Share Me The Money

NCAA Pay-for-Play Question Has Simple Answer: Give Them What They Want

You can all relax. I solved the NCAA’s pay-for-play conundrum. Oh, hey, I also addressed that little trend we’ve developed of student-athletes at big-time programs devaluing their educational opportunities. You can congratulate me later. For now just settle in, put on your reading glasses, stow the old white guy indignation, and don’t check my math or investment assumptions too closely.

Here’s the solution. Get ready. Are you ready? Give student-athletes who are on scholarship in a revenue sport at a school that turns a profit on said sport a portion of that profit.

That’s all. Well, not really. There’s a little more to it than that.

The Details:

1. A student-athlete is only eligible to collect revenue at the end of the scholastic year following a competition season during which he was a member in good standing of the team in question and received grant in aid for participating with that team (sorry, walk-ons, be better).
2. An eligible student-athlete will not receive direct payment. The school will deposit the appropriate portion of his revenue into an account held in trust and manage that account responsibly, giving the student-athlete periodic updates on its status.
3. A student-athlete may earn sport revenue for every year of his participation as a scholarship member of a profitable team. Each year’s payment will be deposited into the established account with all applicable interest and accruals held therein.
4. The student-athlete may not withdraw his revenue benefit until such time as he has completed all requirements to graduate with at least a four-year degree from the institution.
5. If a student-athlete fails to graduate before leaving the team, he has five years from the end of the academic year of his last athletic participation to meet the requirements for graduation at any accredited four-year institution. If, after five years, he has not met this requirement, his accrued revenue and interest is forfeit, and the institution must transfer it to the NCAA.
6. The NCAA, in turn, must match, from its own reserves, the cumulative amount of forfeiture from its member schools each year and hold these funds in an account. This money is to be used in aid of former athletes (scholarship and non-scholarship, from revenue and non-revenue sports alike) who incurred injuries related to competition and are, as a result, legally disabled or otherwise permanently injured.

The Example:

Here’s how I picture this working. According to Forbes, the 20 most-profitable football programs in the country last year had mean revenues of $66.55 million. (Texas’ $109 million outpaced the runner-up, Alabama, by $20 million. A-holes. That messes with the curve a little, but I couldn’t find easily accessible data on all 125ish FBS programs, so we’re using this list. Just go with it.)

For the sake of this example, let’s say that a fair percentage for these programs to share with their student-athletes is 10%. Based on that number, among the top 20 profiteers in college football, the average program would have about $6.65 million this year to deposit into its players’ accounts.

Divide that figure equally amongst 85 scholarship players, and we’re talking about individual deposits of roughly $78,000 per man. Some players receive partial scholarships, and these grants are represented as a percentage of full aid on the scholarship agreement. Players on partial scholarship would receive partial revenue proportionately equal to the percentage of expenses their scholarships cover.

So, let’s say a player on my Average U team had his $78,000 from 2013 deposited into his account. And let’s say Average U’s revenue was flat each of the next three years. By the time this player has exhausted his eligibility, he’s received four payments of $78,000, and, at a rate of 2% compound interest*, he will graduate with more than $321,000 in his account. More if he takes a redshirt.

So now he’s got an education and about a quarter-million dollars, after taxes. At this point, he’s got options. Buy a house. Start a business. Reinvest. Develop a wicked coke habit. Whatever. It’s his money. He earned it by contributing to the success (or at least the marketability) of the team that generated that revenue. He can do what he wants with it. Hopefully, the fact that he is forced to earn his four-year degree before he can access those funds will increase the likelihood that he makes good decisions, but, in the end, all you can do is lead that horse to water. The drinkin’s up to him.

An athletic department with good leadership would be ahead to implement a money management education course for all its athletes, but especially the ones in revenue sports. After all, superstar pros who get featured on Cribs (is that still a thing?) then go broke after retirement are significantly less likely to donate to their alma maters. Why wouldn’t you want to teach these people to make their money work for them?

And maybe I’m wrong, but I’m thinking a quarterly seminar where these kids actually look at the real-world ups and downs of accounts with their names on them would make a little bit more of an impact than that Econ 101 class with the TA who used to be a towel boy and doesn’t mind stretching the honor code for the good of the team. If we’re talking about MY MONEY and why it’s increasing or decreasing, what could have been done differently, and what should be done in the future, I’ll be recording the seminar and taking some pretty serious notes.

