the doubt and won't call him a liar...but he clearly is confused with the details. And that detail really matters if you're talking about giving the athletes stipends.

[Pakuni]

This is patently false. You are lying.

So disappointed you didn't call for my ban.

Anyhow, read up.
https://www.irs.gov/publications/p970/ch01.html

[Jay Bee]

So disappointed you didn't call for my ban.

Anyhow, read up.
https://www.irs.gov/publications/p970/ch01.html

No, you read up. If you did, you'd either (a) see that you were wrong or (b) disregard the truth due to (1) stupidity or (2) desire to lie.

[GooooMarquette]

So disappointed you didn't call for my ban.

Anyhow, read up.
https://www.irs.gov/publications/p970/ch01.html

You should read the section entitled "Payment for Services" in light of your comment that the athletes are performing a job for compensation. Like I said, confused by the details, and the ramifications of your argument.

[Jockey]

I recognize that.  However, I return to one of my original points:  it's the school's brand that generates that revenue, not the individual athletes.

If the school decided to play with a full team of walk-ons, the program would not exist after just a few years.

The athletes are the #1 driver of revenue. The brand plays a small part, but the brand wouldn't be worth a wooden nickel after a couple of 0-28 seasons. Our "brand" would only be seen as a laughingstock.

[StillAWarrior]

I think this is one of our main points of disagreement then.
I believe if you pulled 13 random students out of the rec center, put them in MU uniforms and sent them out onto the BC center floor to play Marquette's schedule, the brand's revenue will dwindle and dwindle and the brand is will die.
The success and revenue of the brand are almost entirely dependent on the success of the players. Look no further than our friends in Lincoln Park. How's DePaul's "brand" these days?

As for non-star players getting less, unless you're talking about taking away scholarships and selling off facilities, I don't see how they'll be any worse off. I firmly believe there's enough money in college athletics to pay players in revenue producing sports a reasonable amount without taking anything away from other athletes.
It's just a matter of priorities.
Maybe Kansas basketball doesn't need a $14 million dorm. build them a $4 million dorm, and you could pay every scholarship basketball player a $10K salary for the next 76 years with the savings.
Perhaps Michigan football doesn't need a $21 million weight room. Maybe cut the price in half - still a pretty excellent weight room, IMO - and you can pay every player $10K a year for the next 12 years.

Yet somehow DePaul continues to receive it's slice of the Big East pie and will be playing its games in a new $200 million arena.  I'd say their brand still has some value.  Despite the fact that they have been pretty awful for a long time.

I understand what you're saying -- and I even agree with you to a certain extent -- but I think that's a bit of a straw man.  I'm not talking about pulling 13 random students from the athletic center.  I'll concede that there's probably a level below which you cannot go.  But generally speaking, as long as the product reaches a certain minimum level, fans are going to continue supporting their schools.  And there are a lot of examples out there that the level needn't be very high.  Texas Tech, which I've read is thoroughly middling, is an example.

I agree with you that spending is out of control.  However, these elite athletes, the ones we're really talking about here, are demanding those things.  Under the current system, that is how the elite athletes -- as a group -- are  recouping their value.  You think they should be paid in cash.  They seem content to be paid in scholarship and extra perks while in school (with an ever-increasing amount of cash thrown in as "cost of living").  And they're lined up around the block to sign on the dotted line in exchange for that deal.

[StillAWarrior]

If the school decided to play with a full team of walk-ons, the program would not exist after just a few years.

The athletes are the #1 driver of revenue. The brand plays a small part, but the brand wouldn't be worth a wooden nickel after a couple of 0-28 seasons. Our "brand" would only be seen as a laughingstock.

Straw man.

[forgetful]

Actually, most make a ton of money.
Their lack of profits don't stem from a lack of revenues, it stems from spending like drunken sailors on facilities, coaching staffs, stadiums, etc. because they need somewhere for all their revenues to go, and because they need to in hopes of keeping up with those who do make profits while spending outrageous sums on locker rooms, etc.
A thoroughly middling athletic program like Texas Tech earned more than $77 million last year, and spent spend less than 10 percent of it on scholarships. Where did the rest go?

