College Sports Programs Losing Big Money

Mean Green 93-98 · January 30, 2011

This guy seems to think "reform" is coming to college sports. I disagree with a lot of what he has to say, but he has some great points about paying players and the BCS.

http://video.forbes.com/fvn/sportsmoney/college-sports-programs-losing-big-money

Edited January 30, 2011 by Mean Green 93-98

SilverEagle · January 30, 2011

I like the he calls the BCS a cartel. I also like the anti-trust suggestion.

GTWT · January 30, 2011

I agree with Zimbalist concerning the payment of players (they are, or they should be, amateurs) and about the need for playoffs. I don't agree with his assessment of the cost of college football. College sports is not a business, the university is not a business. Profit/loss is not the bottom line - providing a life-changing experience for young men and women is. If college athletics contributes to that experience then decide if it's worth the money. If it is, great. If not, drop football.

BlueRaiderFan · January 30, 2011

I doubt any state government would allow kids to be paid for playing outside of scholarships.

FloMoGrad · January 30, 2011

I think the guy misses the boat, personally.

Schools spend money on athletics because they provide instant brand awareness. I would know nothing about Boist St or Gonzaga without their athletic depts, in addition to every other mid-major, non-AQ, football, basketball program.

Head Coaches deserve the salaries they get, they take all the risk, you're placing the most valuable revenue generating piece of the University and putting it in one man's hands essentially.

Only thing I'll agree with is BCS = cartel. I have no perfect solution to offer, but I don't like the option we have now.

Do players deserve compensation above the scholarship, housing and meals. Probably so, but that means you'd have to do it for every athlete, male and female, and now we're getting in to crazy talk.

Everyone knows the College Football is the farm system for the NFL, and what's so wrong with that? I paid for my education after having a soccer scholarship for the first two yrs. And let me tell you, I may not have then, but I definately appreciate the value of my education, I'm still paying on it. While most athletes don't realize that right away, they will when they're 30 and don't have a mound of student loans they're still paying back.

GrayEagle · January 30, 2011

Some of his comments are pretty much spot on but what is an authority on sports economics doing at an all-girls school? How effective use of money is that?

shaft · January 30, 2011

I liked his stake holder vs stock holder analogy, but what academic institution recovers its capital costs?

Dr. Seuss · January 31, 2011

I think the guy misses the boat, personally.

Schools spend money on athletics because they provide instant brand awareness. I would know nothing about Boist St or Gonzaga without their athletic depts, in addition to every other mid-major, non-AQ, football, basketball program.

Head Coaches deserve the salaries they get, they take all the risk, you're placing the most valuable revenue generating piece of the University and putting it in one man's hands essentially.

Only thing I'll agree with is BCS = cartel. I have no perfect solution to offer, but I don't like the option we have now.

Do players deserve compensation above the scholarship, housing and meals. Probably so, but that means you'd have to do it for every athlete, male and female, and now we're getting in to crazy talk.

Everyone knows the College Football is the farm system for the NFL, and what's so wrong with that? I paid for my education after having a soccer scholarship for the first two yrs. And let me tell you, I may not have then, but I definately appreciate the value of my education, I'm still paying on it. While most athletes don't realize that right away, they will when they're 30 and don't have a mound of student loans they're still paying back.

I wouldnt say that athletics is the most valuable revenue generating piece of the University... One would assume it would be tuition cost or parking tickets.

He makes a perfect example on why colleges are over spending on football, in comparison to the NFL. One league only has 50 players while the other has 100+. The NFL plays 16 games while the NCAA only play 12 + a bowl game. There is 120 NCAA teams to 32 in the NFL. Everything he says makes perfect economic sense.

Student athlete already get paid, they receive compensation for their housing, tuition, ect... The most important item they will receive something that no one can take away from them and that is a college DEGREE. If you think students should get paid extra just look at federal pell grants and college athletes. Most of the athletes receive them and do you know what some of them spend tax payers money on... Tattoos, Rims, Stereos, ect....

