Forbes Magazine: College Athletes are already paid

[GGGG]

If they make a change like this, I'll be very curious to see how it plays out.  It's not entirely clear to me that the size of the market will be the primary driving force.  It depends totally on how the NCAA changes the rule.  The reality is that boosters who own businesses will be all over this.  For example, will the NCAA prevent a Norman car dealer from paying a Sooner QB $75,000 for a print ad?  Better yet, will they stop a Cleveland car dealer (who happens to be a UW alum) from paying a Badger point guard $50,000 for a print ad?

While I do think that the NCAA is eventually going to let athletes do this sort of thing, it's going to raise some very interesting issues.  It will open up a can of worms if the NCAA is going to do some sort of review of such deals to ensure that they're commercially reasonable for the business or if it is purely boosters making cash payments to athletes.  It's a similar issue we've had for many, many years with bogus jobs provided by boosters.

Or the NCAA could say "Hey, if a booster wants to pay you $50,000 to be in a print ad, why do we care?"

[brandx]

That's very, very true.  But one issue that needs to be considered is that Title IX is seriously screwing with the free market.  If football and basketball players get paid, the girls will have to get paid too.  Suddenly, the "free" market doesn't look so free.

There are really two ways to look at this.  If the argument is that schools are making a lot of money off of these players, then there is only a relatively small group of players who should be getting paid - men's football and basketball players at a minority of schools.  This creates a Title IX problem, I believe.  If the argument is that student athletes deserve to get paid irrespective of whether their program turns a profit, then schools won't have enough money to pay everyone.

I think one free market solution to this would be for the NCAA to simply allow athletes to earn money off their own name.  I'm not sure this would implicate Title IX because it would not be the university doing it.

Excellent points - there really is not an "easy" solution to this problem.

[brandx]

I think the rule not allowing kids to go straight to the pros from high school is stupid, but keep in mind that's an NBA rule, not an NCAA rule.

And the rule only says that Andrew Wiggins can't use his talents to make money in the NBA, not that he can't use his talents to make money. D-League and Europe are options for him and every other kid. Kinda sh*tty options, but one would think better than the horrid exploitation of the NCAA.

Good points - but while Wiggins has the freedom to make a living elsewhere on basketball - he can't do it where he would make top $$.

[StillAWarrior]

Or the NCAA could say "Hey, if a booster wants to pay you $50,000 to be in a print ad, why do we care?"

Sure, they could say that, but history strongly suggests they won't say that.  They could have said, "Hey, if a booster wants to pay you $25/hr to make sure nobody steals that statue, why do we care?"  Or, going a step further, they could say, "Hey, if a booster wants to pay you $50,000 to attend State U, why do we care?"

I think the NCAA will likely come up with some way to let athletes profit on their names.  But I don't think they're going to be willing to allow boosters to essentially make cash payments to athletes.  

[ChicosBailBonds]

So do you feel that an NBA-ready player should be banned from playing at the level for which he is qualified so that he can spend his time raising money for the Golf and diving teams?

The argument that these players are already paid (scholarships) just doesn't hold water. Andrew Wiggins is only using the scholarship (which could actually go to a student or student-athlete that wants and needs it) because his talents are needed to raise money for non-revenue sports. Why is this burden placed on him?

A baseball player, tennis player, golfer, etc. can play professionally anywhere that their talent qualifies them for. But then they aren't cash cows to be milked for the colleges.

In my opinion it does hold water.  They are getting an education, whether it is one year, 4 years, whatever.  There is a hard cost to attend a university...tuition, room and board...all those are covered.  The student athlete receives a roof over his\her head, meals, tutoring, sports equipment, coaching, as well as an education via the classes he\she is taking at no cost to them.

If they don't find value in that exchange, don't go to college, do something else.  Go to the NBDL, go to Europe.

