If athletes are considered employees, Notre Dame will seek n

[bubba pony]

further, the paid college players will have to pay state income tax for away games. some cities like Philly and NYC also have a city tax. regardless that TX does not have a state income tax, the state where the game is played wants to be paid. so it is with the NFL and MLB players.

[DanFreibergerForHeisman]

further, the paid college players will have to pay state income tax for away games. some cities like Philly and NYC also have a city tax. regardless that TX does not have a state income tax, the state where the game is played wants to be paid. so it is with the NFL and MLB players.

I believe there is an earned-income threshold, but if they divide tuition by 12 they will have to deal with this at most schools - which totally cracks me up.

[RebStang]

Even at a big school like A&M, a backup player is not worth the cost of tuition, room & board, books, and other costs incurred by TAMU to prepare him to play.
.

Cost of tuition is a paper cost only. It was utilized to shut down football at UAB (was booked as a $3.75 million cost against football) but an independent consulting firm (whose report was recently released) determined that the true marginal cost of educating the 85 football athletes was immeasurably small.

I wouldn't call it a paper cost and I also wouldn't call it "immeasurably small".

The only athletic budget I can get my hands on is Ole Miss'. Scholarships for 2014-2015 were budgeted at $8,395,054 or about 11% of all athletic expenditures. By comparison, student fees were budgeted at $3,109,325 or about 4.1% of all athletic revenues. Once the actual revenues and expenditures for the year are calculated, I would expect to see student fees fall to about 3% of athletic revenues. The percentage of expenditures that go to scholarships will probably fall significantly in 2015-2016 since I'm estimating that the total budget will go from about $76.5 million to around $85 million next year... possibly higher depending on the actual split that the schools get from the SEC Network. Still, 11% of total expenditures going to scholarships isn't a trivial amount.

[mustangxc]

You are missing the point. Fitting a couple more students into each classroom does not add to the cost. It simply adds more non-paying students. You don't pay faculty extra money to grade a couple more papers either so there is no additional cost. The only real expense for the school is coaches salaries, meals, travel, equipment, etc. Basically anything tangible amounts to additional expenditures, but the scholarship itself is of great value to the student-athlete but not of much significance to the school.

[Pony Boss]

You are missing the point. Fitting a couple more students into each classroom does not add to the cost. It simply adds more non-paying students. You don't pay faculty extra money to grade a couple more papers either so there is no additional cost. The only real expense for the school is coaches salaries, meals, travel, equipment, etc. Basically anything tangible amounts to additional expenditures, but the scholarship itself is of great value to the student-athlete but not of much significance to the school.

Couldn't have said that better myself.

[CalallenStang]

Even at a big school like A&M, a backup player is not worth the cost of tuition, room & board, books, and other costs incurred by TAMU to prepare him to play.
.

Cost of tuition is a paper cost only. It was utilized to shut down football at UAB (was booked as a $3.75 million cost against football) but an independent consulting firm (whose report was recently released) determined that the true marginal cost of educating the 85 football athletes was immeasurably small.

I wouldn't call it a paper cost and I also wouldn't call it "immeasurably small".

The only athletic budget I can get my hands on is Ole Miss'. Scholarships for 2014-2015 were budgeted at $8,395,054 or about 11% of all athletic expenditures. By comparison, student fees were budgeted at $3,109,325 or about 4.1% of all athletic revenues. Once the actual revenues and expenditures for the year are calculated, I would expect to see student fees fall to about 3% of athletic revenues. The percentage of expenditures that go to scholarships will probably fall significantly in 2015-2016 since I'm estimating that the total budget will go from about $76.5 million to around $85 million next year... possibly higher depending on the actual split that the schools get from the SEC Network. Still, 11% of total expenditures going to scholarships isn't a trivial amount.

You just fell into the same trap that the original report regarding UAB's football scholarship cost fell into. The true cost to the institution of educating the additional student does not equal the nominal value of the scholarship.

