Can We Really Pay College Athletes?

A class action lawsuit against the National Collegiate Athletic Association alleges that college athletes should be paid because they’re currently being denied revenues that accrue to top schools due to athletic programs.

This looks like a potentially big deal, but how much would this really change college sports? How many athletic programs are really making money? Not many, it turns out.

There is, in theory, a lot of cash here. According to Brian Montopoli at CBS News

Football and men’s basketball players at top sports schools are being denied at least $6.2 billion between 2011 and 2015 under National Collegiate Athletic Association rules that prohibit them from being paid, according to a new study.

The study, from the National College Players Association and the Drexel University Sport Management Department, found that the average football player at an FBS – or Football Bowl Subdivision, is the highest tier in college sports – school had a fair market value of $456,612 above and beyond the value of their scholarship. The average men’s basketball player had a fair market value of roughly $1.06 million over four years, not including his scholarship. (That figure is even higher at Bowl Championship Series schools: $714,000 for the average football player and $1.5 million for the average men’s basketball player.)

Why can’t they access their money? Well,

Under NCAA rules, players cannot be paid for their efforts or given gifts of any kind. Players who violate the rules can be suspended or otherwise sanctioned. An antitrust lawsuit now before the courts, which faces a crucial hearing in June, is seeking to bar the NCAA from interfering with the market for players’ compensation. That could allow players to claim a portion of the revenue brought in from selling broadcast rights, as well as other revenue sources.

But a portion of what? College sports generate revenue, for sure, but most athletic programs lose money in the end. Check out this bar graph by Jordan Weissmann at The Atlantic, which breaks down athletic budgets by football bowl subdivision.

NoProfit

Revenue is in green. The total athletic program cost is in blue. The only reason most of these figures even equal out is because of the red portion, that’s the subsidies the schools give their athletic departments

If this class action lawsuit goes forward might do something interesting for how we see college athletes and their role in colleges, but are they going to be getting big checks? Probably not.

There may be a few teams that make big money for their schools in sports; but most sports teams, even the big athletic powerhouses, actually operate at a loss.

Sure athletic programs generate revenue, but most of them cost more to run. This “pay the athletes” movement looks legitimate. But the reality is that there’s not much money to pay them.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer