The Business of Ball with Joseph James Francis
The Case for Paying Collegiate Athletes
Wednesday, December 20, 2017
Recently the case for paying college athletes has gotten stronger. In a disturbing trend we are seeing more and more often how money can play a role in the recruitment process as well as in the day to day lives of collegiate athletes. Traditionally, college sports have been the last bastion of sports purity, where money didn’t dictate the love of the game. Unfortunately, those days are gone with television contracts making the games more and more profitable for those who run them. For me, I used to believe that these athletes were lucky to be able to play for their school, while the same time receiving a top-notch education for free. I have since changed my tune and have joined the side that says these athletes should be paid for their services. While I do love the idea of an unpaid, ground level area of competition, I also realize that the popularity of NCAA sports in America has dictated that some sort of compensation other than scholarships be given. Today, I will show you 3 of my reasons for thinking along these lines in a hope that maybe it will change the situation for the better.
1) Let’s face it, they’ve earned the money
NCAA Basketball and Football are extremely popular in North America. With this extreme popularity comes extreme revenue. The top revenue NCAA school in 2016 was Texas A & M, bringing in over $194 Million in revenue that year. With powerhouse SEC representation in both Football and Basketball, the Aggies from Texas A & M can capitalize on a huge market. Without having to pay their players a salary, these teams can virtually print money, all off the backs of their stars athletes. If you would like a prime example of the strength of star athletes look to this glaring stat. In the Big Ten conference it is hard to find any school more popular than Ohio State. The Buckeyes always put a good squad on the field in Football and are very competitive in Basketball as well. Their total revenue for 2016 was just over $170 million dollars, 61 Million of that coming from ticket sales and another 60 Million from licensing. Compare that to the revenue of Rutgers, who reside in the Big Ten as well but have been perennial basement dwellers for the past few years in both football and basketball. They brought in just north of $83 million in revenue, but only $13 million coming from ticket sales and $20 million from licensing. A popular product, driven by star athletes provides Ohio State with almost $90 million more a year alone, coming from direct sports-related revenue streams. It is no doubt that having a team that wins, with star players can be very profitable year after year. These players probably deserve some of that money.
2) Paying them in scholarships is redundant
For a portion of college athletes, the dream of playing on a higher level is what brought them to post-secondary education. Actually attending and succeeding at school was secondary to playing the sport that they love at the next level. This is ever apparent for Football players at the collegiate level. In a 2014 Politifact report, 57% of male Football players graduated versus 75% of male students in general. Surprisingly, for men’s basketball players in the NCAA, graduation rates were a lot higher, hovering around the 70% range. This does not come without its pitfalls however as the average is taken from across all Division 1 schools, many of which do not produce professional athletes at a consistent rate. Notably, schools like Connecticut, Florida and Georgia Tech have all had terrible graduation rates among their male basketball players, even below the 20% mark in some years. For this reason, I feel that the scholarship model is not enough incentive for many collegiate athletes and a different form of compensation is needed.
3) It promotes good will and good behavior
With numerous scandals coming to light over the past decade and beyond, the idea of athlete compensation is at the forefront. Time and time again athletes are caught accepting compensation for their services. This goes for autographs, automobiles, straight cash and even tattoo’s. What has happened is that many of these athletes are using their star power not to get rich, but instead just to get by. We have all heard of the story of the poor student. When you come from a poor neighborhood, college can be extremely expensive, even if you are on a full ride scholarship. Many of the meal plans provided for athletes fall short of what is needed to sustain these men. 2 meals a day for a 300-pound linebacker doesn’t quite cut it. If you were to pay these players a stipend, they would in turn be more reluctant to break NCAA rules and accept compensation from boosters. When in need, a person will do what they must do.
Despite my thoughts on this subject, I do see the potential conflicts that may arise. There could be a situation where only the rich schools can afford to pay these players. You could also run into the problem of how wealth is shared in a school amongst all athletic programs. Despite these potential hurdles, I believe that paying athletes, even a small amount would solve many problems and help the schools fight certain evils that have arisen. In my opinion, it is not a matter of if the schools will switch to this model, but when.
Joseph James Francis is a Financial Advisor, Money Coach, and Blogger. He can be reached at:
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