At the end of the day, every time I read one of these articles justifying payment or whatever it makes my head spin.  They are lazy articles.  Why not just write an article saying "There should be no war".   Or, "there should be no poverty".  Awesome, we all agree.   Now, let's get real.  If these articles are going to justify paying these student athletes than they need to provide solutions on how to pay for women's teams, non revenue teams, how the pay structure is going to work, will some players be paid more than others, can one school offer more for their QB than another, etc, etc.  Instead of really high level, flowery puffery which does absolutely nothing but get a public who knows next to nothing about college athletics all ginned up.  John Q Public sees 110K at Michigan football game and then believes this is the norm and makes the next leap of faith that the other 24 teams on Michigan's campus are revenue positive when only one other one is.  Just one example of many.

Let's see solutions, not puffery.  And the next time I hear the stupid like that schools make millions off these kids and they couldn't even afford to purchase their own jersey in the book store I'm going to scream....this while said athlete is on their $400 iPhone, there $250 Dr. Beats headphones, etc, etc.  Of course some kids don't have money, but the "pay the athlete" crowd paints this picture as if 100% don't have two pennies to rub together which is absolute BS.

[ChicosBailBonds]

That article means nothing. A scholarship doesn't help a kid buy clothes. It doesn't help with normal, everyday hardships like car repairs, haircuts, travel, etc. You don't have to pay them, but at least let them get a job. This would kill all the "pay the players" talk.

They can get a job....the bigger trick is actually making sure they DO the job and aren't paid to not show up and do nothing.

[Canned Goods n Ammo]

Good points - but while Wiggins has the freedom to make a living elsewhere on basketball - he can't do it where he would make top $$.

Dr.'s have a ton of schooling and residency before they are eligible to make top $$. Even if I could perform eye surgery tomorrow, I still have to complete the steps. That's how it works.

Same for basketball players (draft), baseball players (arbitration), a mechanic in tech school, a plumber's apprentice, etc.

Did I really need philosophy to work in marketing? No. In fact, I didn't even need a degree... but my employer still required it.

I might be the greatest actor in the world, but until I get a few blockbusters under my belt, Hollywood won't pay me crap.

It's how the world works.

You need more than talent and potential to make top dollar.

[StillAWarrior]

And the next time I hear the stupid like that schools make millions off these kids and they couldn't even afford to purchase their own jersey in the book store I'm going to scream...

I also find it annoying when these kids think that those jerseys are "their" jerseys and that it is about them.  In my opinion, many of these kids seriously overestimate their importance in that process.  Most people are fans of the program first, and of the player a distant second.  I'm sure lots of Marquette fans bought Jae Crowder jerseys (using him as an example because he's one of my recent favorites).  He was a great and popular player for Marquette.  But, if he hadn't signed at Marquette, many of those fans would have bought Jimmy Butler jerseys.  Or Vander Blue jerseys.  Or Davante Gardner jerseys.  The point is simple:  most fans of these college programs are buying jerseys because of the name on the front of the jersey.  They're going to buy a Marquette jersey, it's just a matter of which one.

[jesmu84]

In my opinion it does hold water.  They are getting an education, whether it is one year, 4 years, whatever.  There is a hard cost to attend a university...tuition, room and board...all those are covered.  The student athlete receives a roof over his\her head, meals, tutoring, sports equipment, coaching, as well as an education via the classes he\she is taking at no cost to them.

If they don't find value in that exchange, don't go to college, do something else.  Go to the NBDL, go to Europe.

At the end of the day, every time I read one of these articles justifying payment or whatever it makes my head spin.  They are lazy articles.  Why not just write an article saying "There should be no war".   Or, "there should be no poverty".  Awesome, we all agree.   Now, let's get real.  If these articles are going to justify paying these student athletes than they need to provide solutions on how to pay for women's teams, non revenue teams, how the pay structure is going to work, will some players be paid more than others, can one school offer more for their QB than another, etc, etc.  Instead of really high level, flowery puffery which does absolutely nothing but get a public who knows next to nothing about college athletics all ginned up.  John Q Public sees 110K at Michigan football game and then believes this is the norm and makes the next leap of faith that the other 24 teams on Michigan's campus are revenue positive when only one other one is.  Just one example of many.

