The Value of College Athletes

Excellent analysis of the fair value of a college atthlete — The Sports Economist, the Merc. Basically, a bunch of adults and other athletes are benefitting from the value created by star football and basketball players on big programs. It is no wonder that we see a constant stream of rules violations given the market value of these players.

4 thoughts to “The Value of College Athletes”

  1. The Merc article is interesting. However, one benefit that is often forgotten in this debate is the free pass from the admissions office that many athletes get. At top academic schools, basketball and football players have significantly lower test scores and GPAs than the general student population. While it may not be as dramatic, I suspect that a gulf also exist at less academic schools as well. A degree from Stanford opens many more doors than one from a state school.

    The vast majority of college athletes will never earn anything from their sports. Thus, the opportunity to upgrade their academic experiences is the more valuable than any salary they could realistically draw. Sure the top players like Lynch may be able to draw $800K per year but the article’s salary calculation method suggests that most players would draw around or below $100K for 4 years, which doesn’t amount to a life changing figure. Thus, even if athletes were paid according to the Merc’s formula, the net effect for all the non-NFL bound players would ultimately be finding careers outside of sports. This means that education is still the most valuable compensation that the vast majority of the athletes will ever receive for their athletic endeavors.

  2. That is a good point and you are right. That said, for the large minority of players who never graduate, they don’t benefit from the free pass and might prefer cash. and at the root of the system, i have an issue with adults (coaches, ncaa staff, college administrators) collecting large salaries off the back of relatively powerless 18-21 year olds. that is just not right.

  3. Yes, a huge part of the problem is the fact that most athletes would prefer cash to the degree. This mimics so many other issues today where people don’t understand how “the system” works or even where their own economic interests lie. For example how many athletes would take $100K for 4 years and then $8 per hour for the rest of their lives if they really understood the NPV of getting a degree and earning $60-150K per annum? Rather than debating whether or not to pay these players, I believe we should focus on pressuring universities to:

    1) Convey the value/NPV of an education
    2) Present a realistic view of how few athletes make it in the pros
    3) Convince athletes to take advantage of the opportunities they are being given in the classroom

    As for the adults making money off of the kids, I think this is really limited to the head coaches of basketball and football. I don’t know how much athletic directors and senior management earn but I suspect that it is in the $100-$300K range, which seems to be inline with salaries of other organizations with $25M in annual revenue.

  4. well for some of the kids i think you are right. because tho the ncaa and nfl conspire to eliminate any other football options for 18-20 year olds, there are a bunch of kids who just shouldn’t be in college but are trapped there because there is no other minor league. these kids need an economic benefit besides a college degree.

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