The Debate on Paying College Players- The Basics

On April 25, football players at Northwestern University will have the chance to make college athletics history.  They have the chance for a vote that would appear to move college sports forward, but might actually be a death knoll for the sport: the vote to be represented by a union.

The decision came in March, and since then, officials at Northwestern University have tried to appeal the ruling, saying that college football players are students first, and in no way are they employees of the school.  Keep in mind, this is a private school, so public universities in Illinois would not necessarily be affected by a decision.

Soon after this ruling, the house in the Ohio Legislature passed a measure saying college athletes are not employees, but in Connecticut, a measure says they have the right to unionize.  Even for someone who follows this relatively closely, the debate is a hot topic where few people have all the facts and most moves are made based on emotion.

One issue that keeps arising is how much money student athletes, mainly football and basketball players, make for their university and the NCAA.  USA Today reports in 2012, $504 million was sent to 228 Division I member schools: just over $2.2 million per school.  Of the 228, only about 10 percent of college athletic departments actually make money.  Athletic departments are funded by the money sports generate through ticket sales, merchandise and funds from the NCAA distributed to the member schools. However, even members of that 10 percent, which might be considered "self-sustaining," rely on subsidies from the school and government entities. Only seven schools on the list do not rely on a subsidy, but 76 percent of schools calculate subsidies as 50 percent or more of their revenue.  Subsidies at Cincinnati and Oregon State, two schools in the FBS "Big Six Conferences", are comprised of just over 33 and 31 percent of their revenue, respectively.

Data compiled by USA Today for 2011 shows the lowest revenue-generating school on the list, University of New Orleans, had almost $3 million in expenses.  Not including subsidies, such as student fees and government funding, the school made less than one million dollars.  Including the subsidies, they were just under $150k in the clear.  Assuming men's basketball is the money sport at the school, and this "surplus" were divided equally between 12 team sports, that's just over $12K per sport.  Seventeen basketball players could theoretically get an additional $712 each.  Basketball practices, according to NCAA regulations, can start in September.  If the team makes it to the NCAA championship, that's an additional three dollars a day for seven months.

At Texas, which does not use subsidies, athletics are just over $2.5 million in the clear.  Sixteen sports could split the extra money: $1, 564,087.81 each.  Their football roster has 98 players, and in theory each player could receive an additional $15,960.08.  At about eight months, including spring and regular season football, that's $66.50 per day.  Remember, this number is only one of 7 self-sustaining schools, and represents the most any student could get because Texas had the greatest difference in revenue minus expenses.

Under basic definitions, college athletes could be employees: they have a contract to play a sport at a university, and in turn, that university provides reasonable compensation for the student's choice to play a sport.  Simply put; said school covers student's education expenses including room and board as well as meals, student plays sport for school and complies with the rules of the NCAA.  Perhaps students need to form a labor union; representation that looks out for their interests as a whole, to include managing compensation, hours worked, working conditions, etc.

According to the NCAA website, Division I and II schools provide over $2 billion dollars in scholarships for over 126,000 student athletes, which means an average of $15, 873 per student.  Some students receive more, others receive less, because it is a coach's decision based on how much a school can provide in a certain sport.  Many student athletes receive partial funds that do not cover the full cost of college attendance.

To sum this up, paying college players is not something the sport can afford at this time.

Winter Means Big Money for the NCAA

The first day of spring is March 20.  Before that day hits, The NCAA will have gone through the Bowl Championship Series Bowls, consisting of the Sugar; Orange; Rose; Fiesta and a BCS National Championship, and also the start of March Madness.  The first round of the NCAA basketball tournament starts on the 16th of March.  Between TV contracts, ticket and merchandise sales, the NCAA stands to have a big pay day.  Super Bowl Sunday just wrapped what many might believe is probably the largest ad season: the NFL Post Season. According to The Washington Post, for the big game, the average price for an ad is $4 million.  But March Madness has consistently made more over the past few years... and the spread is growing.

Marketplace.org says in 2012, TV ad revenue reached over $1 billion for March Madness.  Think Progress says that in 2009, the college football bowl season made $261 million.  In addition to this, the money from bowl season is tax-free, because bowls are considered non-profit organizations.  The total for bowl season is less than a $100-million difference in what Major League Baseball made in 2012, and trumps the $101 million made by the professional hockey.

Once again, the large revenues for the NCAA question the idea to not pay student-athletes for the "risk" they take on the fields of play.  A Forbes article says the waiting period to enter the NBA, one year, or the NFL, three years, is what forces people to feel students in these sports are exploited by their colleges.  In all fairness, a lot of the rhetoric to go straight to the pros before the waiting period ended got louder once the NBA enacted its one-year plan in 2005.  However, as the NCAA continues to see increased profits, the rhetoric will get louder.