As others have noted, Texas Tech lost money last year.  And if it wasn't for creative accounting in how they divide revenue between sports and assign expenses, Football and Basketball would also have lost money. 

Your proposal for not spending money on locker rooms etc., doesn't hold water.  The athletes whether they are compensated or not will still want the best facilities, meaning there will still be an arms race there.  Similarly, fans want to be in nice facilities, so to maximize revenue you still need that arms race. 

What you will see if athletes are paid is that costs will go up, revenue will be unchanged, and instead they will pilfer more money away from academics and from students as higher student fees.  A school like Texas Tech is already drawing about $7-10M per year from student fees and the University operating budget to make things work. 

And that is for a Power 5 conference team.  Move to the next level of leagues and those loses compensated by the University more to $20-30M in losses each year, with both Football and Basketball losing millions at those schools.  Creative accounting hides the losses in these "revenue sports," but they are indeed losing money.

[MU82]

Straw man.

I suppose one could say Pakuni's example was a bit of hyperbole, but all I know is that in a KO-vs-Wojo thread awhile back, at least a dozen folks here contended that Marquette basketball was "dead" before KO revived it. We weren't recruiting well, students had lost interest. Non-student fans were staying away. MU hoops had become beyond irrelevant and had progressed to dead. DEAD.

So history might suggest that maybe the example was pretty close to true.

Otherwise, I agree with at least 90% of Pakuni's arguments on this subject.

Others are free to disagree, obviously. I'm hoping the NCAA eventually agrees with me and Pakuni.

[Lennys Tap]

The real truth is that the Dwyane Wades of the world pay for the expensive facilities, trainers, tutors, scholarships, etc., that the Juan Andersons of the world enjoy. Truth #2 is that there are a lot more Juan Andersons being overpaid than there are Dwyane Wades being underpaid. Paying players who are basically fungible for revenues brought in by the rare (in MU's case) star or ultra rare superstar is patently unfair.

[GGGG]

As others have noted, Texas Tech lost money last year.  And if it wasn't for creative accounting in how they divide revenue between sports and assign expenses, Football and Basketball would also have lost money. 

Your proposal for not spending money on locker rooms etc., doesn't hold water.  The athletes whether they are compensated or not will still want the best facilities, meaning there will still be an arms race there.  Similarly, fans want to be in nice facilities, so to maximize revenue you still need that arms race. 

What you will see if athletes are paid is that costs will go up, revenue will be unchanged, and instead they will pilfer more money away from academics and from students as higher student fees.  A school like Texas Tech is already drawing about $7-10M per year from student fees and the University operating budget to make things work. 

And that is for a Power 5 conference team.  Move to the next level of leagues and those loses compensated by the University more to $20-30M in losses each year, with both Football and Basketball losing millions at those schools.  Creative accounting hides the losses in these "revenue sports," but they are indeed losing money.

Actually schools don't *need* to enter these arms races.  They generally choose to do so because athletic departments are normally run by paranoid administrators who look at every shiny new object that another school has and think they have to incorporate it immediately.

On top of that, they have the fiscal discipline of a crackhead in a drug house. 

[StillAWarrior]

The real truth is that the Dwyane Wades of the world pay for the expensive facilities, trainers, tutors, scholarships, etc., that the Juan Andersons of the world enjoy. Truth #2 is that there are a lot more Juan Andersons being overpaid than there are Dwyane Wades being underpaid. Paying players who are basically fungible for revenues brought in by the rare (in MU's case) star or ultra rare superstar is patently unfair.