Let's see solutions, not puffery.  And the next time I hear the stupid like that schools make millions off these kids and they couldn't even afford to purchase their own jersey in the book store I'm going to scream....this while said athlete is on their $400 iPhone, there $250 Dr. Beats headphones, etc, etc.  Of course some kids don't have money, but the "pay the athlete" crowd paints this picture as if 100% don't have two pennies to rub together which is absolute BS.

+1. Very well said.

I really like Jay Bilas and respect his opinion. But he never addresses any of the issues you've pointed out.

[ChicosBailBonds]

The enormous road block to paying student athletes...Title IX.  Kristi Dosh, author and ESPN reporter writes a decent article on this back in 2011....at least acknowledging the legal and financial obstacles that prevent this.


http://businessofcollegesports.com/2011/06/09/how-title-ix-relates-to-paying-players/


And Pat Forde's nice article on the myth....they myth of the "impoverished athlete".   http://espn.go.com/college-sports/story/_/id/6779583/college-athletes-far-exploited

[brandx]

Dr.'s have a ton of schooling and residency before they are eligible to make top $$. Even if I could perform eye surgery tomorrow, I still have to complete the steps. That's how it works.

Same for basketball players (draft), baseball players (arbitration), a mechanic in tech school, a plumber's apprentice, etc.

Did I really need philosophy to work in marketing? No. In fact, I didn't even need a degree... but my employer still required it.

I might be the greatest actor in the world, but until I get a few blockbusters under my belt, Hollywood won't pay me crap.

It's how the world works.

You need more than talent and potential to make top dollar.

Probably the best post here so far although I don't entirely agree.

I don't have an answer. Maybe a minor league system that similar to baseball? But - that system rewards longevity & mediocrity as much as it does results.

A crappy left-handed relief pitcher will make more than a young superstar in his first couple years. Kyle Lohse (13 years in MLB) commands almost 3 times as much in salary than Stephen Strasburg (4 years in MLB) although there isn't a team around who would rather have Lohse.

Maybe rather than skill level, it is that some sports are stacked against youth.

[Sunbelt15]

They can get a job....the bigger trick is actually making sure they DO the job and aren't paid to not show up and do nothing.

But I think their max earnings can be no more than $2000 per year.

[ChicosBailBonds]

The argument that these players are already paid (scholarships) just doesn't hold water. Andrew Wiggins is only using the scholarship (which could actually go to a student or student-athlete that wants and needs it) because his talents are needed to raise money for non-revenue sports. Why is this burden placed on him?

Last year Kansas averaged 16,445 per game
This year, Kansas averaged 16,438 per game
Next year with Wiggins, Kansas will average about 16,440 per game
The year after, if Wiggins leaves, Kansas will average 16,440 per game

It equally doesn't hold water that one player is the reason people go to games or should be the defining reason to give them $$.  People are going to KU games because they have been good forever, despite what Wiggins will do.  Sure, he'll be exciting, a great player, etc, and people will love to watch him.  When he leaves, they will still love to watch KU.  It's somewhat of a chicken and egg because Wiggins likely wouldn't attend KU if they didn't pack the place, have all that tradition, etc.  What incremental revenues is Wiggins adding to KU?  They were going to sell out anyway.  That money was going to be there whether he got there or not, so why does he deserve a cut just because he is Andrew Wiggins?

Maybe Wiggins should pay into a trust fund when he goes to the NBA to pay Wilt Chamberlain's estate, Kirk Hinrich, Collins, Danny Manning, Pierce, Chalmers, etc that made KU what it is so he would even find it appealing to go to KU in the first place.      

[brandx]

Last year Kansas averaged 16,445 per game
This year, Kansas averaged 16,438 per game
Next year with Wiggins, Kansas will average about 16,440 per game
The year after, if Wiggins leaves, Kansas will average 16,440 per game

All because of players like Wiggins. Put a 4-23 team on the floor for 2 years and the KU brand won't still put 16,400+ people in the seats. The players do that.

I'm not totally sold on paying athletes in college - but with the huge $$$ that these guys bring to the schools, the least they could do is give a small monthly stipend for BB and FB. I know some players don't need the money, but my guess is that the majority do.