[CalallenStang]

You are missing the point. Fitting a couple more students into each classroom does not add to the cost. It simply adds more non-paying students. You don't pay faculty extra money to grade a couple more papers either so there is no additional cost. The only real expense for the school is coaches salaries, meals, travel, equipment, etc. Basically anything tangible amounts to additional expenditures, but the scholarship itself is of great value to the student-athlete but not of much significance to the school.

Should have read this before I responded. Very well-put

[RebStang]

You are missing the point. Fitting a couple more students into each classroom does not add to the cost. It simply adds more non-paying students. You don't pay faculty extra money to grade a couple more papers either so there is no additional cost. The only real expense for the school is coaches salaries, meals, travel, equipment, etc. Basically anything tangible amounts to additional expenditures, but the scholarship itself is of great value to the student-athlete but not of much significance to the school.

Except that this isn't actually how it works at a large number of schools.

In fact, if that were the case then you would never hear of schools not being able to allocate the maximum number of scholarships allowed by the NCAA but there are plenty of schools that simply can't afford to give out all the scholarships the NCAA allows in every sport.

Monmouth, for example, as of a few years ago only allocated 5 scholarships to baseball out of the 11.5 the NCAA allows. Why? Because they couldn't afford to fund any more scholarships for baseball. If they were only paying 'cost' for each scholarship, they wouldn't have had that problem.

I'm sure some schools do treat scholarships as only a "paper cost" but it's nowhere near common. Scholarships are, in fact, one of the larger expenses for many athletic departments.

[JasonB]

It is mind boggling to me how organizations can't differentiate between actual costs and opportunity costs in their assessments. This goes way beyond athletic departments, because most Fortune 500 companies don't do this very well either.

If giving an athletic participant a scholarship is taking away from an opportunity to have a new student to pay tuition, then there is an opportunity cost associated with not obtaining the revenue from the rejected student. You still can't just factor the potential tuition as revenue. You have to subtract the potential school-granted scholarships from the revenue, and then you have to add other sources of expenditures the student would have on campus (book store, merch, food, etc).

When evaluating at a macro level, however, you also have to take in the opportunity cost of NOT granting a player a scholarship - loss in revenue from attendance, lost merch purchases, loss in rev from reduced branding, etc.

However, if you wouldn't literally take a scholarship granted to a football player and hand it to a different student, you can't calculate the first portion as opportunity cost. Instead, you are comparing the second opportunity cost calculation against the cost of supporting a student athlete on campus.

Either way, counting a football scholarship as part of the expenditure of an athletic department is deceiving and makes it appear as though SMU, TCU, and Duke spend more on athletics than they really do.

[RyanSMU98]

Just another wrinkle to this whole employee concept: if they are truly classified as an employee, what are the ramifications for terminating a scholarship? As of now, they are renewed annually; if one is considered an employee, there are protections and a great deal of effort required to show cause for termination. Do scholarships become one-year "employment contracts"? If they are able to unionize, does the union force negotiate them so they become 4-5 year "contracts"? What changes about the disciplinary and other means currently available to remove an athlete from a team, and what does the "show cause" procedure morph into? If you use more of the pro athlete model, are some of these kids going to be able get guarantees on their scholarships, stipends, etc. if they are no longer able to participate in the sport? This has ramifications that go far beyond simple cost and compensation; that employee designation carries a whole lot of protection with it that makes the whole thing even more of a mess when you try to apply it to a college athlete.

[Stallion]

some of you are missing the fact that 18 of the 20 sports teams make ZERO for their school and so there is no opportunity cost involved for all scholarship students involved in those sports

[Digetydog]

Just another wrinkle to this whole employee concept: if they are truly classified as an employee, what are the ramifications for terminating a scholarship? As of now, they are renewed annually; if one is considered an employee, there are protections and a great deal of effort required to show cause for termination. Do scholarships become one-year "employment contracts"? If they are able to unionize, does the union force negotiate them so they become 4-5 year "contracts"? What changes about the disciplinary and other means currently available to remove an athlete from a team, and what does the "show cause" procedure morph into? If you use more of the pro athlete model, are some of these kids going to be able get guarantees on their scholarships, stipends, etc. if they are no longer able to participate in the sport? This has ramifications that go far beyond simple cost and compensation; that employee designation carries a whole lot of protection with it that makes the whole thing even more of a mess when you try to apply it to a college athlete.

