Should student athletes get paid?

We know what you're thinking... those greedy colleges are at it again, taking all of our money -- and now they're even profiting off of us! But this week Noreen and Jamie are here to prove that isn't really the case. Although college athletes can make their universities a lot of money and definitely gain them notoriety, it's a complicated topic to consider if student athletes should be paid. What are the unintended consequences? Where is the money coming from? And why is the NCAA so adamant about keeping students from earning money even though they are the stars of the show? Deep dive into it all right here! 

Transcript

Discussion

Ask a Question (explain why we chose topic)

• Should college athletes be paid? What are the implications of this? What should they get paid for? How should they get paid?

Research Background Info (present data and articles)

• NCAA.org graphs - "Finances of Intercollegiate Athletics Database"
• NCAA.org article - "Finances of Intercollegiate Athletics"
• BannerSociety.com - "Football has been college sports’ golden goose since the 1800s"
• BusinessInsider.com graph - "The average college football team makes more money than the next 35 college sports combined"
• WashingtonPost.com article - "What to know about name, image and likeness and how it will affect the NCAA"
• USNews.com article - "Students Are Not Professional Athletes"
• NYTimes.com email newsletter - "Massages vs. doubleheaders"

Hypothesis / Unique Angle (state our angle on the topic/data)

• Student athletes should be compensated in some way for the money they bring in to their institutions, however, they should not be heavily compensated

Analyze Data (deep dive into data)

How much to colleges make off athletics

• We’re about to shock you all - colleges often don’t make any money from sports and it has always been this way
  • Out of the D1 Autonomy schools (which we’ll explain in a second but basically big schools), most were in the red every year from 2010 to 2019
    • For example in 2019, there were 65 autonomy schools - only 25 generated a positive net revenue and 40 had a negative net generated revenue

• D1 Autonomy schools are the SEC, ACC, Big Ten, Pac-12 and Big 12 conferences - they are able to create their own rules in certain areas to benefit college athletes. Leaders of the major conferences say they have the resources to provide more to athletes and have tried for years but get blocked by smaller schools.
• This obviously would probably be even more skewed towards the red in smaller schools who don’t make much revenue from sports
• The median net generated revenue for all D1 schools has been in the red every year from 2010 to 2019 - with the trend getting more and more negative every year
  • In general autonomy schools fare better than non autonomy schools
  • In 2019 Autonomy schools had a net generated revenue of -$6.97 million and non autonomy schools had a net generated revenue of -$22.96 million

• Schools do get revenue from other sources which allows them to operate
  • “The total athletics revenue reported among all NCAA athletics departments in 2019 was $18.9 billion. Of that amount, approximately $10.6 billion (56%) was generated revenue by the athletics departments, leaving nearly $8.3 billion (44%) that had to be subsidized by other sources at schools across the Association, such as institutional support and student fees”
  • “Autonomy schools accounted for 72% of all those revenues and only 43% of the total spending. Division I schools as a whole accounted for 96% of all NCAA-generated revenues and 83% of spending.”
  • Total median net revenue for autonomy schools in 2019 was $1.67 million while non autonomy schools came out to basically $0
    • I think this is kind of BS because the $1.67 million revenue isn’t genuine if it’s subsidized

• Ultimately football is the the biggest revenue maker by far that funds all of the other sports
  • “football is the gravy train that feeds everything else in college sports”
  • “In 1974, the Atlanta Journal published financial figures for 15 Southern athletic departments. All of them profited on football, with LSU, Alabama, and Tennessee each clearing $1 million after expenses. All 15 lost money on non-football sports, with several finishing 1972-73 in the red overall. Tennessee posted $1.1 million in football profit and a $23,686 department-wide loss.”
  • “For example, at the University of Texas, the school with the most revenue from athletics ($182 million in 2017), 70% comes from football.”
  • The chart shows how much money the average Division I school made in 2017 in various sports for the year, according to data obtained from the Department of Education
    • “While the average school generates $31.9 million in football revenue each year, the next 35 sports on average generate $31.7 million combined each year.”
    • After football, the next highest revenue sport is men’s basketball at $8.2 million per year - almost 1/4 of the amount of football

• “The only schools where football isn’t financial king are small ones that don’t have big TV deals but do have another sport with tons of tradition. For example, in 2018, North Dakota’s not-great FCS football team posted $1.7 million in revenue, less than a men’s hockey team that sold $4.2 million in tickets and makes frequent postseason runs.”
• As a side note, football not only funds other sports, it has helped grow colleges
  • “In 1929, the Carnegie Foundation visited colleges nationwide and wrote a report about college sports’ growth before and after the turn of the century... ‘Commercialism has made possible the erection of fine academic buildings and the increase of equipment from the profits of college athletics,’ the report said, while noting how weird it was the players driving that growth were not officially compensated”