In a nutshell, this is where I'm coming from (although, I suppose I'd end with "unnecessary" instead of "unfair").  Even though the players, as a group, are essential to drive revenue, it's the brand that keeps the money flowing in.  Most players are essentially fungible, with a few transcendent players able to really move the needle.  What I see is that the players, as a group, are more than happy with what they're getting for their efforts and it's even pretty rare to see the superstars complain.  My concern is that if they open things up and allow it to be a negotiation, a fairly limited number of players will receive a lot more money, but most of the players will receive less.  College recruiting -- even in low profile, non-revenue sports -- is a bit like dealing with used car salesmen where they're trying to pitch you.  It's already slimy when everyone is offering pretty much the same thing.  I just really don't like the idea of professional recruiters/salesmen negotiating with tens of thousands of children and seeing how cheaply they can buy the commitment (in order to save enough money to pay for the superstars).  I envision a situation where the top few players on a basketball team and maybe the top 10-20 players on the football roster get paid more (and even then, only in big conferences) and everyone else gets the best partial scholarship he can negotiate.  Even though it's slimy now, at least the athlete -- generally speaking a child (in some sports often as young as 15-16 years old) with limited bargaining power -- knows what he or she is getting.  At the end of the day, I just think they'd be changing a system under which tens of thousands of kids obtain a free education in order to increase the compensation of a handful of players who are going to be playing as professionals anyway.

I honestly bristle at the claim that I'm siding with the huge schools in taking this position.  I think that no matter the system, the big schools are going to come out fine.  I genuinely feel like I'm taking the side of the little guys -- the athletes who are benefiting from the current system who I believe will lose under a pay-for-play system.  If people think it's unfair to have the Dwyane Wades of the world to subsidize the rest, I can appreciate that argument even if I generally disagree.  But I think it's misguided to characterize moving to pay-for-play as looking out for the little guy.  To me, it kind of feels like fighting for higher pay for up and coming mid-level executives in Fortune 100 companies.

I think there are two better solutions.  First, as mentioned above, let those transcendent players capitalize on their name and make money.  Second, allow those players to go directly to the professional leagues and avoid the issue entirely.

[B. McBannerson]

Do not think this will happen. If it does, the unintended consequences will be longstanding and damaging.

Poaching will become rampant.  Tampering, the same.

Smaller schools, even 2nd division power 5 schools will become farm teams for elite schools.

This will result in more talent consolidation at the top as it is easier to assemble a team with proven talent than projected talent out of high school.

Upsets from smaller schools will decline, that impacts the general interest of the passive fan, especially around tournament time.  Leads to lower ratings, lower dollars.

Ultimately that impacts all the men and women that play sports in the NCAA at the DI, DII and to some extent DIII (not scholarship, but NCAA puts on the championships).

Attempting to "solve" for a problem that isn't really a problem.  Comparing what the history major can do is not the same thing.  Even comparing to what a coach can do, an actual employee, is not the same.  As hard as people want to lump those together as the same, they are not.

[B. McBannerson]

If the school decided to play with a full team of walk-ons, the program would not exist after just a few years.

The athletes are the #1 driver of revenue. The brand plays a small part, but the brand wouldn't be worth a wooden nickel after a couple of 0-28 seasons. Our "brand" would only be seen as a laughingstock.

That would never happen.  Fans want to see the team win and winning helps to create the brand, so you are correct there.  However, are people waiting to buy their season tickets each year based on who is playing for the team, or based on who the team is?  Most are buying because of the name on the front of the jersey, as the names on the back come and go every few years.   There are season ticket holders going on 40+ years, when we were great, when we sucked, when we were averaged.  Why? Because of Marquette University and who the team represents, the university, students, alumni, the city, etc.

[Pakuni]

As others have noted, Texas Tech lost money last year.  And if it wasn't for creative accounting in how they divide revenue between sports and assign expenses, Football and Basketball would also have lost money. 

I don't think this is true.
In 2014-15 (the latest data I could find on this ... perhaps you can find more recent), the athletic department overall  had revenues of $75.7 million with expenses of $76.5 million.
However, the football program turned a profit of $22.7 million and men's basketball had a profit of $2.1 million.
http://s3.amazonaws.com/raw.texastribune.org/college_sports/2014-2015/ncaa-texas-tech-2014-2015.pdf

Your proposal for not spending money on locker rooms etc., doesn't hold water.  The athletes whether they are compensated or not will still want the best facilities, meaning there will still be an arms race there.  Similarly, fans want to be in nice facilities, so to maximize revenue you still need that arms race.   