The job suggestion is ridiculous as anyone who is around the programs know. They are already putting in a full work week on the field & in film study.

[forgetful]

I find the argument strange that people say they need to be paid when they are already getting a scholarship and lots of additional benefits. 

If they want to be paid, fine, give them an option.  They pay their way through college, are not entitled to any scholarships, they must pay for tutors and their own travel.  They can then take any "non-booster" pay for their name/likeness.

You give basketball and football players that option and they will be begging for their scholarships back.  Quite simply, they are already vastly overcompensated for their "likeness," given that most universities are losing money on athletics.

[Frenns Liquor Depot]

I find the argument strange that people say they need to be paid when they are already getting a scholarship and lots of additional benefits. 

If they want to be paid, fine, give them an option.  They pay their way through college, are not entitled to any scholarships, they must pay for tutors and their own travel.  They can then take any "non-booster" pay for their name/likeness.

You give basketball and football players that option and they will be begging for their scholarships back.  Quite simply, they are already vastly overcompensated for their "likeness," given that most universities are losing money on athletics.

Do you really think this is true?  Football and Basketball are clearly a money maker for universities - through donations if not through direct profits.  I can understand this on the margins (bench players, low end of d1 and below) but there is money being made here -- universities are not putting teams out on the field because they want to be nice to alums or educate student athletes. 

[ChicosBailBonds]

All because of players like Wiggins. Put a 4-23 team on the floor for 2 years and the KU brand won't still put 16,400+ people in the seats. The players do that.

I'm not totally sold on paying athletes in college - but with the huge $$$ that these guys bring to the schools, the least they could do is give a small monthly stipend for BB and FB. I know some players don't need the money, but my guess is that the majority do.

The job suggestion is ridiculous as anyone who is around the programs know. They are already putting in a full work week on the field & in film study.

In many places, there is no "huge number" being brought into the school.  People are focusing on the very top.  It's like the union arguments against CEOs where they will say "CEO X makes millions of dollars and I'm only making $20 an hour".  Uhm, ok.....and many CEOs or Presidents in this country don't come close to that.

As for the 4-23 comment, sure....but that isn't going to happen at Kansas and we all know that.  A bad year they will win 17 or 18 games.  It's similar to Still's argument about the jersey purchase....whether Wiggins is there or not, KU fans are buying tickets and buying jerseys.  Where the argument goes left is when they look at jerseys sold with Wiggins number and say that Wiggins should get a piece of it because Wiggins number is on it.  If the book store put a different number on it, but kept the Kansas on the front and that's all they had, would that jersey sell, too?  What if they put a number 1 on it and there was no number 1 on the team, yet it sold many units....wouldn't that prove people are buying it because of what is on the front of the jersey, not on the back of the jersey?

[forgetful]

Do you really think this is true?  Football and Basketball are clearly a money maker for universities - through donations if not through direct profits.  I can understand this on the margins (bench players, low end of d1 and below) but there is money being made here -- universities are not putting teams out on the field because they want to be nice to alums or educate student athletes. 

Most universities are losing money on athletics, however they view the publicity associated with it to compensate for the investment.  There are only a handful of athletes in the country that would command any income for their likeness.  Meaning the vast majority would get $0 on an open market.  So yes I would say that they are over compensated.  

People talk about how much money Universities are making off these athletes, when the fact of the matter is they are lucky to break even.  Marquette makes a lot of money off basketball, about $3M. If you divided that across all athletes on the team you would have $230K. It is fairly common for companies to compensate their employees at about 1/3 to 1/5 of their actual value (think attorneys, billed out at $250/h but paid out at $50/h).  

So that would come out to fair market value at around $47K-$75K, which is in line with their current compensation.  So Basketball players (biggest money earners) are fairly compensated, which means everyone else is over compensated.  

Before anyone suggests that the analysis uses profits instead of revenue (valid point), realize that we assigned all the money to being generated by the athletes.  This is not true.  The high end of reasonable estimates would put their contribution between 15-50%, which would generate the exact same numbers.

