If athletes are considered employees, Notre Dame will seek n

[Stallion]

which is EXACTLY the point 98% of sports fans miss. Its not StateU's fault that Littl' Jimmie Joe can't earn a living in an athletic profession-its the fault of some not all professional leagues. Colleges have a right to insist that academic requirements are met by those wishing to attend-its voluntary-nobody is forcing college upon him or her

[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?

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.]

I just think you are a mile off on this one.

Who cares if you can name 5, 10 or 30 players from UT NC season. Point is there are 50 schools that average some $300M in revenues over a 4-year period who in turn pay their FB/MBB players some $20M. Sure, some players contribute more than others, but what you are failing to acknowledge is the sheer magnitude of the dollars these schools collect. $300M or $500M, is that really worth debating?...it is a sweetheart of a deal for the schools no matter how you look at it, period.

Further, when you say, 'a few players like Manziel who are arguably "under-compensated",' ARGUABLY?, you kidding me? I am 100% convinced it JFB could have negotiated a contract with any employer, like all of us are able to do once we leave college, someone who have paid him 5 years $60M. That's on par with what Vince Young and Sam Bradford earned and they could only negotiate with the 1 NFL team that drafted them. Truth be told, JFB could easily have ended up making $75M over 5 years.

So cost to A&M for JFB's tuition for 3 years is $70k + other costs $80k = total cost $150k
JFB's earnings during 3 years in NFL if he could negotiate in a free market = $40M

$150k vs $40M....see where I'm going?

[Digetydog]

I just think you are a mile off on this one.

Who cares if you can name 5, 10 or 30 players from UT NC season. Point is there are 50 schools that average some $300M in revenues over a 4-year period who in turn pay their FB/MBB players some $20M. Sure, some players contribute more than others, but what you are failing to acknowledge is the sheer magnitude of the dollars these schools collect. $300M or $500M, is that really worth debating?...it is a sweetheart of a deal for the schools no matter how you look at it, period.

Further, when you say, 'a few players like Manziel who are arguably "under-compensated",' ARGUABLY?, you kidding me? I am 100% convinced it JFB could have negotiated a contract with any employer, like all of us are able to do once we leave college, someone who have paid him 5 years $60M. That's on par with what Vince Young and Sam Bradford earned and they could only negotiate with the 1 NFL team that drafted them. Truth be told, JFB could easily have ended up making $75M over 5 years.

So cost to A&M for JFB's tuition for 3 years is $70k + other costs $80k = total cost $150k
JFB's earnings during 3 years in NFL if he could negotiate in a free market = $40M

$150k vs $40M....see where I'm going?[/quote]

JFB could not have earned $40M in the NFL.
1) NFL rules (not college rules) prevented him from joining a NFL team;

2) entering TAMU, JFB was not the "big" prospect. If the NFL took him as a true freshman, he would have been an UDFA that struggled to make a practice squad. In reality, he would have needed the NFL to create a minor league to have any chance. If salaries were comparable to MLB minor league salaries, TAMU was the better deal: http://ftw.usatoday.com/2015/03/minor-l ... -mlb-mlbpa

3) In part, his rise to a #1 draft pick and to becoming "Johnny Football" was because TAMU trained him, coached him up, and promoted him as Johnny Football.

[Stallion]

Universities are not professional leagues. How many Businesses have privately funded endowments of 20 Billion like the Ivys or even 1.3 billion like SMU which prop up their bottom line and make athletics even possible. Even state universities have been supported with hundreds of billions if not trillons of state tax supported revenue. These are not comparative business models -and private non-profits and state institutions owe students only what they promise-an education, room and board. To compare a university (which includes athletics) to simply professional football corporation is not comparing apples to oranges. In fact, 99.9% of athletes come into college as unmarketable to the NFL or the NBA. They use the spotlight from College Football to improve their marketability. Its value added transaction from a student's perspective because the platform of say Texas A&M and the SEC built over 100s of years of private donations and tax supported facilities can allow an unmarketable freshman like Johnny Manziel to become a multi-millionaire. Colleges are not taking advantage of these kids when it is voluntary and the NCAA has no rules prohibiting them from turning professional whenever they want. The NFL should be blamed, the NBA has a tad less blame, MLB, soccer and many other sports have no prohibition to turning pro.

