How much should student-athletes be paid? (This is a first part to a multipart series on paying NCAA athletes)

A recent article came out, which among many other things, attempts to estimate the fair market wage of the college athlete. Sidestepping the question, should student-athletes be paid, let’s just look at how much a student-athlete should be paid.

Labor economic theory sets a framework to determine what wages should be. The theory suggests that wages should be set to marginal revenue product of labor. Or to clarify, wages should be set to marginal revenue multiplied by marginal product of labor. Doesn’t clarify it? Let’s use an example.

Suppose you are a worker making footballs. Your job is to sit at a machine and handcraft a football all by yourself. In one day you make 10 footballs (that is your marginal product of labor). You then sell those footballs for $20 a piece (that is your marginal revenue). So how much should you be paid? Multiply the price you get for a football ($20) by the number of footballs you made ($10), and you earned $200. So your wage should be $200.

So let’s take this and apply it to college football. A college football player should be paid based on what he produces. College football player are put on the field to produce victories, so that is their marginal product. One way to find the marginal product is to have two teams play each other twice, and the only difference between the two games is that in one of the games, one player sits out. Then repeat this for all players on each team. Meaning that with 85 players on scholarship from each team you will need to play each other 340 times. It turns out this is a lot to ask from student-athletes. So often times, statistics are used to try to estimate how much a player contributes to a victory. This is also problematic since certain positions do not accumulate statistics that are easy to measure (i.e. offensive lineman or a corner back that covers so well that the opposing quarterback never throws the ball near him). It is also difficult to measure for back up players who help the starters prepare during the week, but does not play during the game. Needless to say, it is not easy to calculate how much one player contributes to a victory.

Some recent examples, how valuable is Tom Brady? Some might argue that he is very valuable, but in the 2008 season when he had a season ending knee injury in the first game, the team went 11-5. The next year with Tom Brady they went 10-6, this might mean that having Tom Brady as your starting quarterback actually costs your teams wins. And as such, he should not be paid to be your starting quarterback. (Although the previous year with Brady they were 16-0, so this example easily breaks down, but it still illustrates the point).

What about the 1987 1st Team All-American running back and Heisman Trophy candidate, Thurman Thomas? Thomas was the all-time leading rusher at Oklahoma State University history. He ran for nearly 4,600 yards in his career with 43 touchdowns. He led the Cowboys to a 9-2 record and was a major contributor to the 35-33 victory over West Virginia in the Sun Bowl. By the end of the year, OK State was ranked 11^th in the country. So how valuable was Thurman Thomas to his team? Suppose he didn’t play, then his back up would have had to play. Turns out that his back up was pretty good, you might have heard of him, Barry Sanders? (The next year as a senior, Sanders accumulated 3,248 total yards with 39 touchdowns. That was in just one season, and that doesn’t include the 222 yards and 5 touchdowns he scored in the three in the Holiday Bowl) So if Thomas is paid based on how he contributes to a victory, he might not contribute anything, because without him they may have won as many games if not more games, and as such would be paid nothing.

Even though we haven’t completed step 1, let’s go onto step 2. How much is a victory worth for each team (Marginal Revenue)? If you thought the first step would be difficult to estimate, this one is even more challenging. Alabama went 10-3 last year, how much more revenue would they have earned if they went 11-2? To be honest, there are so many different factors that come into play that I don’t even know where to begin. Ticket sales? Media Contract? Alumni donations? But suppose for a second that they were maxed out on all of that, and that an extra victory didn’t bring in any extra revenue. That would simply mean that college players should get paid 0 dollars. Because 0 times any number is 0.

So before we start referring to the NCAA with a “whiff of the plantation” reference, we need to reason out. Just because NCAA football makes tons of money (and men’s basketball as well), does not mean that student-athletes are underpaid and exploited workers. It very well may be the case that they are getting paid exactly what they are worth.