Just to be clear, I didn't suggest not spending money on locker rooms. I suggested spending less on locker rooms and redirecting the savings to players.
There will always be an arms race for facilities, etc. But it doesn't have to be as extravagant, and won't, if you require schools to direct some of their revenues to the players rather than facilities, travel, etc.

What you will see if athletes are paid is that costs will go up, revenue will be unchanged, and instead they will pilfer more money away from academics and from students as higher student fees.  A school like Texas Tech is already drawing about $7-10M per year from student fees and the University operating budget to make things work. 

Actually, Texas Tech athletics is drawing about $3 million a year from student fees (see link above).
I;m not sure costs will go up. Maybe they will. And maybe colleges will just redirect their revenues elsewhere. I doesn't matter to me, because I think schools can afford it. And those that can't shouldn't be fielding teams.
It seems our main point of contention here is whether AD's have the revenues to pay players. You seem to think that in the $3.4 billion in revenues that FBS teams generated last year, there's no money to pay players. I disagree. As do many, many others.

And that is for a Power 5 conference team.  Move to the next level of leagues and those loses compensated by the University more to $20-30M in losses each year, with both Football and Basketball losing millions at those schools.  Creative accounting hides the losses in these "revenue sports," but they are indeed losing money.

I'm sure plenty of schools do indeed lose money.
Those schools should either reduce expenses, find ways to increase revenues or drop their programs. Again, the world will be just fine without San Jose State and Idaho running FBS programs.
Or, if the powers that be decide they need such bottom-feeder programs around, they can find a way to better share revenues.

[Pakuni]

That would never happen.  Fans want to see the team win and winning helps to create the brand, so you are correct there.  However, are people waiting to buy their season tickets each year based on who is playing for the team, or based on who the team is?  Most are buying because of the name on the front of the jersey, as the names on the back come and go every few years.   There are season ticket holders going on 40+ years, when we were great, when we sucked, when we were averaged.  Why? Because of Marquette University and who the team represents, the university, students, alumni, the city, etc.

Fans buy tickets based on the perceived/expected value of that purchase. That perceived value is based on an unspoken promise that Marquette will do its best year in and year out to field a competitive, entertaining team. Fielding a competitive, entertaining team requires recruiting and developing talented, in-demand players.
So, yes, fans do buy their tickets based on who's playing for the team. Not any specific individual, but on a group of talented players.
The notion that fans are spending money simply to "cheer for the name on the front" is simply not accurate. They're spending money with an expectation of that the players wearing the name on the front will produce at a certain level. Stop meeting those expectations, and the fans will go away (again, see: DePaul).

[StillAWarrior]

Fans buy tickets based on the perceived/expected value of that purchase. That perceived value is based on an unspoken promise that Marquette will do its best year in and year out to field a competitive, entertaining team. Fielding a competitive, entertaining team requires recruiting and developing talented, in-demand players.
So, yes, fans do buy their tickets based on who's playing for the team. Not any specific individual, but on a group of talented players.

And that's why the "team of players plucked from the rec center" and "team of walk-ons" were straw men.  Fans are awfully forgiving and brand-loyal, as long as schools are honoring that unspoken promise.

The notion that fans are spending money simply to "cheer for the name on the front" is simply not accurate. They're spending money with an expectation of that the players wearing the name on the front will produce at a certain level. Stop meeting those expectations, and the fans will go away (again, see: DePaul).

And yet, DePaul basketball still pulls in millions of dollars every year and ranks in the top 25% in revenue in D1 basketball despite being a dumpster fire for the better part of 30 years.  Sounds like brand loyalty.

[Nukem2]

And yet, DePaul basketball still pulls in millions of dollars every year and ranks in the top 25% in revenue in D1 basketball despite being a dumpster fire for the better part of 30 years.  Sounds like brand loyalty.