Obvious Objections

1. “But if the programs that generate the most money are paying their players more, that gives them a recruiting advantage.”

Ummmm… Look at that Forbes list again. Those teams already have recruiting advantages. All of them. When the season opens every fall, there are only a handful of teams with a realistic chance of winning a national championship. There’s a little shuffling every year, but it’s always the same group. Why? Tradition. Facilities. Coaching. Money. This wouldn’t change the dynamic at all. The best players will continue to sign with the best schools available to them, and their potential revenue benefit will reflect the overall quality of the programs they choose.

2. “What about players in non-revenue sports? Why are you leaving them out?”

They’re already left out. Just look at this abbreviated list of weird player gifts from the 2013 bowl season. The players who competed in the Chick-fil-a Bowl last year got $300 Visa gift cards. The Chick-fil-a Bowl. You know what participants in the NCAA Cross Country Championships took home in 2013? Here, let me show you:

That’s right. A jacket AND a LUGGAGE TAG! This was taken straight from the NCAA’s XC participant manual. No word on whether the merchandise actually had a guy throwing a football on it, but that would be a good way to remind those skinny punks of their place, wouldn’t it?

I’ve traveled to the first round of the NCAA Tournament with a men’s basketball team. I’ve also traveled to the first round of the NCAA Tournament with a women’s soccer team and a softball team, all from the same institution. Trust me when I say this. Non-revenue sports are already left out. I’m not here to argue whether it’s right or wrong, but that’s the way it is. And, one way or another, the revenue sports (whether they actually finish the year in the black or not) help foot the bill for their non-revenue cohorts. Make of that what you will.

3. “What about Title IX?”

What about it? Title IX is about making sure that opportunity matches interest. At least it’s supposed to be. Somewhere along the line, it morphed into this weird, rigid demand of absolute equality in an environment where that ideal is just flat preposterous.

The bottom line is that interest in women’s sports will never match interest in men’s sports. If you’re stupid, you can blame that on the sexist pigs who don’t want to watch women play ball. If you’re honest, you can admit that the real problem is that women don’t want to watch women play ball. The interest simply isn’t there, at least not like it is for football and men’s basketball, and interest is what drives revenue.

Back to the point. Title IX is about opportunity. Taking 10 percent of a football program’s revenue and giving it back to the players who helped create that revenue doesn’t take opportunity away from the women’s water polo team.

4. “If this is all about sport revenue, why make them graduate to get it?”

Because it’s not all about sport revenue. It’s about incentivising education. Elite athletes are alphas. They trust their own abilities and believe in themselves to a fault. Most of the ones who play revenue sports at a high level believe they’re going to make a career of it. And an alarming number of these guys don’t give a damn about education.

While student-athletes as a whole graduate at a much higher rate than the general student population, football and men’s basketball underperform when compared to other men’s sports (it gets even worse when you compare them to female athletes).

We haven’t given them a reason to care. They’ve been coddled and babied through high school, they slipped under the door of college admissions despite a woeful lack of preparedness, then we waltzed them into the least challenging course of study available to make sure they’re eligible to suit up on Saturdays.

If the adults shepherding these kids through the process don’t care enough to prioritize education, why should the kids? Hey, you don’t need no degree to play ball, right? There’s no incentive.

So give them one. Here’s the pitch: “You’re going to play football for us. But you’re also going to take care of your business in the classroom. You’re going to stay on track to graduate. And when you leave school after your junior season, go to camp with the Bears as an undrafted rookie free agent, tear your rotator cuff on the third day and get cut, you’re going to have a reason to come back and finish your degree. Hell, we’ll even let you borrow against your revenue account so you don’t have to take out student loans. None of this is going to be easy, but surely you’re not going to just leave all that money on the table, are you?”

5. It’s late, and I’m not going to help you argue with me any more. Come up with your own reason why this won’t work.

This is just my contribution to the conversation. I’m in no way suggesting that this is the only way to solve this problem. But there is a problem. The recognition of the Northwestern football players’ right to unionize should signal to the NCAA and its member institutions that there is a very real problem. The NFL’s recent settlement in that gigantic concussion lawsuit is another problem on the horizon.

What I’m suggesting isn’t perfect, but it could go a long way toward addressing both issues. And if the NCAA is hell-bent on keeping its facade of “amateur” competition in place, this is one way to do it. These guys won’t be cashing checks every week during the season. They’ll be participating in the world’s most compressed retirement program. What’s not to love?