It will be a long time before this situation gets sorted out.

[SoCal_Pony]

While there are a few players like Manziel who are arguably "under-compensated," the vast majority of college athletes are over-compensated by a full scholarship. Even at a big school like A&M, a backup player is not worth the cost of tuition, room & board, books, and other costs incurred by TAMU to prepare him to play.

Don't know what planet you are living on Digety.

UT's in-state tuition is $10k per year. For athlete's let's round up to include other costs and say it's $25k per year. Let's also assume 100 student athletes per year (FB & MBB). So the cost to the university is $2.5M per year or $10M for 4 years. I'll be generous and double that amount to $20M for 4 years.

Do you realize UT generates some HALF a BILLION $ in athletic monies over an athlete's 4-year stay at the school EXCLUDING invaluable advertising exposure the school receives.

So........UT earns $500,000,000 plus enormous advertising benefits and pays out $20,000,000 to its wage earners (who risk life-threatening injuries btw) and you say they are under compensated? Really?

[Digetydog]

While there are a few players like Manziel who are arguably "under-compensated," the vast majority of college athletes are over-compensated by a full scholarship. Even at a big school like A&M, a backup player is not worth the cost of tuition, room & board, books, and other costs incurred by TAMU to prepare him to play.

Don't know what planet you are living on Digety.

UT's in-state tuition is $10k per year. For athlete's let's round up to include other costs and say it's $25k per year. Let's also assume 100 student athletes per year (FB & MBB). So the cost to the university is $2.5M per year or $10M for 4 years. I'll be generous and double that amount to $20M for 4 years.

Do you realize UT generates some HALF a BILLION $ in athletic monies over an athlete's 4-year stay at the school EXCLUDING invaluable advertising exposure the school receives.

So........UT earns $500,000,000 plus enormous advertising benefits and pays out $20,000,000 to its wage earners (who risk life-threatening injuries btw) and you say they are under compensated? Really?

Since we are talking about UT, I'll switch my example from Manziel to Vince Young. In terms of "value" to the school, Vince Young was a home run. Between the Heisman, the bowl victories, and the 2005 National Championship, Vince Young's value to UT was multiples of the "value" of his scholarship. They sold jerseys. They sold tickets. And his performances certainly didn't hurt UT's ability to create the Longhorn Network. Even accounting for the enormous amount of money VY made in the NFL, Texas "won" the transaction.

But, how many people can name more than 5-10 members of the 2005 Texas Longhorns National Championship team? How many jerseys did the starting center/RT/DT/CB sell? On a 85 man roster, how much "value" did the bottom 40 players on the roster really add? If any of them turned pro, how many made more than $25K per year playing football?

Furthermore, for teams that are not financial juggernauts (at least 80% of P5 + G5 teams), there is no $500M pot to split up. Even if you address the various accounting issues, schools like SMU are not making huge "profits" from FB or BB. Financially, how many players on last year's SMU FB team individually contributed more than the value of their scholarship to SMU's bottom line? Tulane? Vandy? Stanford? Northwestern?

[Factoring in injury risk, most high school and college programs will probably shut down if they are ever forced to fully compensate players for the "injury risk." But, that is another story.]

[Rebel10]

Ponylaw is correct about the ramifications.

That's why college sports will simply change the rules to say anybody can go pro at any time. But if you want to play in college you will play for a scholarship and we won't make you an employee. Its a choice the player gets. If you think you are being exploited by a college - go pro. If you don't want to go to college - go pro.

When the dust settles 99% will choose college as they aren't pro athletes and they will recognize the training they get to possibly go pro.

But the college game at the top level will be less exciting because the superstars won't stick around long. One and done has dimished BB but it hasn't killed it.

College sports can't change when a player goes pro. That is a rule set up by the NFL and NBA.