Are those millions the money from the Fox TV contract?  Surely not from ticket sales.

[Juan Anderson's Mixtape]

TV networks spend a lot of money on broadcast rights. Quality of play is a factor.  So while an individual football or basketball player has minimal affect, the total athlete pool of D-1 is important.

For example, why does Fox pay millions of dollars to broadcast the Big East but not the WIAC?  Because BE basketball is of higher quality, so more people watch. D-1 athletes have some value collectively.  They are what makes the brand strong.

[StillAWarrior]

Are those millions the money from the Fox TV contract?  Surely not from ticket sales.

Of course. The DePaul brand has value.  Even when the value is derived, largely, from being Chicago's private college with a basketball team. The value comes from that, not the players.

[Pakuni]

And that's why the "team of players plucked from the rec center" and "team of walk-ons" were straw men.  Fans are awfully forgiving and brand-loyal, as long as schools are honoring that unspoken promise.

Well, if that's a straw man, so is the assertion that teams "cheer for the name on the front" regardless of who fills the uniform.

And yet, DePaul basketball still pulls in millions of dollars every year and ranks in the top 25% in revenue in D1 basketball despite being a dumpster fire for the better part of 30 years.  Sounds like brand loyalty.

Are you sure about that 25 percent figure?
Anyhow, DePaul men's basketball raked in a whopping $5.5 million in revenue, according to the most recent figures I could find.
The Fox contract is worth $4.16 million a year per team. So, it's actually pretty pathetic that the program can only generate a little more than $1.3 million from all its revenues outside of TV (i.e. sponsorships, ticket sales, merchandise, etc.) and it doesn't speak highly of their brand value.
DePauls fortunate inclusion in the Big East is because of the league's desire to be in the Chicago market. It has nothing to do with the value of its brand or brand loyalty.

Some more facts on DePaul's brand loyalty:
"14 Blue Demons home games this year have drawn an average of 1,824 people. That's down 24 percent from last season's final average and on pace to mark the first attendance dip for the program in three years. This year saw more sparsely-attended games than normal, according to Allstate Arena ticket records obtained by Crain's. Seven DePaul games saw attendance of less than 1,000 people, including two games attended by fewer than 600 people."

http://www.chicagobusiness.com/article/20170303/BLOGS04/170309946/basketball-attendance-sinking-as-depaul-heads-downtown

This is a program that 30 years ago was averaging 12,000 at its home games. Now it's lucky to get 1/10th of that, and you think there's still brand loyalty, and that the players matter less than the uniform?

[StillAWarrior]

D-1 athletes have some value collectively.  They are what makes the brand strong.

I agree completely, and have stated as much repeatedly.

Here's an interesting question (in my opinion).  Since we're talking about the collective -- and compensation -- I'll borrow from the language of collective bargaining.  In labor law, a key question is often what the appropriate "bargaining unit" will be.  That's the group of employees will will collectively negotiate and vote on a deal (a fairly significant over-simplification, but you get the idea).  So, for the question:  What bargaining unit do you think would actually vote in favor of a system where scholarship athletes are free to seek their own deal with no guarantee of a full scholarship?

Possible bargaining units (focusing only on scholarship athletes D1 headcount sports):

• All athletes
• All Power 5 athletes
• All males
• All Power 5 males
• All females
• All Power 5 females
• All football players
• All basketball players
• Power 5 football players
• Power 5 basketball players

The only one of those groups that I'm very confident would vote for a change to pay-for-play is the last group, but the second to last group probably would as well.  I think that in the rest of the groups, if given a choice, the majority would vote to keep things the way they are with a guaranteed scholarship.  This goes back to the fact that, in my opinion, the overwhelming majority of college athletes -- including those in FB and MBB -- are vastly over-compensated when compared to the value they bring to their programs.  If you asked athletes whether they want their scholarship or a fair share of the revenue they generate, I don't think very many would choose the latter.