[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.

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.

It's accounted at scholarship nominal value for the Athletics departments but the true cost is much lower. It's an accounting game. You are saying the same thing I am, but you are looking at it from the athletic department's view and I'm looking at it from the University's view.

Let's use your Monmouth example. Let's say that the cost of baseball scholarship #6 is 40,000. The Athletics department writes that 40,000 as an expense, but they don't actually spend that money. The university writes that 40,000 as a revenue that offsets the Athletics department expense to balance the books at the university level, but they did not actually receive that money. Those are paper transactions.

The only actual expenses incurred are the marginal costs of having one more student...and that is minimal.

[SoCal_Pony]

I get what your saying Stallion, but at the end of the day, the top schools are still raking in billions of dollars annually.

NFL players are paid~50% of total revenues the NFL earns. Given the uniqueness of universities, let's say they were to compensate college players at a rate 70% lower than the NFL, or 15%. Using this criteria, and assuming the Top 50 schools generate $300M over a 4-year span, the average college FB/MBB player would earn $750,000 over his college career ($300M * 15% payout divided by 60 players).

Clearly they are getting nothing close to this. That's my position.

And I agree, 18 & 19 year olds are not ready for the rigors of professional FB, but the quality of the product they do produce is good enough to generate billions.

[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.

It's accounted at scholarship nominal value for the Athletics departments but the true cost is much lower. It's an accounting game. You are saying the same thing I am, but you are looking at it from the athletic department's view and I'm looking at it from the University's view.

Let's use your Monmouth example. Let's say that the cost of baseball scholarship #6 is 40,000. The Athletics department writes that 40,000 as an expense, but they don't actually spend that money. The university writes that 40,000 as a revenue that offsets the Athletics department expense to balance the books at the university level, but they did not actually receive that money. Those are paper transactions.

The only actual expenses incurred are the marginal costs of having one more student...and that is minimal.

I hate to be rude but you're wrong. What you describe may be the case at some private schools where there is no organizational distinction between the athletic department and the institution as a whole but that is not how it works at larger state schools.

In fact, due to the way the organizations are structured at a lot of the P5 state schools, the practice that you suggested wouldn't even pass the annual audit under GAAP.

[mustangxc]

I get what your saying Stallion, but at the end of the day, the top schools are still raking in billions of dollars annually.

NFL players are paid~50% of total revenues the NFL earns. Given the uniqueness of universities, let's say they were to compensate college players at a rate 70% lower than the NFL, or 15%. Using this criteria, and assuming the Top 50 schools generate $300M over a 4-year span, the average college FB/MBB player would earn $750,000 over his college career ($300M * 15% payout divided by 60 players).

Clearly they are getting nothing close to this. That's my position.

And I agree, 18 & 19 year olds are not ready for the rigors of professional FB, but the quality of the product they do produce is good enough to generate billions.

By and large the revenue generated is due to the brand names established by the schools not the athletes. You could dilute the product by taking away the top 300 prospects and people would still tune in because of their alma mater.

[CalallenStang]

[quote="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.

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.

It's accounted at scholarship nominal value for the Athletics departments but the true cost is much lower. It's an accounting game. You are saying the same thing I am, but you are looking at it from the athletic department's view and I'm looking at it from the University's view.

Let's use your Monmouth example. Let's say that the cost of baseball scholarship #6 is 40,000. The Athletics department writes that 40,000 as an expense, but they don't actually spend that money. The university writes that 40,000 as a revenue that offsets the Athletics department expense to balance the books at the university level, but they did not actually receive that money. Those are paper transactions.

The only actual expenses incurred are the marginal costs of having one more student...and that is minimal.

I hate to be rude but you're wrong. What you describe may be the case at some private schools where there is no organizational distinction between the athletic department and the institution as a whole but that is not how it works at larger state schools.

In fact, due to the way the organizations are structured at a lot of the P5 state schools, the practice that you suggested wouldn't even pass the annual audit under GAAP.[/quote]

Please provide the method that you believe is being used at "larger state schools."