Pretty Soon, High Schoolers Will Want a Check

Mark Emmert, president of the NCAA, revealed earlier this week that the larger schools are more inclined to pay a stipend than provide student athletes with increased scholarships to cover personal expenses.  South Carolina head football coach Steve Spurrier has been very vocal in paying athletes as well.  Jacques Rozier, passionate supporter of college sports and the author of this blog says 'Let's just do away with the farce of "amateur" sports altogether?'  If we look at the changing of the tides, athletes in college will be getting a paycheck within the next five years.  And the main reasoning people provide is how much money the students make for the school compared to how much they need to live and survive in college.  I am sorry, but I am not sold!

College is not the end-product, and the prospect of paying athletes is not going to ensure said athletes will complete their education and graduate.  Unless the payments to those athletes match what a prospective pro career will be, they are going to constantly ask for more money.  And if colleges think there is a gap in recruiting for the big schools now, wait until you talk about which schools can pay more for a student to attend and play.

One argument is also that once the student's graduate or move on, if they do not get a pro contract, they have to settle for a job that isn't even a drop in the bucket compared to how much they made for their university.  I would be more inclined to provide the athletes with a post-education stipend to assist them while they search for a job or to help pay off student debt.  Many students who attend college rely on their parents, so they can return home while they search for a job, or if they have employment, they can use their paycheck for paying off debt as opposed to living expenses that come with the real world.  I would support this for the athletes, but to pay them to attend class?  That is quite a bit of a stretch.

College football implemented a playoff to help with some of the late season issues that come from scheduling and conference bias.  Paying athletes will defeat the purpose of ending the BCS, because these games will soon be determined well before the spring games kick off, let alone the regular season.  If I wanted to look at athletes more concerned with a paycheck than getting it done on the field, I would be a fan of the pros.  There is a reason I support and love college sports.  Perhaps I need to just go cheer on the local high school teams, before they become tainted as well.

Naming a Champion by Default

Some companies are so closely related to a product, the brand replaces the generic name for the product.  For example, Klennex is a brand name that replaces the generic term ' facial tissue.'  Coke is almost the same replacement for soft drinks.  Bowl Championship Series, replaces the term NCAA champion, but unlike the products named before, the BCS is not an NCAA champion.

Starting in 2014, a playoff will replace the current BCS system, but the NCAA won't recognize this as a "champion" either.  In fact, the NCAA does not recognize any champion at the FBS level of college football.  According to its website, the NCAA only recognizes three football playoffs: Football Championship Subdivision or Division I, Division II and Division III.  The bowl series dates back to 1998, but arbitrary polls such as the AP and Coaches Poll, have determined the "national champion" almost since the creation of college football.  Reluctance to change this system is what has led to the BCS and now the 4-team playoff.

The participating teams will still be determined by a panel of members who decide who is worthy to play in the championship games.  There will be no NCAA insight into the decision-making. Even though his article FBS Four-Team Playoff Won't Stop Controversy, Chuck Herron makes a valid point on politics influencing the decisions made.  Under the current system, computers make a decision, based on some human inspired data, as to which school should play in the championship.  The new panel probably won't be bound by the polls created, but it is sure to maintain the same built-in bias that keeps the rich teams getting richer in the national championship picture.

The whole process goes against "...NCAA mandates [for] fair access to their championships," which is why the NCAA does not recognize the BCS champion and probably won't recognize the champion of the new system, in spite of the use of playoff.  However, thanks to clever marketing, and a general understanding by the typical fan, arbitration does not matter.  Nor does the honor of actually being an NCAA champion.

Relating to the Loyal Football Fan

Sports sponsorships support sports.  You might consider this redundant, but considering how there are many franchises that survive in spite of poor records and ticket sales, the opening statement might not be a given.  Earning sponsorships is the key, and in today’s environment of communication, it could be much easier than many make it. 

Many people are bold about their allegiances now.  The use of a simple hash tag connects people miles apart to an identifying thread.  The main goal is to capitalize on this common thread by aligning yourself with your target market. 

I don’t have many numbers to support this next theory, but AT&T must be going after a younger demographic, or at the very least the passionate fan base of college sports.  There is not question that coexisting with college football is a quick way to get money, and tapping into people’s allegiances is the quick way to do it.  I am already an AT&T user, but I like what they are doing with the new “Be The Fan” Campaign.   The campaign gets people to accomplish weekly tasks using the hash tag #BeTheFan.  For example, this week, you have to send in a picture of your game day sign. This crosses all lines of communication, because no phone company owns twitter, but someone may say to his or herself, “I love what AT&T is doing in activating their sponsorship of the sport. Let’s see what else they have to offer.”  When you consider the fact that texts are free, you get a complete scope of how much money this campaign can make for AT&T. 

Hyundai has a campaign based on loyalty.  The car company refers to what different fan bases at tradition rich programs do to display their loyalty.   Then they describe what Hyundai customers do: buy another Hyundai.  This I am sure causes people to say, “Why be loyal to Hyundai?”   The car company has ranked #1 in loyalty for four straight years.