What are college athletes worth?

ESPN reports on the latest study by a college student-athlete advocacy group which has found that top tier college football and men’s college basketball players are worth six figures to their respective universities.  The report says that if the revenue for college athletics was shared in the same way as it is done in professional leagues, that the average Football Bowl Subdivision (FBS) football player is worth about $121,000 a year, and the average men’s basketball player is worth $265,000 per year.  Of course, one thing that is not mentioned, is that if college’s shared revenue in the same way that professional leagues do, athletic departments (most of which are already losing money) would be in dire financial straits.

Of course these findings are not big news to those familiar with the sports economics literature.  Professor Robert Brown has had several papers (both written individually and with various co-authors) which has examined the rents associated with college athletes.  His 1993 paper (linked here), finds that a premium player drafted in the first round is worth around $500,000 a year to his school.  Similar findings have been found in research in regards to the rents generated by both male and female college basketball players as well.  That is, the rents generated by premium talent in college athletics is quite significant for their respective schools.

So while this new study by the advocacy group is not surprising, I do find the new study to be somewhat questionable, as I cannot see the feasibility of having professional style revenue sharing in college athletics, and expect that college athletics would be able to survive in its current form.  Of course, all of this comes as part of the bigger argument of “pay-for-play” for college athletes.  One former UCLA athlete is quoted in the article ESPN noted about as part of the advocacy group.  Even playing for UCLA, he notes:

“I got by taking toilet paper and soap at hotels, and taking out the credit card,” he recalled, adding that he had $6,000 in credit card debt when he graduated. The school did provide him with team-issued clothing, but not all of it was appropriate for everyday use, he said.

Of course this isn’t the situation for every college athlete, but it still does point out towards the growing issues in college athletics.  So of course the NCAA is ready to do something about it right?  Well, it doesn’t seem that way.  As Victor Matheson over at The Sports Economist noted a few weeks ago, the NCAA has been more focused on the “Cream Cheese rule” than consider increasing stipends for students athletes at all.

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