Every sport acts as a monopoly in some way or form. The BCS does act in ways of a cartel because cartels can maximize more in profits than a perfectly competitive system. As an economist he is referring to efficiency and how to maximize profits while still gaining more utility in the fans, because that is what business do is try and do. If you dont think schools are a business then... :blink:

As a fan of the NCAA and college football I would like to see a change in the way we national championship is figured out, because why does every other sport use a playoff system and the NCAA doesnt....

Edited January 31, 2011 by Dr. Seuss

FloMoGrad · January 31, 2011

Pell Grants are need based. That's not payment for their services, that's an acknowledgement of their socio-economic backgrounds and ability to be supported thru their educational pursuits. Just as many non-athletes blow their Pell Grant money on all the things you mentioned as well.

If you quarantine a situation and isolate it enough, then you can make whatever discipline and theory work.

Everything he makes sense in a purely economic sense, but College Football and the NFL are not just economic issues. They go much deeper than that. Outside of tuition, college football is the largest revenue generating source. Parking tickets are but a fraction.

His #'s on athlete's at both level's is scewed as well. FBS can only have a max of 83 scholarship players. Walk-ons are paying members of the university, and partially fund their own athletic expenditure thru the Athletic Fee.

NFL Rosters are 53 man, with a practice squad of roughly 8 or so. So now we're talking about 83 scholarship athletes vs 61 Professional Athletes. Add in that every year you lose and gain new scholarship athletes, constant systemic turnover, and the numbers become pretty close in my view.

NCAA plays a smaller schedule because we are still trying to have them be students correct? NFL is about to go to 18 games if the Owners have anything to say about it.

The only issue I'll agree with him on is the BCS.

The thing the NFL has in place that college football doesn't, is free agency and a salary cap. You want to fundamentally shift the economics for any sport, that's the only way to do it.

Schools are a business, agreed, but a non-profit business, it's how my donations are allowed to be written off. As a non-profit, you automatically throw a mission towards profitability out the window and instead focus solely on whatever mission you may endeavor on. So asking a non-profit entity, or 120 of them, to suddenly focus on the economic factors at work, is a little naive.

And the NFL is the only for profit, non-profit status holding entity in the US. Congress gave them special exemption. Talk about economic sense, the NFL operates Tax-Free, how the hell does that compute in.

The whole situation is just so much bigger than a strictly economic point of view. It's a social, etheral, political emotional passion filled issue. That's why I said I think this guys misses the boat.

NFL have owners, they take the risk and reap the reward. College's don't have owners, they have alumni, boosters, but not one person at the top reaping the financial rewards. Doesn't get much more cut & dry - For profit vs not for profit.

Edited January 31, 2011 by FloMoGrad

NorthTexan95 · January 31, 2011

Note: NFL practice squads have 8 players, not 15.

I don't think you can look at athletic scholarship in isolation. If you want to start paying players something besides what they receive for their scholarships then you're opening the door to needing to pay all scholarship students. Personally, I do not think players need to be paid beyond their scholarships.

forevereagle · January 31, 2011

Note: NFL practice squads have 8 players, not 15 under the current CBA.

Fixed.

FloMoGrad · January 31, 2011

If you want to start paying players something besides what they receive for their scholarships then you're opening the door to needing to pay all scholarship students.

I mentioned this in my first post. Title IX kills the idea of only paying one set of students.

Although one could argue that more intense practice schedules and increased risk of serious injury warrant a payment for risks and committments that may not be the same in other sports, and that would not be a Title IX violation. Title IX is all about the opportunity and rough costs of scholarships, but doesn't make it dollar for dollar to take in some of the inherent discrepencies between the equipement costs and so forth of one sport vs the other. Just about opportunity. I would not make this argument, just presenting it.

I agree, the get so much for their committment, additional cash or economic incentive is not warranted.