How would paying college athletes work

• “Under current NCAA rules, college athletes cannot endorse products or services, even if they are not paid to do so, and athletes cannot receive payments through similar opportunities that capitalize on their fame.”
• “New NIL legislation will allow athletes to profit off their names through avenues such as social media posts, appearances, sponsorships, autograph sales, endorsement deals and private training classes or camps. Athletes could be paid by local or national businesses in exchange for their promotion. Some athletes have massive and loyal followings, positioning them as powerful ambassadors.”
• “Six states have laws going into effect July 1 that will allow athletes to make money off their name, image and likeness (NIL)” and in total 19 states have signed into law bills that allow student athletes to benefit from their likeness
  • “Under pressure from lawmakers, the NCAA abandoned its long-standing belief that athletes should not receive payments, and the governing body plans to vote on a national NIL framework in late June.”
  • “State laws supersede NCAA rules, but the Division I Council’s vote this month could approve the NIL framework that would keep college sports from becoming a chaotic, uneven landscape.”
  • Without a national plan this could be dangerous because athletes in different states could make more or less money than others - athletes would then pick colleges based on how much money they could make instead of the real reason people should be going to college - to get the right education for them 
• As would be expected, the NCAA and lawmakers are trying to figure out rules to regulate this
  • Recommendations are being made as to how athletes can be compensated, including “stipulations and limitations that administrators referred to as “guardrails,” such as ensuring payment is consistent with an appropriate market rate and requiring athletes to disclose the financial terms of their deals.”
  • “The NCAA’s proposal for a national standard includes restrictions related to which products an athlete can endorse and gives schools the ability to block agreements for various reasons.”
• Researchers “examined athletes’ social media accounts and found that college athletes’ NIL value varies” - for example the number 1 pick in the NFL draft could make around $330,000 - others could make a couple thousand, others could make up to a million
• The other option would be the schools paying students directly but that would lead to high earning schools being able to pay a lot more while smaller schools would get left out of getting talent

How will this affect collegiate sports

• Recruiting
  • Endorsements will become part of the recruiting pitch - “Many schools have partnered with companies, such as Opendorse, that are designed to educate and assist athletes when building their personal brands. Some colleges have already started using their ability to help athletes profit in this way as a recruiting pitch.”
  • “The shift at the NCAA level would probably open the door for high school athletes to profit through NIL deals... Leaders in college athletics have expressed concern that boosters could attempt to lure recruits to campus with payments through endorsement deals.”
• Team dynamic
  • Having some people on a team that make a lot of money and some that make none could lead to resentment and divisions among players 
  • In professional sports, even if a player makes more than a teammate, they are all getting paid something - 
• Inequities among other students
  • If student athletes are making a lot of money from sponsorship deals AND also getting a free ride to college via a scholarship, etc. - this isn’t fair to other students who aren’t making this extra money who may need more financial assistance 
    • This should be on a scale of how much the student athlete makes - for example a student athlete getting a free ride and making $300k a year can afford to give a larger percentage back to the school than a student athlete making $3k a year)
    • One way to remedy this might be having students who make money off their likeness pay back money to the school - this could go into a fund for students who fall into hard times and need more financial assistance
• Education
  • Currently, “Student-athletes are amateurs who choose to participate in intercollegiate athletics as a part of their educational experience, thus maintaining a distinction between student-athletes who participate in the collegiate model and professional athletes who are also students.”
  • “Intercollegiate athletic programs should be maintained as an important component of educational programs, and student-athletes should be an integral part of the student body. Each institution's admissions and academic standards for student-athletes should be designed to promote academic progress and graduation and be consistent with the student body in general.”
    • If athletes start to get paid, the line between regular student and celebrity gets blurred and this could cause problems on the team and on campus generally - this strays from the purpose of going to school which is getting an education

How will this affect women’s sports

• “Women’s sports would not be excluded from these revenue streams. Earnings potential often relates to the size of an athlete’s social media following, and during the 2021 NCAA basketball tournaments, Axios reported that eight of the 10 most followed athletes on Elite Eight teams were women.”
• This could really help gain female athletes notoriety which could potentially make inroads in professional leagues for women
  • If college athletes could connect with fans and gain a following, the fans will want to keep following them past college - this could create a built in fan base for professional leagues to form and expand
• If the NCAA sees the value in these female athletes, they would maybe give them more accommodations and even out the playing field between mens and womens sports
  • Using softball as a case study:
    • “The television audience on ESPN [for the Women’s College World Series] is substantial, too. In the most recent previous tournament, 1.8 million people watched the final game, substantially more than have watched recent championship games of college soccer, hockey or lacrosse — men’s or women’s.
    • “The stadium that hosts the championship tournament has no showers... Off days between games are rare, and some teams have to play twice on the same day, increasing injury risk. The N.C.A.A. prefers the condensed schedule to hold down hotel and meal costs, coaches have told Jenni Carlson of The Oklahoman.” Meanwhile “The men’s version of the College World Series… treats the players better. They have off days, as well as a golf outing, a free massage day and a celebratory dinner for coaches, players and dozens of guests, Molly Hensley-Clancy of The Washington Post reported.”
    • “The average television audience for the most recent softball World Series (1.05 million) was similar to that of the most recent college baseball World Series (1.13 million). And yet one sport’s players get showers, off days, massages and a festive dinner, while the others get doubleheaders and sweaty bus rides back to a hotel.”
    • Softball could be the start of a push to make things more equal if the value is realized 

Conclusions on Data (our opinion on what data says)

• There is no good solution to this - either schools pay athletes a smaller more reasonable amount and then small schools will lose out on talent due to budgets - or athletes can profit from their name, image, and likeness which allows athletes to control the money they can make but they can become very rich which will mess with team dynamics and the college experience
• At the end of the day, college should be about getting an education, not the athletics - although the problem of going to certain schools for the athletics still exists via scholarships, adding money via income for athletes will exacerbate this problem - especially if certain states can allow athletes to make more or less than other states
• Ultimately having players benefit off name, image, and likeness may be more fair than having colleges pay players directly because that would lead to bigger colleges being able to pay a lot more for players and smaller colleges missing out due to their budgets (again, this kind of already happens with scholarships but at least with scholarships it could also be based on academics and is only covering the cost of tuition/room and board where paying extra to players could be any sum)
  • However this could lead to some athletes making large sums of money while others make none - a better solution for team dynamics would probably be small sums of money more evenly distributed