A recent study by Ramogi Hum (a former collegiate athlete at UCLA and current President of the National College Players Association) and Ellen Stauroskwy (Professor of Sport Management at Drexel University) received some attention in the news for addressing some of the issues dealing with pay to play for college athletes. After reading the article, this may be one of the times where poor research is worse than no research. Their study at four objectives, of which the paper uses 4 of the 33 pages to address and the other 29 pages are dedicated to “exposing” the evils of the NCAA. Here are the points they make and their findings:
1. What is the value of a “full” athletic scholarship compared to cost of attendance?
They answer this simply by using IPEDS data which reports administrative data on the costs of attending. This information is publically available, just check out this website (IPEDS). IPEDS lists the costs of college as tuition, books and supplies, room and board, and other expenses. Since a scholarship only includes tuition, books and supplies, and room and board, the shortfall of an athletic scholarship is the “other expenses” category. Other expenses are $3,222 on average per year.
First, it is important to note what the “other” category is. IPEDS website states that this category is an estimation from the financial aid office on the costs a student might face: such as laundry, transportation, and entertainment. Therefore you would think that attending different colleges in the same area should have the same “other” category expenses. But this is not always the case.
Next, students who have financial need can apply for a Federal Pell Grant. Last year the maximum pell grant award was $5,500. Therefore, the difference in cost of attendance and athletic scholarship can be covered with this financial assistance.
2. How does the value of a “full” athletic scholarship compare to head coach compensation for football and men’s basketball?
This is done by looking at the shortfall of one athletic scholarship and multiply that number by the number of football and basketball scholarships (85 and 13 respectively). This is termed as the team scholarship shortfall and compared to the annual coach’s salary. Team shortfalls range in the 100,000’s of dollars for college football while the coach’s salaries are between $1.1 and $6.0 million dollars. Basketball has team shortfalls nearer to $40,000 and coaches salaries often over $2 million.
I am still trying to see how this comparison is important. Are they trying to insinuate that a coach should subsidize the team shortfall? If so, state it. But they are comparing apples to oranges and asking for lemonade. It might be important to note that the schools shown in the results are some of the highest paying schools. The median annual salary of an FBS football coach is $1.1 million and $822,000 for basketball coaches.
3. How does the value of a “full” athletic scholarship compare to established federal poverty guidelines?
Using room and board as a measurement of the part of the athletic scholarship which can pay for basic necessities such as food, shelter, utilities, etc. Other forms of benefits that students receive (i.e. tuition, books, etc) are not used to meet the daily needs. This shows that 85% of students at FBS schools live in poverty.
I am sympathetic to this point, as I once had a job that paid me in room and board instead of wages. As such, my income from that job did not allow me to buy some essentials, like toilet paper. But that did not mean I lived in poverty. My board included steak dinners once a week, an open salad and sandwich bar for lunch, and unlimited chocolate milk. In fact, I would suggest that most college students live under the federal poverty limit, but businesses recognize that. That is why they practice third-degree price discrimination and charge student prices.
4. How would the value of revenue-producing college football and men’s basketball player be affect if revenue-sharing formulas used in labor negotiations for NFL and NBA were applied?
The study uses revenue sharing rules in the NBA and NFL to indicate what fraction of total revenue in college would go toward players’ salaries. In the current collective bargaining discussions, the NBA owners want to use 50% of league revenues to go towards players salaries. This is less than what was used last year, so this might be seen as a conservative estimate. The NFL dedicates 46.5% of league revenue towards players’ salaries. This method indicates that the fair value of a basketball player is approximately $121,048 and a football player is $265,027.
I think there are two major flaws to this estimation. The first flaw is clear and egregious. Why would the revenue sharing deal used in the NFL be anywhere near what is would be in college football. The structure of the NFL and NBA are very different. Different structure on media contracts, revenue sharing, and many many more aspects. Thus the difference between current percentage of league revenue in the NBA (58%) and the NFL (46.5%). Just because they play the same sport, there is reason to believe that the structure of the NCAA football is vastly different than the NFL. The NFL has 32 teams and there are almost ten times as many teams in Division I and twice as many teams in BCS conferences alone, just to name one difference.
The second major flaw is that schools often use money generating sports to subsidize other sports within the athletic department. Most athletic departments actually do not make an overall profit, that is, they lose more money on other sports than they earn on football and men’s basketball. In fact, in 2009 only 25 of the 119 FBS school athletic departments made a profit. This was an improvement from 19 in 2006. Even more startling, 68 percent of football programs and 67 percent of men’s basketball programs made a profit in 2009.
Most of the paper was directed at exposing how terrible the NCAA is, and not enough was given to develop the actual analysis of the four prong objective of the study. The results they derived were not supported with evidence or with sound logic.
Thus the challenge is out there, how to determine the value of a college student-athlete? I wish I was able to answer this. So the ball is in your court, can you answer this question?
Interesting read. I remember reading a blog a while back written by a former college football player. His first year he was a complete walk on: he showed up in August, the coaches had never heard of him, and he tried out for the team. He did a good job explaining the life of a college football player both on scholarship and as a walk on. Anyways, one of his posts was about what a student athlete should do over the summer. He said that for many it was impossible to stay over the summer and practice with the team, because there were those necessities, such as toilet paper, that they needed money for throughout the year. But if you left for the summer to work, it was detrimental to your athletic aspirations and possibly to the team because you lost out on all the summer work outs. Looking at your former post, I believe it would be very detrimental to a football team or basketball team if every student left to work full time over the summer time. However, I'd agree that the balance between spending time working to pay for living and spending time to excel in what you do is not at all limited to student athletes, but is a common characteristic of students in general.
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