[ChicosBailBonds]

Spoke briefly to a good friend of mine that is an AD in DI, with football.  He doesn't think anything major is going to change anytime soon.  The Presidents are against it, too many schools can't afford it and the downstream repercussions are immense including relegating many programs either out of existence or into a new format where they might as well be.

The Florida Gulf Coast run of this year would be gone, because they could not afford to pay kids.  Gonzaga from 15 years ago, gone.  Butler, gone.  Valpo, gone.  The things that make the tournament so great would be forever destroyed.

Oh, and there is Title IX which he predicted if any type of payment structure was devised where women or non-revenue sports got anything different than football or men's basketball, the first lawsuit would be filed within 48 hours.

[ChicosBailBonds]

Do you really think this is true?  Football and Basketball are clearly a money maker for universities - through donations if not through direct profits.  I can understand this on the margins (bench players, low end of d1 and below) but there is money being made here -- universities are not putting teams out on the field because they want to be nice to alums or educate student athletes. 

SOME football and basketball are money makers.....many are not.

[GGGG]

The Florida Gulf Coast run of this year would be gone, because they could not afford to pay kids.  Gonzaga from 15 years ago, gone.  Butler, gone.  Valpo, gone.  The things that make the tournament so great would be forever destroyed.

Hyperbolic crap.  Paying a small stipend (say $2,000 to use a previous example) isn't beyond any of the schools you just mentioned.  And if it is, then drop to D2.

Oh, and there is Title IX which he predicted if any type of payment structure was devised where women or non-revenue sports got anything different than football or men's basketball, the first lawsuit would be filed within 48 hours.

Again, that is false.  If the value of each athletic scholarship includes a stipend, it would be distributed in a manner similar to the way scholarships are distributed now.

[Chicago_inferiority_complexes]

Why would any of those schools "be gone"? They already offer an inferior product to their student-athlete customers in terms of national recognition, national connections, etc. Somehow an above the board $2,500 given by Kentucky to its players is going to change that going to Florida Gulf Coast is a less than stellar option?

[Frenns Liquor Depot]

Fair point - I guess this problem is the burden of the handful of football schools making all the money in this system and paying their players already.  If they leave it collapses -- if they stay it is corrupt.  Not a new problem and I am not smart enough to say today is the inflection point.

Most universities are losing money on athletics, however they view the publicity associated with it to compensate for the investment.  There are only a handful of athletes in the country that would command any income for their likeness.  Meaning the vast majority would get $0 on an open market.  So yes I would say that they are over compensated. 

People talk about how much money Universities are making off these athletes, when the fact of the matter is they are lucky to break even.  Marquette makes a lot of money off basketball, about $3M. If you divided that across all athletes on the team you would have $230K. It is fairly common for companies to compensate their employees at about 1/3 to 1/5 of their actual value (think attorneys, billed out at $250/h but paid out at $50/h). 

So that would come out to fair market value at around $47K-$75K, which is in line with their current compensation.  So Basketball players (biggest money earners) are fairly compensated, which means everyone else is over compensated. 

Before anyone suggests that the analysis uses profits instead of revenue (valid point), realize that we assigned all the money to being generated by the athletes.  This is not true.  The high end of reasonable estimates would put their contribution between 15-50%, which would generate the exact same numbers.

[brandx]

I think there are two issues here that are being rolled into one.

The majority of student-athletes are just that - and so, in most cases, a scholarship IS fair compensation.

However there are thousands of student-athletes whose only interest is the athlete part of the equation. They would not even be in college except that is the best avenue to showcase their talents and move to the professional level. And the schools are more than happy to keep more qualified students out to let these athletes in - for the sole purpose of making money.

[PBRme]

I think the $tudent Athlete$ should be careful what they wish for.  Money that is gifted to them (as long as under the $13K individual/$26 Couple rule) is tax free.  If they are being compensated it will create tax obligation for them and reduce the tax deductibility for their parents. 

Also I would think it will only be an X time frame before Title IX would require equal payments for men and women which would be the end of all the non-revenue generating men's sports