Further, please provide the marginal cost actually incurred (not the accounting cost - actual money spent) at those schools.

Edit: I'll save you the trouble. Found an article I had read some time back.
http://regressing.deadspin.com/how-athl ... 1570827027

The article essentially states the exact same thing I am saying, just going into further details including "direct institutional aid," etc. It does not confuse price and cost, which is good.

The problem with athletic department accounting is that, like I have said, it is based on price, not cost.

[CalallenStang]

And then there is this:
http://www.sbnation.com/college-footbal ... nue-profit

We find the three sports in question did not cost the university anywhere near the $3.75 million indicated on UAB's accounting statements. Instead, we conclude the three sports were effectively break-even to slightly positive. Football and bowling showed a modest positive return for 2013-14. Key drivers to this conclusion are:

Athletic Scholarships cost UAB far less than their listed prices.

[Stallion]

The schools are earning that revenue from the pockets of its own Its students, alumni and supporters. That's different than a corporation earning money from customers. A customer doesn't consider himself a Polo or a Cadillac but an SMU alumni considers himself a Mustang. There is no player in SMU history that has affected my decision to go to a single SMU game. I go to support the school and hopefully will continue going even to see players who are not even alive today. If tomorrow all recruits were allowed to go pro in all sports after high school, the NCAA schools would have no problem surviving because its alumni, students are a part of the university. Fans come to support their own university not any particular recruit. The university through its alumni have built the platform upon which athletes can increase their own marketability and neither the NCAA or the schools are preventing athletes from going pro whenever they jolly well want to.

[SoCal_Pony]

I get what your saying Stallion, but at the end of the day, the top schools are still raking in billions of dollars annually.

NFL players are paid~50% of total revenues the NFL earns. Given the uniqueness of universities, let's say they were to compensate college players at a rate 70% lower than the NFL, or 15%. Using this criteria, and assuming the Top 50 schools generate $300M over a 4-year span, the average college FB/MBB player would earn $750,000 over his college career ($300M * 15% payout divided by 60 players).

Clearly they are getting nothing close to this. That's my position.

And I agree, 18 & 19 year olds are not ready for the rigors of professional FB, but the quality of the product they do produce is good enough to generate billions.

By and large the revenue generated is due to the brand names established by the schools not the athletes. You could dilute the product by taking away the top 300 prospects and people would still tune in because of their alma mater.

If Mark Cuban gets his wish, and there is an NBA D-league, effectively taking out the top prospects (not even the top 300), you really think that won't impact MBB revenues?

I say it will, and by a material amount.

I also happen to agree with most of what you & Stallion are saying. But at some point the quality & contributions of the players has to be factored in. For the NFL, who also feel their 'brand' is unique, they still value the player at ~50% of revenues. I proposed 15%, that's not unreasonable IMO.

Just curious, in a open-market environment, what % would you think is fair.

[Stallion]

The University of Texas will still have 100,000 fans in Memorial Stadium no matter what happens to professional age restrictions. College fan brand loyalty is built upon primarily ATTENDING the university-not any particular level of play (as long as they are competitive with teams on the schedule)

Mark Cuban would lose his [deleted] because athletics at a sub-professional level has no value in comparison to NCAA football and Basketball with its ready-made hordes of alumni of 50,000 or 100,000 who are willing to pay FAR ABOVE market value for their boxes and seat licenses because of university loyalty. No minor league will ever offer the platform college football and basketball because college fans are willing to pay crazy amounts that make no economic sense to see their team play. I mean shoot some of us are paying $100-$200-$300 a game just to go support their own school which is far above the real entertainment value of the product without the intense loyalty

[East Coast Mustang]

How many of you guys would pay for season tickets to watch Nic, Cannen, Yanick, Markus, etc. on an NBA D-League Dallas team instead of for SMU?

99.9% of college athletes have zero market value apart from their university affiliation

[Stallion]

Better example would be seeing Tom, [deleted] and Harry from 3 high schools across the country you've never heard of because those SMU players have already used the SMU platform to increase their marketability to the SMU family